Coopetition & Value Net

COOPETITION &
VALUE NET
Competitive Dynamics & Strategy
Presented By:
Meghana Chittepu - 500107677
Chaitanya Gupta - 500106925
Manvendra Kumar Jadhwan - 500105507
AGENDA
Introduction
Case Study
Questions
Conclusion
COOPETITION
Coopetition is a business strategy where companies engage in both cooperative and competitive actions with the same firms or competitors. This strategy
allows companies to leverage the strengths and resources of their competitors to mutual benefit while still striving to outperform them in the market.
Key characteristics of coopetition include:

1. Cooperation: Companies cooperate with competitors to achieve common goals or forming alliances to address
industry-wide challenges.
2. Competition: Despite cooperating in certain areas, companies continue to compete in other aspects of their
business.
3. Mutual Benefit: Coopetition aims to create win-win situations where all participating companies benefit from
collaboration while still striving to outperform each other in the market.
4. Dynamic Relationship: Coopetition involves a dynamic and evolving relationship between companies, where they
continuously assess opportunities for collaboration and competition based on changing market conditions and
strategic objectives.
VALUE NET
The Value Net is a strategic management framework used to analyze relationships with stakeholders, including customers, suppliers, competitors, and
complementors, to understand how value is created, captured, and distributed in an industry.
Key components include:

1.Customers: Understanding customer needs, preferences, and behaviors, and their value propositions.
2.Suppliers: Evaluating supplier relationships and their role in the value chain, focusing on reliability, quality,
and cost-effectiveness.
3.Competitors: Analyzing the competitive landscape, including strategies, strengths, weaknesses, and
market positioning.
4.Complementors: Recognizing entities that enhance the company's offerings and assessing opportunities
for collaboration or coopetition.
Achieving a value net through coopetition involves:
Identifying Complementary Forming Strategic Defining Clear Creating Shared

Capabilities: Partnerships: Objectives: Value Propositions:
Recognizing areas of shared Establishing alliances to Setting cooperative and Developing value propositions
strengths with competitors. leverage each other's competitive boundaries. that benefit all participants.
resources.
Establishing Trust
Monitoring and Adjusting: Capturing Value Fairly: Innovating and Adapting:
and Transparency:
Building open communication Continuously evaluating Ensuring equitable distribution Encouraging a culture of
and adhering to agreed-upon performance and optimizing of benefits. innovation to respond to
rules. outcomes. market changes.
Case Study: Apple and Samsung
- Coopetition in the Smartphone Industry
Apple Inc. and Samsung Electronics Co., Ltd., two giants in the global smartphone industry. Despite being fierce competitors, both companies also
collaborate in various aspects of their business, creating a value net that benefits them mutually.
Coopetition Dynamics:
1. Component Supplier Relationship: Apple sources crucial components like processors, memory, and displays from
Samsung.
• iPhone X utilized Samsung's OLED displays for its high-quality screen.
• Samsung is a primary producer of iPhone chips until 2013, enhancing its semiconductor division.
2. Legal Battles and Collaboration: Apple and Samsung engage in legal battles over patents while maintaining
collaboration in component supply.
• Despite legal disputes, Apple signed a deal with Samsung in 2018 worth billions for OLED displays.
• Legal disputes managed through licensing agreements, reducing regulatory risks.
3. Technology Licensing: Both companies have licensed technologies to each other, reducing legal conflicts.
• In 2014, they dropped patent lawsuits outside the US and cross-licensed patents.
Financial Benefits:
1. Revenue Generation: Samsung earns significant revenue from Apple.
• Apple's business accounted for approximately 15% of Samsung's total revenue in 2021.
2. Diversification of Revenue Streams: Apple diversifies its supply chain by sourcing from Samsung, minimizing dependency on a
single supplier.
• Samsung's reliable supply reduces the risk of production disruptions for Apple.
Marketing and Innovation:

1. Market Leadership:
• Apple and Samsung collectively hold over 40% of the global smartphone market as of 2022.
2. Innovation through Rivalry: Competition drives innovation in design, features, and technology, leading to industry standards like
advanced cameras and facial recognition.
• Features like Face ID and high-resolution displays influenced by competition.
Value Net Analysis:
Suppliers: Apple benefits from Samsung's stable component supply, ensuring high-quality supply chain & Samsung gains significant revenue as
Apple's supplier, boosting its semiconductor and display divisions.
• Samsung invested in extreme ultraviolet lithography machines for iPhone chip production in 2018.
Customers: Apple caters to diverse consumers with Samsung's components, ensuring loyalty & Samsung's components enhance Apple's
product success, indirectly boosting Samsung's brand.
• Samsung's screens complement Apple's iPhones.
Competitors: Fierce competition drives innovation, maintaining market share and industry growth.
• Both hold significant market shares, driving overall smartphone market growth.
Complementors: Samsung complements Apple's products with high-quality components, securing revenue.
• Samsung's collaboration with Apple in licensing ensures a stable business environment.
Questions
How does Samsung benefit from its supplier relationship with Apple in the context of coopetition?
• Samsung benefits from its supplier relationship with Apple by gaining significant revenue.
• This relationship strengthens Samsung's position in the semiconductor and display industries, boosting its revenue and market
influence.
• Additionally, Samsung's collaboration with Apple in component supply helps it avoid regulatory hurdles and ensures a stable business
environment, contributing to long-term growth and sustainability.
How does coopetition between Apple and Samsung impact innovation in the smartphone industry?
• Coopetition fosters a competitive environment among companies, encouraging them to innovate in product features, design, and
technology to outperform each other.
• By collaborating on certain aspects while competing fiercely in others, companies drive technological advancements and set
industry standards for innovation.
• Coopetition stimulates market growth by spurring demand for new and innovative products, benefiting consumers with enhanced
smartphone experiences.
What role does Apple play as a complementor in the value net of Samsung's business model?
• Apple acts as a complementor in Samsung's business model by creating demand for Samsung's high-quality components through its
innovative products like iPhones.
• Samsung's components contribute to the success of Apple's products, indirectly enhancing Samsung's brand recognition and market
influence.
• This collaboration ensures a reliable revenue stream for Samsung and fosters a mutually beneficial relationship between the two
companies in the competitive smartphone market.
Provide and Discuss other examples in terms of Coopetition

Google and Apple: Competitors in mobile operating systems (Android vs. iOS) but engage in coopetition.
• Google pays Apple billions yearly for default search engine on Apple devices & Google's services like Maps and YouTube available on Apple's App Store,
benefiting both.
Airbus and Boeing: Dominant players in commercial aircraft manufacturing, fiercely competing but engaging in coopetition.
• Collaborate on safety and regulatory standards through organizations like ICAO & Sometimes collaborate on R&D projects to advance aviation technology and
address industry challenges.
Netflix and traditional media companies: Netflix competes with traditional media (Disney, WarnerMedia, NBCUniversal) for viewership and content licensing.
• Collaborates with these companies by licensing their content for streaming on its platform, allowing Netflix to offer diverse content while providing additional
revenue streams for traditional media.
Conclusion
The coopetition between Apple and Samsung showcases a delicate balance between rivalry
and collaboration. Despite legal battles, strategic cooperation in component supply,
technology licensing, and market competition has proven mutually beneficial. This relationship
has contributed to financial success, market leadership, and continuous innovation for both,
highlighting the effectiveness of coopetition in the technology industry.
Thank You

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COOPETITION &

Key characteristics of coopetition include:

Key components include:

Identifying Complementary Forming Strategic Defining Clear Creating Shared

Marketing and Innovation:

Provide and Discuss other examples in terms of Coopetition

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