Usually seen only in industry, cooperation between competing companies can also be applied to the challenges of sustainable development. OK, but how? And to meet what needs? We get up to speed on ‘coopetition’.
A portmanteau word created by merging ‘cooperation’ with ‘competition’, ‘coopetition’ refers to cooperation between a company and one or more of its competitors. In this type of arrangement, ‘coopetitors’ may share particular resources such as R&D, supplies or distribution.
There are many persuasive examples in manufacturing industry, including Airbus, Eurocopter and Ariane. It is this kind of alliance between competing companies that has enabled such programs to become a reality and achieve the international success they clearly have.
But coopetition is also a fairly common strategy in the aircraft and automotive industries. For example, the alliance between Renault-Nissan and Daimler resulted in the joint Twingo-Smart and Kangoo-Citan technology platforms ten years ago. Another collaboration, this time for vans, made it possible for a Renault-Nissan diesel engine and transmission to be shared with Daimler for its Mercedes-Benz Vito range.
Working together for greater environmental efficiency
Looking beyond automotive production lines and major aircraft programs, coopetition is also of interest to manufacturers that use it to design methods, tools and sometimes even communication campaigns, usually in support of an environmental commitment.
More specifically, Saint-Gobain as a contributor to the Tipcheck program set up with some of its competitors as part of the European Industrial Insulation Foundation (EiiF). The organization aims to provide industrial companies with solutions that help them save energy and reduce CO2 emissions by improving their insulation systems. Two main tools have been developed to date. The first is a standardized energy audit. The second is a software program that calculates heat loss using measured surface temperatures as input data.
Similarly, the Renovate Europe political communications campaign launched by EuroACE, the European Alliance of Companies for Energy Efficiency in Buildings, is funded by a number of companies that compete with each other either directly or partially, including Saint-Gobain. But for what purpose? To reduce the total energy demand of the EU building stock by 80% by 2050 through legislation and ambitious state-sponsored renovation programs.
Making virtuous solutions a reality
But coopetition isn’t just about increasing the efficiency or profitability of partners that choose this kind of arrangement; it’s also a mechanism that can improve the way in which industry addresses the challenges of sustainable development. This is particularly true in public transportation.
For example, in 1993, Lufthansa reached an agreement with German railways (Deutsche Bahn) to share coverage of unprofitable domestic routes. In return for Lufthansa reducing the frequency of its flights on these routes, Deutsche Bahn allowed it to sell rail tickets for its lines. In July 2020, Hanover, Leipzig and Basel in Switzerland were added to the 14 German cities already covered by this coopetition agreement. All these rail links create optimal connections with Lufthansa flights, at the same time as reducing the airline's environmental impact.
Creating a virtuous circle (at the same time as protecting your business)
Agrifood is certainly not being left behind when it comes to coopetition and sustainable development. In a research article published in French and entitled Coopetition for the common good - The strategies used by grain merchants to manage GMOs, researcher Mourad Hannachi explains how, despite being competitors, some French grain merchants have successfully coordinated their efforts to manage the presence or absence of genetically modified crops in crop production areas. This is important because a field producing GMO crops can cross-contaminate ‘conventional’ crops in another field.
The article makes particular reference to grain merchants in Alsace that have chosen collectively to refuse to produce GMO corn. If they had not done so, the risk was that each would have been faced with the risk of cross-contamination and the resulting loss of market share.
In another area entirely, Danone and Nestlé Waters got together in 2017 with the US company Origin Materials to design plastic bottles made from 100% bio-based materials (cellulose fibers). The two giants were joined a year later by PepsiCo. All three corporates subsequently built a prototype demonstration plant in Ontario, Canada, with the capability to manufacture 18,000 metric tons of this bio-sourced plastic material.
As they face up to the immense challenges posed by the environmental emergency, more and more companies - sometimes competitors - are beginning to work cooperatively. Pooling expertise, committing joint investment, launching communication campaigns, sharing manufacturing processes; these are just some of the cooperative models already seen. Forms of cooperation vary, but with efficiency gains and cost reductions to be made, the benefits of this approach lie primarily in the ability to implement innovative and virtuous solutions that benefit the environment.
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