Co-opetition Strategies For The Firm With Proprietary Technologies With Customer Behavior

The increasing globalization process has led to an increasingly interconnected human society,co-opetition(competition and cooperation)has become a new business strategy for many high-tech firms.The border between cooperation and competition has become vague,and competitors are involved in collaborative business activities.A firm with proprietary component/technology(MPC)often has a dominant or even monopolistic position in a technology or component due to its exclusive technology or patent protection.As a result of their core technology advantage,these MPCs can take the initiative in co-opetition and often operate two businesses simultaneously to make the most of their technological advantage:the technology business and the product business.On the one hand,the MPC can license their core technologies to competitors and earn licensing fees,and on the other hand,it can also apply their core technologies to their own end products to produce and sell their own branded products to increase revenues.Therefore,the MPC needs to balance their technology and product businesses by coordinating their co-opetitive relationships with their competitors.Whatever the form or strategy of the cooperation,the aim for the MPC is always to better translate the technology in the consumer market by selling the end products.It is well established that the issue of product sales at the end market is inevitably influenced by consumer behaviour.In other words,consumer behaviour can influence the end-product sales of co-opetitive firms and,ultimately,the choice of the co-opetition strategy between the technology licensing and product selling of the MPC.Therefore,the key research question in this paper is to investigate the impact of consumer behaviour on the coopetition strategy,which is rarely addressed in existing research.Based on the three behaviours(strategic consumer behaviour,reference price effect and reference quality effect)that correspond to the three factors that consumers care most about when purchasing products(time,price and quality),this paper analyses the MPC’s optimal co-opetition strategy by developing a theoretical model.Chapter 3 explores the dynamic co-opetition strategy between the MPC and the original equipment manufacturer(OEM)based on the strategic waiting behavior of consumers.the MPC can use its technological advantage not only to influence the time-tomarket of the OEM’s end product through the supply of core components,but also to change the time-to-market of its own products,thereby responding to the strategic behavior of consumers by dynamically adjusting their co-opetition strategies.It is found that the MPC tend to adopt a "staggered peak travel" strategy,whereby two firms enter the market one after another.Only one firm’s product remains in the market during the pre-market period,when the consumer product is more highly valued.In addition,the model is extended to test the generality of the results in terms of time to market of consumer,cost differentiation between the two firms,and the existence of third-party component suppliers.Chapter 4 explores four different choices of co-opetition strategy for the MPC in product markets with reference price effects:single-product monopoly,co-opetition with technology licensing,product line extensions and supplier strategies.The MPC has to choose between external cooperation and internal expansion.It is found that,with the exception of the supplier strategy,all three strategies can be optimal under certain conditions for maintaining control of the end-product market.In addition,this study examines the impact of the choice of the reference point on the co-opetition strategy.Chapter 5 examines how the MPC trade-offs between licensing technology and selling products to coordinate competition and cooperation after achieving a technological R&D breakthrough,under the influence of reference quality effects.The new technology are classified as disruptive or improving in terms of the degree of technological R&D innovation,and the optimal co-opetition strategy for the MPC is examined for different types of technologies.The study shows that reference quality effects have a significant impact on the MPC’s co-opetition strategies.For the disruptive technology,the firm only cooperate with competitors that can produce a high-quality product,and it gradually abandons cooperation in favour of monopoly as the intensity of the reference effect increases.In the case of the improvement technology,the co-opetition strategy is determined by the quality of the competitor’s product,the extent to which the new technology improves the product quality compared to the old technology and the strength of the reference effect.