Coopetition as a service innovation strategy

Innovation is an important source of competitive advantage for firms in almost any industry and of any size. Innovation (Park, Manish, & Gnyawali, 2014; Quintana-García & Benavides-Velasco, 2004; Wu, 2014) and value creation (Bengtsson, Eriksson & Wincent, 2010; Ritala, 2009) have among others been identified as key drivers of coopetition, that is cooperation between competitors. You could ask if coopetition is a good idea, since the challenges are high (Fernandez, Le Roy & Gnyawali, 2014; Raza-Ullah, Bengtsson & Kock, 2014). Coopetition is filled with tension between value creation (cooperation) and value appropriation (competition) (Fernandez et al., 2014; Park et al., 2014). However, according to Peng, Pike, Yang and Roos’ (2012) study, coopetition enabled the partners to achieve higher performance levels, at a faster pace, which would have been impossible to reach alone. Coopetition allows for a combination of both similar (Galvagno & Garaffo, 2010; Luo, Rindfleisch & Tse, 2007) and complementing resources, skills and comptenecies (Bonel & Rocco, 2007; Chin, Chan & Lam, 2008; Garaffo & Rocco, 2009). At the same time coopetition may provide competitive pressure on the partners to be alert and improve their activities, which is expected to generate more positive innovation outcomes (Chiambaretto, Bengtsson, Fernandez & Näsholm, 2019). However, previous findings on the impact of coopetition activities on innovation outcomes provide mixed evidence (Navío-Marco, Buijidos-Casado & Rodrigo-Moya, 2019). Some authors argue for a positive relationship between coopetition and innovation performance (Gnyawali, He & Madhavan, 2006), due to the competitive pressure on partners to develop, whereas other conclude that the contradictory logic in coopetition may hamper innovation outcomes (Bengtsson et al., 2010). Consequently, coopetition as an innovation strategy can be both beneficial and risky (Bouncken & Kraus, 2013; Chiambaretto et al., 2019). To be noticed is that none of these studies have particularly discussed services. The extant research on coopetition and innovation has so far focused on product innovation. Coopetition as a driver for service innovation has been less in focus. Coopetition in service innovation has been acknowledged in, for example mobile-TV services (Ritala, Hurmelinna-Laukkanen & Blomqvist, 2009), the bank sector (Broløs, 2009) and the grocery business (Kotzab & Teller, 2003). However, service innovation is seen as an important engine of differentiation and growth (Gallouj & Weinstein, 1997). Given the importance of service innovation and coopetition, it is essential to broaden our understanding of the phenomena.Ritala et al. (2009) call for more research on coopetition as a service innovation strategy. Bouncken, Gast, Kraus and Bogers (2015) also conclude that there is a quest for more research on the background and implications of coopetition for innovation, especially considering the different types of innovation. The contradictory findings on impact of coopetition on innovation performance obtained from previous studies, also gives a reason for further research on coopetition in service innovation. The aim of the study is to narrow this gap by conducting a study that offers evidence of coopetition in a service innovation setting. The research questions are as follows: •Should firms prioritize coopetition to amplify service innovation?The reason for mixed evidence in previous research is that innovation performance depends on the context of the coopetition. Accordingly:•Does the partners’ proximity and knowledge enhance coopetitive service innovation?•Does the partners’ cooperation with customers additionally enhance coopetitive service innovation?The study provides an examination of the relationship between coopetition, service innovation and the characteristics of the firms coopeting in the European context. The aim is addressed through a quantitative analysis based on the Eurostat Community Innovation Survey (CIS). The survey collects information on firms’ innovations and innovation activities in EU. One of the topics in the survey concerns different types of innovation (e.g. service innovation) in coopetition.