Co-opetition: governance for cooperative product development

In today’s global market, where competition is fierce, companies must continuously innovate to stay ahead. However, many struggle with limited expertise, especially in complex areas like technology and IT. So, how can companies still rise as leaders in innovation or become “fast followers”? At valantic, we believe that co-opetition is the key to accelerating successful development processes.

Cooperative product development: a winning competitive edge

Unity is strength: Collaboration between companies to bring innovative products and business models  to life could be the magic pill for staying ahead in the market. The benefits? Accelerated development, efficient use of resources, and the creation of synergistic and network effects.

The challenge, however, arises when partners are also competitors, blurring market boundaries. The silver lining? With a well-organized structure in place, nothing stands in the way of successful cooperation between otherwise competing companies.

Corporate governance: the foundation of stable co-opetition

From cooperation parameters to solution development

At valantic, we refer to this type of collaboration as “co-opetition”. Due to the overlapping domains between cooperating competitors, a well-defined governance framework is essential. Governance serves as the structure for managing, controlling, and safeguarding the organization, incorporating all tools necessary to build trust both internally and externally. In the context of co-opetition, governance must be clear, mutually beneficial, and fully compliant with legal standards.

A step-by-step guide to governance for cooperative product development

1. Identifying cooperation parameters

The clarification of objectives, intentions, and modes of implementation of the cooperation should be the first step and must be anchored in the foundational structure as the organizational purpose – often formalized in a memorandum of understanding. This document should also address the following points:

• Types and extent of memberships, along with entry and exit mechanisms
• Rights, obligations, and privileges of members
• Composition of voting rights based on various parameters
• The voting process for resolutions
• Decisions that require voting

2. Addressing key questions regarding governance formation

After establishing the cooperation parameters, the process of governance formation begins. This multi-stage process addresses key questions at each phase of development.

2.1 Build-up: How can the partners’ contributions and voting rights be defined? How will intellectual property be protected and further developed? What strategies will be used for the operational and organizational implementation of the cooperation?

2.2 Establishment: How can coordination mechanisms and participation opportunities be adapted? Are there time-flexible frameworks that allow for easy entry and exit? What incentives can encourage active participation among diverse member types?

2.3 Further development: When are control mechanisms and arbitration bodies necessary? How can core functions be maintained while ensuring operational flexibility in the future? What processes should govern exits?

Marc Lamhofer

Manager

Volker Scholz

Partner & Managing Director

valantic Division Digital Strategy & Analytics

Do you want to take a cooperative approach in your company?

Would you like to develop your business model cooperatively and align it both organizationally and constitutively? Reach out to our experts today!