We all have read about Coopetition: how to collaborate with competitors.

Now we are beginning to learn about the opposite: How to compete with collaborators. Shall we call it: Collabetition?  

What happens when your strategy leads your organization to pursue what strategy expert Koby Huberman calls “more to same” – selling higher-value higher-margin products to your existing customers? What if that strategy brings you head-to-head with those with whom you collaborated, crucial strategic partners, because you are now supplying products that your partners once provided? 

This now seems the case with Google. Google is launching Knol, a user-written ‘wikipedia’, in which users write content. Google’s business model has until now been that of a ‘conduit’ – a search engine, the leading one, that brings users to content generated by others. When Google begins to generate ‘content’ by itself,  it becomes a competitor to some of its key collaborators, to whose sites Google’s search engine brings millions of eyeballs.

Google insists this is not the case, that it remains a ‘conduit’. But the launch of Knol, and what I believe will be Knol’s rapid growth in usage, belies this. It was probably inevitable that Google, in its search for growth, would have to move beyond the search business and into content creation. How it manages this ‘invasion’ will be crucial for Google’s future.

This has happened before. Years ago, there was tension within the “Wintel” community – the collaboration between Windows (Microsoft) and Intel (microprocessors), as Intel put more and more software onto its chips, threatening to move up the value chain and appropriate some of Microsoft’s revenues. A competitive war was averted, partly because Intel has now moved to seek value elsewhere, for instance in mobility, mobile devices and wireless. Collabetition has also pre-empted key strategic moves – Dell’s direct-sale model has not been embraced or copied widely in the PC business, partly because for HP or IBM to engage in direct sale would place them directly in competition with their collaborators, value-added resellers.    

Strategically, moving up the value chain is crucial for growth and profit. Often, doing so leads to collabetition –  head-to-head competition with those in the value chain with whom you closely collaborate.  How to manage this key transition takes wisdom and planning. A good example of a company that managed it successfully is Infosys… see the fine case study by D.V.R. Seshadri on how they did it*.  
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*See D.V.R. Seshadri and James Narus, “Value Chain Migration at Infosys” (A), Int. Journal of Technology and Innovation Management  Education, vol. 1, issue 1, 2006 (available on request from smaital@mit.edu)

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