The current issue and full text archive of this journal is available at www.emeraldinsight.com/0263-5577.htm Identifying and prioritizing critical success factors for coopetition strategy Kwai-Sang Chin, Boris L. Chan and Ping-Kit Lam Department of Manufacturing Engineering and Engineering Management, City University of Hong Kong, Hong Kong, People’s Republic of China Abstract Purpose – Coopetition is a revolutionary mindset that combines competition and cooperation. This paper aims to determine and to examine success factors critical to coopetition strategy management and to explore the identified factors in Hong Kong manufacturing. Design/methodology/approach – Based on a literature review and expert interviews following the analytic hierarchy process, this paper identifies and prioritizes seven critical success factors and 17 critical success sub-factors comprising three success factor categories: management commitment, relationship development, and communication management. Findings – The results show that management leadership and development of trust are the most important success factors. Based on the factors identified, the authors propose a hierarchical model for coopetition strategy management, which has been validated in Hong Kong industry to facilitate the formulation of action plans for better coopetition management. Practical implications – The prioritization of critical success factors and sub-factors can help practitioners understand their relative importance and develop improvement plans in cases where they lack sufficient resources to deal with all factors simultaneously. Originality/value – This paper identifies the critical factors for implementing coopetition and also validates and prioritizes them in Hong Kong manufacturing industry. It provides valuable information that can help manufacturers accomplish coopetition. Keywords Critical success factors, Competitive strategy, Economic cooperation, Analytical hierarchy process Paper type Research paper Critical success factors 437 Received 13 June 2007 Revised 25 October 2007 Accepted 25 January 2008 1. Introduction Today, most businesses view themselves as competing in limited markets, seeking to win out primarily by reducing prices. Kim and Mauborgne (2006), who have compared this emphasis on competition to struggling for advantage “in a bloody red ocean,” suggest an alternative. Their “blue ocean strategy” aims to overcome “bloody” competition by developing a new market based on value innovation. Coopetition, one of several blue ocean strategies, is a revolutionary mindset that combines the concepts of competition and cooperation (Nalebuff and Brandenburger, 1996). How can an organization thrive by simultaneously cooperating and competing with others? Cooperation helps create a bigger business pie, so a business can win a bigger piece of the pie through competition. For example, one early DVD standard was the super density format jointly developed by seven firms, including Toshiba, Hitachi Ltd, Matsushita Electric Industrial Co. Ltd, its subsidiary MCA Inc., Electronic Corp., Thomson Consumer Electronics SA, and Time Warner Inc. This jointly owned Industrial Management & Data Systems Vol. 108 No. 4, 2008 pp. 437-454 q Emerald Group Publishing Limited 0263-5577 DOI 10.1108/02635570810868326 This helps to reduce the collection cost of each organization and expand the market of single-use cameras. For example. 2. the companies now compete for pieces of a bigger pie. 1996. 1980). It implies that organizations can interact in rivalry due to conflicting interests and at the same time cooperate due to common interests (Bengtsson and Kock. 1996). As a result of coopetition. For example.IMDS 108. For this work. It also happens between competitors who tacitly collude to jointly deal with customers or third competitors (Porter. Hunt. Casti and Karlqvist. Fujifilm and Kodak compete with each other. accepting each other’s cameras from photofinishers for recycling and reuse. The factors of coopetition could help the organization to understand the nature of the critical success factors so that they can investigate their current situations of coopetition strategy for improvement. aligning different interests toward a common objective and helping to create opportunities for competitive advantage by removing external obstacles and neutralizing threats. technology agreements and chip use. In coopetition.1 What is coopetition? Coopetition is a combination of cooperation and competition. organizations can achieve mutual win-win situations (Webster. Coopetition strategy is a multidimensional and multifaceted concept that assumes a number of different forms and requires multiple levels of analysis. 2. It means that two or more competing organizations cooperate to create a bigger business pie and simultaneously compete for bigger pieces (Nalebuff and Brandenburger.2 Coopetition in Hong Kong Coopetition implies that organizations can interact in rivalry due to conflicting interests. Coopetition creates value through cooperation between competing organizations. as a result. Coopetition encompasses both economic and social issues related to inter-organizational interdependence. Hitachi and HP compete and cooperate: they compete intensely in the DVD driver and storage area network market while cooperating at a high level in the areas of RISC computers. some organizations may cooperate in one area and compete in another. but they cooperate to tackle the waste disposal problem of single-use cameras. but they have collaborated in developing fuel cell-powered cars after other eco-friendly technologies proved big hits for Japanese automakers in the American market to create a larger overall market for both companies to compete in. among others. and competes on others like price and quality. This paper reports the main findings of the research which is aimed at identifying the critical success factors of coopetition strategy management and validating and prioritizing them in Hong Kong industry. The central and overarching goal is to create mutually beneficial exchanges and added values. coopetition occurs when organizations that compete in the manufacturing space cooperate with one another to define and administer the standards upon which their products will be built. . an organization cooperates with others on different or many aspects of businesslike standards setting and developing the market. and at the same time cooperate due to common interests (Bengtsson and Kock. Literature review 2. 2000). Toyota and General Motors are rivals and two of the world’s top automakers.4 438 standard avoided the costs of a monopolistically supplied standard and. 1992. On the other hand. 1996). 2000). High cooperation) Type 3 Cooperation High Figure 1. maintaining low Critical success factors 439 High Contender (High competition.. it allows them to share competitive advantages and extend synergy to achieve win-win results. industries in Asian countries. Malaysia and Vietnam. Generally.1 Type 1: monoplayer (low competition. By helping coordinate efforts between competing organizations in key areas. Two critical points in coopetition strategy are knowledge sharing and pooling competencies. However. A monoplayer is an organization that does not interact significantly with competitors. our research aims to identify critical coopetition success factors and prioritize them using the analytic hierarchy process (AHP) approach. Coopetition could prove critical to the future development of Hong Kong’s industries. design and service-oriented manufacturing model (Enright et al. Bengtsson and Kock (2000) further demonstrated this in the Swedish brewery industry.In recent decades. such as Korea. Moreover. 2000). we found that there are different types of coopetition. in which different organizations mutually benefit while competing for internal resources and market share. different types of coopetition can be defined in terms of degree of competition and cooperation.1. 1997).. Low cooperation) Monoplayer (Low competition Low cooperation) Low Type 2 Adapter (High competition. The following model (Figure 1) is adopted from Luo’s (2004) “Intensity of Coopetition with a Major Global Rival. Hong Kong industries face strong challenges in technology and quality-driven competition. low cooperation). they are in the situation of coopetition. Hong Kong industries must move from labor-intensive production to capital and technology-based development and from a low-cost manufacturing base toward a high-value added. As a result. which can help strengthen competitive advantages (Zineldin.1 Coopetition model Based on our literature review. in turn enhancing competitive advantage. Pilot studies 3. In view of the importance of coopetition. Coopetition can help make it happen. High cooperation) Type 4 Competition Type 1 Low Partner (Low competition. 2004). as well as production-driven and low-cost competition (Tummala et al. Our findings could help organizations practice better coopetition.” 3. when two or more organizations compete and cooperate simultaneously. 3. where organizations compete to distribute beer to wholesalers but cooperate in bottle returns. Tsai (2002) also found that coopetition can help achieve multi-directional learning. have developed tremendously. The model of different modes of coopetition . To maintain its competitive advantage. Bengtsson and Kock’s (2000) research shows that coopetition benefits the internal resource and market shares of competing organizations. 2001). China has joined the World Trade Organization and opened its markets to foreign countries (Dangayach and Deshmukh. The survey also helped determine the relative importance of critical coopetition success factors (Table I). maintaining a high degree of cooperation as well as a high degree of competition. to understand and confirm the distribution of the different types of coopetition in Hong Kong manufacturing. maintaining high degree of competition and low degree of cooperation. but they cooperate on the single-use camera disposable waste problem. low cooperation). Hitachi and HP have a high degree of competition in DVD drivers and storage area networks while also cooperating intensively in RISC computers in terms of technology agreement and common chip use. maintaining a high degree of cooperation and a high degree of competition. but it also cooperates with competitors. Setting out. Fujifilm and Kodak are rivals. we used a seven-point scale scoring system.IMDS 108. low cooperation).2 Type 2: contender (high competition. high cooperation).065 questionnaires were successfully emailed to targeted companies and a total of 149 responses were returned. which widely represents the Hong Kong manufacturing industries. About 1. maintaining a high degree of cooperation and a low degree of competition. and knowledge sharing. A partner is an organization that maintains a high degree of cooperation and a low degree of competition with other organizations in search of joint synergies created by complementary resources and capabilities. Sony and Ericsson join together to increase their technical. 3. 3.4 Type 4: adapter (high competition. Different types of coopetition can demand different coopetition strategies and focal points. maintaining a high degree of competition and a low degree of cooperation. The mean value of the responses is about 5 (“somewhat important”) and the standard deviation is 1. 3. . which implies most respondents agree that coopetition is quite important.1.1. we conducted a pilot survey. We used a seven-point scale (7 ¼ “very important” and 1 ¼ “very unimportant”) to check the respondent attitudes. However. quality. which maintains a low degree of competition and a low degree of cooperation with competitors. yielding a response rate of 14 percent. Microsoft dominates the computer software market.4 440 degree of competition and low degree of cooperation with competitors. high cooperation). Again. risk sharing. among other things. We found that 46 percent of Hong Kong industries have cooperated with their competitors and more than 80 percent of respondents agreed that coopetition could provide advantages including a synergy effect. They accept each other’s cameras from photofinishers who return empty camera bodies to manufacturers for recycling and reuse. we assumed that most of the Hong Kong industries are type 2 (high competition. The target population of this survey was found in the database of the Hong Kong Trade Development Council. competitive position and market share. A contender is an organization that vies with competitors for market power. however. Adapters are organizations that mutually depend on one another to achieve respective goals.1.24.3 Type 3: partner (low competition. increase of market share. cost reduction. 3. delivery and cost capabilities and to achieve a winwin environment. Sun Microsystems.2 Pilot study on coopetition strategy in Hong Kong We conducted an exploratory survey in early 2006 to investigate the current practice of coopetition strategy in Hong Kong industry. The average mean for all critical success factors is 5. low cooperation).13 5.04.2. along with a management system. The survey results show that. Management leadership is important to coopetition because it is related to how the top management attitude to the coopetition (Kotzab and Teller. There are three significant sub-factors. 4.26 5.1 The proposed coopetition hierarchy model We have identified critical success factors and sub-factors through a comprehensive literature review. In this research.50.73 1. it is important to identify and prioritize the critical coopetition success factors. This shows that. Three factors – management leadership. long-term commitment.97 4.1 Management leadership. Without management commitment.36. This implies that most Hong Kong industries agree regarding factors critical to coopetition.19 Critical success factors 441 Table I. relationship development. on the whole.2.10 4. shown in Figure 2.74 5. we employ an expert interview approach to further confirm critical coopetition success factors. while coopetition is clearly important. 2003).81 SD 0. Relatively few organizations are type 1 (12 percent) (low competition. high cooperation). The weighting of the critical success factors of coopetition . which are elaborated below: Factors Management leadership Development of trust Long-term commitment Conflict management system Knowledge and risk sharing Organization learning Information system support Mean 6. and type 4 (7 percent) (high competition. Only 55 percent conduct strategic reviews regarding coopetition performance or policy.The mean of coopetition critical success factors runs from 4.98 1. to guide an organization’s coordinated activities toward excellence (Ketchen. low cooperation). especially in cases where sufficient resources to deal with all factors simultaneously are lacking.8 to 6.09 1. The factors and sub-factors form a hierarchical coopetition strategy model. with an average of 1. high cooperation).03 1. Hong Kong industries have poor coopetition management. most organizations are type 2 (66 percent) (high competition. coopetition cannot succeed.14 1. as the findings could help organizations understand the factors’ relative importance and help them create improvement plans. 4.12 0. over 75 percent of industries lack long-term coopetition plans. As expected. and communication management. 4. Therefore.52 5. The proposed hierarchy consists of four levels and three categories: management commitment. Standard deviation was small.2 Management commitment Management commitment is important for any initiative’s success. no exceeding 1. 2004). and organization learning – and eight sub-factors are in this category. followed by type 3 (15 percent) (low competition. It reflects the level of management support in implementing coopetition. Management leadership examines how senior executives create and sustain clear and visible quality values. Critical coopetition success factors 4. they reflect management’s attitude toward coopetition. For example.1.1 Vision and Mission 1. Management needs to allocate sufficient resources. Strategy is crafted to develop capabilities aligned with an organization’s long-term goals. Lack of resources can impede operations and even lead to the failure of coopetition.2 Policy and Strategy 1.3. “Vision” refers to the desired future state of your organization.2 Effective knowledge sharing 2. Policy is developed by management and reflects management’s attitude.2.3 Effective risk sharing 3.1. “Mission” refers to the overall function of an organization.1 Development of trust 2.3 Resource allocation 1.1. policy is evidence of management’s commitment to coopetition (Borders et al.2 Conflict monitoring and improvement Figure 2. Together.3. 2004).1 Management Leadership Relationship Development 2.3 Periodical review 2.IMDS 108. lacking machinery or labor can cause production delays.2..3 Organization learning 1. Management must develop efficient and effective coping strategies for acquiring or allocating resources (Ketchen. what it intends to be and how it wishes to be perceived in the future. .. (3) Resource allocation. Resource allocation is important in coopetition.1 Adapting mutual strength and weakness 1.2 Employee participation (1) Vision and mission.2.2 Long term agreement 1.2 Knowledge and risk sharing 2.2 Long-term commitment 1. (2) Policy and strategy.1 Knowledge identification 2. Mission defines customers and markets served. to develop coopetition (Bengtsson and Kock.2 Conflict management system Level 3: Factors Level 4: Sub-factors 1.2.1 Common goal 2.1 Organizational motivation 1. such as capital and human resources.1 Data interchange 3.1 Information system support 3. Hierarchical model of coopetition strategy management 1.2.2.1.1 Conflict resolution process 3. 2001).2 Adapting mutual organization culture Communication Management 3.1. Moreover. 1999).4 Level 1: Goal Successful Coopetition 442 Level 2: Category of factors Management Commitment 1.2 Effective coordination 3.2. distinctive competencies and technologies used (Harland et al.1. Vision describes where an organization is headed.1. 1999).2. Employee participation is very important to the success of organizational learning.4. Two factors – “development of trust” and “knowledge and risk sharing” – and five sub-factors are in this category. 2004). Organization motivation is a very important tool that encourages employees to be active in giving and learning (Lin and Jing. 4. . 4.3 Organizational learning. Organization motivation. If companies want to maintain a long-term partnership. “Organization motivation” and “employee participation” are sub-factors elaborated below: . Every organization has its own strengths and weaknesses. Organizational learning is critical to help organizations succeed in coopetition. Organizations should provide positive learning environments to help motivate team learning and develop a culture of sharing.2 Long-term commitment. 2005). To achieve a long-term cooperative relationship. Long-term commitment can maintain a partnership relationship with competitors. and organizational memory. Without employee support. information distribution. Each organization would like to adopt the other’s strengths to achieve a synergy effect (Zineldin. Huber (1991) considers four constructs as being integrally linked to organizational learning: knowledge acquisition.2. In coopetition. understanding mutual strengths and weaknesses help achieve a deeper understanding and enhancement of the relationship.3 Relationship development Relationship development refers to the development of a good relationship between coopetitors. A lack of long-term commitment can cause the failure of coopetition. Therefore. (2) Long-term agreement. each must adopt one another’s strengths and weaknesses. 2003). Long-term agreements let organizations work together toward achieving strategic objectives (Drucker. 2004). namely: (1) Adopting mutual strengths and weaknesses. 2004). responsibility and benefits. Argyris and Schon (1978) defines organizational learning as the process of detection and correction of errors. promote a culture of sharing and adopt culture friendly to change. dependence can be stipulated in formal agreements or be based on trust. Coopetition can flourish when organizations understand their respective strengths and weakness. which takes place in a complex and changing environment. Critical success factors 443 . Also. It can enhance legitimacy or neutralize possible conflicts is an important factor in achieving common aims (Zineldin. (3) Periodic review. employees should share in their organization’s vision. A healthy and trusting relationship is crucial to achieving successful coopetition. 2004). organizational learning is critical to handling rapidly changing environments (Hao. It may include commitment. The following describes the three sub-factors. Long-term commitment includes long-term agreement with competitors. information interpretation. Periodic review can serve to maintain collaboration between competitors (Chen. 1996). nothing works (Mohamed et al. a periodic review can help maintain a close relationship via information sharing and the reduction of the likelihood of conflict. Employee participation. In coopetition..2. because it adds value to each organization. 2004). communications management includes developing corporate communication strategies. 1999). understanding. 4. Two factors – “information system support” and “conflict management system” – and four sub-factors are included in this category. Moreover. A high level of trust reduces conflicts and causes higher partner satisfaction (Anderson and Narus..IMDS 108. Risk sharing can minimize losses. knowledge sharing can induce synergy effects that are of benefit to both organizations. Information systems are the enablers of organizational collaboration (Boubekri. namely: (1) Common goals. and revision of all channels of communication within an organization. The following describes the two sub-factors. With high-potential projects and investments. Gamebetta.2 Knowledge and risk sharing. it can result in wasted time and failed coopetition. they will also have different targets and wants. Knowledge is a source of competitive advantage.3. useful knowledge must be identified. 2001). 1997. trust enhances cooperative behavior (Doney and Cannon. implementing. 1998). Moreover. Moreover. Risk sharing distributes risk among different parties. Common goals are therefore needed to link up different organizations and their interests (Mohamed et al. Knowledge in general is important but some knowledge may be useless to an organizations (Levy et al. the development of trust is important to maintain cooperation with the competitors. 4. There are three significant sub-factors: (1) Knowledge identification. Also. 4. and managing the flow of information.1 Information system support.3.4 444 4. Different organizations have different organizational cultures. crucial to information exchange. Otherwise. In coopetition. including online communication. Even though they are cooperating together. Hence.4 Communication management Communication management is the systematic planning. For coopetition to succeed. Another advantage is the minimization of loss.. risk sharing within a cooperative relationship can bring about productive synergies (Morgan and Hunt. integrity and toleration are keys to a successful mutual organizational culture. It is a critical factor in maintaining a cooperative relationship between competitors (Chua. (2) Effective knowledge sharing.1 Development of trust. monitoring. (3) Effective risk sharing. and between coopetitors. 1990). acceptance. 1994). 2003). Also information systems can coordinate the production. 2003). risk increases. Different organizations have different goals and objectives. Knowledge sharing is an important objective in potential coopetition. (2) Adopting mutual organizational culture. 1988). Information systems play a paramount role in coordinating and controlling joint ventures (Birnberg. designing internal and external communications directives.4. Trust is an essential element for building a collaborative relationship. respect. Knowledge sharing as an important objective in potential competitor cooperation because it adds value to both organizations. customer . it is a critical factor in maintaining a cooperative relationship between competitors (Carayannis. Risk sharing is critical in enabling competing organizations to cooperate. 1994. Prioritization of critical success factor of coopetition Based on our pilot study survey. Based on monitoring and review. Effective coordination helps provide better communication to internal and external parties. Effective coordination enables organizations to transform valuable enterprise data into shared information for insightful and timely decisions at a lower total cost of ownership (Friedman and Barnes. and can reduce misunderstandings and delays. Managerial judgments are used to drive the AHP approach by assigning weights to different criteria. 2004). most of Hong Kong’s organization – about 66 percent – are type 2 (high competition. Owing to limited resources.2 Conflict management system. (2) Conflict monitoring and improvement. Two significant sub-factors are elaborated below: (1) Conflict resolution process. and the alternative with the highest total Critical success factors 445 . Therefore.4. this paper focuses on prioritizing success factors critical to coopetition model type 2. Effective coordination is indispensable for successful coopetition. 5. Conflict management system enables effective and efficient handling of conflicts. customer communications and deliveries.1 Analytic process hierarchy (AHP) AHP is a decision-making method for prioritizing alternatives when multiple criteria must be considered. creating value in coopetition (Hedberg et al. 5. 2000). Determining success factor importance can help enable organizations to develop priorities when they establish or improve their coopetition strategies. 1992). among other things. The system should enable people to gather information. It also enhances an organization’s ability to respond to a fast-changing market. enhancing their capacity to deal with conflict before it escalates (Crawley. Jeffrey and Sviokla. a good conflict management system is needed to maintain successful coopetition. Organizations should monitor conflict intensity. Resolutions of complex conflict could comprise various phases in which different members of organization participate using various communication methods (Zineldin. Hence. 1995). A mutually accepted conflict management process is indispensable for effective conflict resolution. understand context and participate in decision making. actions can be taken to improve conflict management performance. The following describes the two significant sub-factors: (1) Data interchange.. Monitoring is a basis for the continual improvement of conflict management. We use AHP to prioritize the critical success factors and sub-factors of coopetition.communication and streamlining of deliveries in a way that creates and extracts added value critical to the success of coopetition. As a result of intensive cooperation with competitors. low cooperation). conflict management processes and conflict management skills on a ´ continual basis (Quintana-Garcıa and Benavides-Velasco. (2) Effective coordination. 1992). 2004). it is usually unfeasible for organizations to devote efforts to address all critical success factors and sub-factors concurrently. Data interchange helps provide the latest information involving production. 4. conflict inevitably occurs (Bengtsson. They had an average of more than 13 years’ overall experience in their fields and an about 7 years’ experience on average in handling coopetition. 2001.01. 1994). Tummala et al. Qualitatively.. To ensure that their judgments were consistent. AHP provides a framework to cope with multiple criteria situations involving intuitive. In this study. plastics and stamp making. metals. They all work in upper management in industries including electronics. so the experts came from type 2 organizations. The AHP approach was conducted based on the following process (Lam and Chin. In this research. 5. (2) Data collection by pair-wise comparisons of decision elements. Lai et al. AHP employs redundant comparisons to ensure the validity of judgments and also provides a measure of inconsistency for discarding inconsistent judgments (Saaty. qualitative and quantitative aspects. identified through literature review. 1997). (3) Checking the consistency of judgments. 2002). AHP was adopted to prioritize the critical success factors and sub-factors. The preliminary list of critical success factors. Moreover.1.2 Expert interviews We relied on expert interviews in conducting our AHP study. (4) Calculating relative weights of factors. it adopts pair-wise comparisons to rate decision elements (Cheng and Li. The average overall consistency ratio is 0. Quantitatively.. a complex decision problem is decomposed into a hierarchical structure. meaning that these data are consistent and reliable. The judgments of each expert are finally synthesized using the geometric mean approach suggested by Saaty (1994). we subjected the six data sets to separate consistency tests. Expert profiles . 5. The use of small sample (ten or below) in AHP analysis has been adopted by numerous researchers (Cheng and Li. 2005): (1) Structuring coopetition strategy management hierarchy. 2001). six experts participated.4 446 weighted score is selected as the best (Saaty. was presented for examination to six industry experts for validation. Our prioritization of critical success factors focuses on type 2. rational. decision makers have used AHP to solve problems in more than 30 diverse areas and thousands of AHP applications have been reported (Wasil and Golden. The consistency ratio of these six data sets is below 0.IMDS 108. Worldwide. 2003). 1994). All agreed that the determined factors are critical and comprehensive. 2002. implying that broad applicability to various industries (Table II).3 Results and analysis AHP is a subjective method that does not require the involvement of a large number of experts (Cheng and Li. which is lower Experience in the field Experience with coopetition (in years) (in years) 15 11 12 10 12 20 8 6 7 6 6 9 Expert Expert Expert Expert Expert Expert Expert 1 2 3 4 5 6 Position Sales Manager Purchasing Manager Admin Manager Sales Manager Sales Manager Director Field Electronics Plastics Metals Electronics Electronics Stamp making Table II. conflict resolution process has the highest rate. The second is relationship development and the third is communication management. we break the factors into three groups. between 0. The results appear in Table IV. resources allocation has the highest rate. Coopetition strategy could be a critical success strategy for the future development of organizations. They all work in upper management (Table III).047. The experts have.03 0. at 0. We can note in Figure 3 that local and global weights are the same.03 0. In this group. followed by development of trust and long-term commitment. management leadership has a relatively high-global weight. The global and local weights of the three categories of factors. seven factors and 17 sub-factors. Moreover. it helps to extend the synergy effect to achieve a win-win result. at 0. Expert interview consistency indices .087.032. The lowest rate in this group is the factor effective knowledge sharing 0. mission and policy and strategy are quite close. This is because their preceding level is the goal of coopetition strategy management. The weights of vision. The expert experts confirmed the importance of the critical success factors proposed in the hierarchical framework without adding new items. The lowest rates are periodical review and organization motivation (Figure 5).114 and 0. followed by effective coordination at 0. seven factors and 17 sub-factors in terms of global weights.03 Overall consistency index Critical success factors 447 0. from the highest (knowledge and risk sharing) to the lowest (information system support) (Figure 4). For level 4. The remaining items have quite similar rates. First. there are great opportunities as a result of opening of China market. most organizations are facing intensive competition. the most significant category for level 2 is management commitment. we consider management commitment. 6. followed by adopting mutual organization culture at 0. From the result shown in Figure 3. In level 3.1 suggested by Saaty (1994).05 0. In the group of communication management.018 (Figure 7). Managerial implications Nowadays.015 (Figure 6).than the maximum value of 0. In the relationship development group. However. The lowest rate in this group is data interchange. Since it helps to coordinate competing organizations to join together.01 Table III.01 0.108. on an average. To obtain the overall prioritization of the seven factors and 17 sub-factors with respect to the goal of coopetition strategy management. Table III shows the prioritizations of the three categories. global weights for the factors were calculated. more than 13 years of experience and about seven years in handling coopetition.113. gather and share the advantages.04 0. the common goal factor has the highest rate n at 0. Expert Expert Expert Expert Expert Expert Expert 1 2 3 4 5 6 Individual consistency indices 0. 087 0. Normalized priority weights of coopetition Level 1 Successful coopetition Level 2 Management commitment Relationship development Communication management Level 3 Management leadership Long-term commitment Organizational learning Development of trust Knowledge and risk sharing Information system support Conflict management system Level 4 Vision and mission Policy and strategy Resources allocation Adopting mutual strengths and weaknesses Long-term agreement Periodic review Organizational motivation Employee involvement Common goals Adopting mutual organization culture Knowledge identification Effective knowledge sharing Effective risk sharing Data interchange Effective coordination Conflict resolution process Conflict monitoring and improvement Note: The overall final values are derived from the geometric mean of the expert’s judgment Global priority weights of level 2 0.365 0.333 448 Table IV.240 0.090 0.051 0.296 0.015 0.056 0.583 0.290 0.141 0.121 0. in cooperation design.034 0.050 0.8 0.024 1.630 0.311 0.IMDS 108.121 Relationship Development Communication Management Figure 3. It is the simultaneous elements of cooperation and .417 0. A key issue for coopetition is the notion that.4 Level Factor Global priority weight Local priority weight 1.000 0.244 0.173 0.121 0.114 0.052 0.4 Management Commitment 0.589 0.643 0.29 0.071 0.313 0.2 0 As the future of the organizations is full of threat and opportunities.545 0.394 0.018 0.290 0.282 0.435 0. there is duality in every relationship.143 0.362 0.200 0.032 0.565 0. Competitors may come together to leverage advantage through a temporary partnership by agreeing to share knowledge.000 0.049 0.113 0.047 0.108 0.589 0.6 0.589 0.141 0.026 0.031 0.370 0.357 0.619 0. organizations need to cooperate with competitors and share the advantages of each other to achieve the synergy effect and achieve the common goal and interest.083 0.393 0.668 0. Global priority weights of level 2 0.667 0. 034 0. 1996).114 0. was developed in this paper.365 Critical success factors 449 Figure 4.2 0. and increases effectiveness and efficiency. .051 0. the manufacturer would basically be adding to the top line of the competitor. one argument in favor of coopetition is that. It can reduce up-front costs.031 1 Resources Allocation Vision and Mission Policy & Strategy Long Term Agreement Employee Involvement Adapting Mutual Strength & Weakness Periodical Review Figure 5. removing external obstacles or neutralizing threats.09 0.4 0.3 0.050 0. Global priority weights of level 4 – management commitment competition (Nalebuff and Brandenburger. which was mentioned in above.200 0. learning costs. if the supplier of the standard is also the competitor.1 0 Global priority weights of level 4 – Managment Commitment 0. It is often done through the strategy of coopetition to influence the organization’s fight with competitors. A generic assessment framework with weighting of coopetition management. it is essential for the organization to develop this strategy with the competing organization to create a win-win situation with lower cost.108 0. making it stronger.052 0.056 0.Global priority weights of level 3 0.143 0. Coopetition aligns different organizations’ interests to become the same objective. Global priority weights of level 3 0. Therefore.1 0 Management Leadership Long Term Commitment Organizational Learning Information System Support Development of Trust Knowledge & Risk sharing Conflict Management System 0. providing possible competitive advantages by offering opportunities.071 0.141 0.083 0.2 0. Coopetition is a viable and valuable strategy. Moreover. respondents consider management commitment to be the most important factor.113 0. For the three categories of the factors.032 0.05 0. 7. the most important factors are management leadership and development of trust.016 450 Figure 6. Global priority weights of level 4 – communication management Effective Coordination Conflict Monitoring & Improvement Data Interchange It helps organization to assess their current coopetition management performance to thus identify room for improvement.049 0.1 0. Respondents recognize that the relationships between competitors are very important. It enables organizations to understand their performance in coopetition management practices and it helps improve coopetition management performance.04 0.02 0 Conflict Resolving Process 0. Respondents stress that top management do not provide clear direction and support to collaboration with competitors. Among the critical success factors.018 Figure 7. They also .IMDS 108. Global priority weights of level 4 – relationship development 0 Common Goal Adapting Mutual Organization Culture Knowledge Identification Effective Risk Sharing Effective Knowledge Sharing Global priority weights of level 4 – Communication Management 0.4 Global priority weights of level 4 – Relationship Development 0.15 0.087 0. Discussion This paper studies the critical success factors of coopetition strategy management in Hong Kong industry. because good relationships help develop mutual trust and sharing.047 0. They recognize that management needs to provide support and consistent commitment to handle coopetition strategy management successfully. Relationship development also proves to be critical.06 0. The weighting was developed through expert interview with several experienced professional experts using the AHP approach.024 0.026 0. The categories. Among critical sub-factors. factors and sub-factors identified in this research are generic and the prioritization of these factors focuses on type 2 companies. Additionally. The seven critical success factors and 17 sub-factors form a hierarchical model of coopetition strategy management that can provide organizations with directions and targets for establishing and improving their coopetition management practices. It can help Hong Kong industries gain awareness of the nature and benefits of coopetition strategy management. vision and mission. human resources. they can identify areas to address. 8. This research provides several contributions to the coopetition strategy literature. Vision and mission are important too. the accomplishment of most of the critical success elements necessitates joint efforts between collaborating parties. Prioritization is of great importance because it is always unfeasible to address all factors concurrently and they can focus on the most critical factors first and then gradually address the others. In fact. technology. Understanding the nature of the critical success factors can help companies investigate and improve their coopetition strategies. and long-term commitment to be the most important factors. Different organizations have different goals and interests. it is hard to accomplish coopetition. Respondents consider common goal to be important. Also.heavily stress commitment to collaboration with competitors. We have found management. Without sufficient resources. vision and mission are critical to the success of coopetition. too. The interviews helped us investigate coopetition best practices and confirm our proposed critical success factors to a high degree of certainty. By reviewing their current practices. identifying common goals play a critical role. management should provide sufficient resources in developing coopetition. Resource allocation refers to the use of capital. leadership development of trust. Prioritizing the factors and sub-factors can help companies understand their relative importance and devise Critical success factors 451 . and in developing coopetition. development of trust plays an imperative role in reducing problems between competitors. No further factors need to be added to the proposed hierarchy. Respondents believe a successful coopetition strategy can be best maintained when trust exists. because management may not consistently commit to cooperating with competitors. because they are related to management attitude and reflect management intentions. Gaining a competitor’s trust is essential to maintaining a collaborative relationship between competitors and is critical to ongoing collaborations such as the sharing of advanced technology and moving to deeper levels of cooperation. Common goals connect organizations in ways critical to maintaining successful collaborative relationships. and common goals to be the most critical to successful coopetition strategy management. respondents consider resource allocation. Therefore. focusing instead on immediate benefits and short-term gains. Conclusion This paper has identified and prioritized the factors critical to successful coopetition. vision and mission reflect the level of management support and attitudes towards coopetition. The model provides a platform for organizations seeking to improve their coopetition management. We determined the relative importance of our initial proposed critical success factors by consulting a group of experts. 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