Coopetition, a Scandinavian Speciality?

The Scandinavian Outdoor Group unites competitor outdoor companies. It’s a kind of cooperation that’s just right for the times.

Text: Anna Henriksson & Gabriel Arthur Photo: Sofia Karlström

The concept of “coopetition” is a business term that is coming up more and more frequently. In theory, it’s easy to see the advantages. Competing companies identify a number of “pre-competitive” areas and find joint solutions that should benefit all who are involved.

This means that the cooperating companies can take on expensive projects, set common standards or establish themselves in new markets.

But what is needed to go from vision to action?

One person that has studied coopetition in depth is Tatbeeq Raza Ullah, Assistant Professor at the Umeå School of Business, Economics and Statistics in northern Sweden. His main message is that a great deal of trust among the companies is required in order for them to achieve the desired goals.

“First, companies need to both trust and distrust each other. Trust generates the willingness to become vulnerable based on the belief that the partner will not behave opportunistically. Simultaneously, distrust based on constructive skepticism and watch- fulness prompts companies to critically observe the partner’s behavior and thus keep them on guard to prevent unpleasant surprises from cropping up.”

“Second, companies need to possess a coopetitive mindset that allows them not only to accurately understand why it is beneficial to simultaneously cooperate and compete, but also how to contribute to your own as well as your competitor/partner’s capabilities.”

It has often been said that “trust” is typical characteristic for Nordic societies – in terms of community, politics as well as business. Is this what makes coopetition something that functions particularly well in Scandinavia?

SOG, with its 69 member companies and the joint flagship of the Scandinavian Village, seems to be an example of this. Here, visitors encounter several of the Scandinavian brands under one roof – companies that often compete for the same customers. But through their cooperation in the Scandinavian Village, the companies have, among other things, succeeded in increasing the international interest in Scandinavia as a leading region for the outdoor industry.

Last year, the thesis “Coopetition in Industry Associations: A study of Scandinavian Outdoor Group,” was published by Erika Granqvist and Alex Mugrauer at Umeå University.

“Usually, coopetition occurs behind the scenes away from the customers, but here, the SOG members are cooperating side-by-side right in front of the customers. This way, they co-brand themselves and can therefore leverage the perception of the Scandinavian outdoor industry,” says Alex Mugrauer. “We concluded that SOG plays a salient role in facilitating cooperation between competitors. It affects the coopetitive relationships through activities whereby personal bonds are built and trust is created, which also leads to greater cooperation beyond the boundaries of SOG,” says Erika Granqvist.

Erika Granqvist and Alex Mugrauer believe that the voluntary aspect has been an important factor.

“We found a remarkably high level of trust within the network, which we believe stems partly from the relatively small size of the network where employees from different companies know each other on a personal level,” concludes Alex Mugrauer.

Researchers Adam M. Brandenburger and Barry J. Nalebuff at Harvard and Yale University coined the concept of ‘coopetition’ in the late 1990’s. They demonstrated a business model wher eby a c ombination of cooperation and competition benefited the companies.