Posted: September 4th, 2013
When Is It Best To Compete And When Is It Best To Cooperate?
Competition and cooperation within and between entities is of immense importance. Competition is important because it enables entities to attain relevance by constant changes to meet the needs of its customers by evolving. On the other hand, cooperation between organizations is vital as it enables organizations to share insights and ideas as how to grow their respective entities. Cooperation enables entities to learn new ways of doing things, which might prove to be of great value to the health and overall success of an entity. Individuals within organizations, which either compete or cooperate, are bound to gain a lot of knowledge from each other in terms of planning, strategizing, marketing and more so products development.
The act of competing and cooperation needs an approach, which is bound to accrue maximum benefits for an entity. Competition entails a marketing strategy or plan, which the entity uses to gain competitive advantage over its competitors. For instance working in a multinational company entails the need to either cooperate or absorb the medium entities to grow the market share as well as accrue more profits. Working for a multinational company creates a sense of superiority. This occurs whereby an entity is able to exert pressure on its competitors by fierce marketing strategies like price cuts on services and products, which are relatively lower than the market prices as well as the competitor prices within the markets. The organizations define what products are to be developed and how best they suit the market niche, for which they are intended. This enables the company to make budgets for such undertakings and the right work force to push such agendas forward. Cooperation on the hand is necessitated by the need to gain mutual knowledge by the entities involved in a cooperation agreement. The costs and benefits are contrasted before such an undertaking to get the levels of viability of such cooperation agreements. This is a planning phase, which is vital for the establishment of cooperation agreements. The cooperation between entities is necessitated by the need to stay relevant in the market or for mutual project undertakings. Entities form cooperation to undertake issues like research and development of new products within the market. A big multinational company like Coca-Cola might force a lesser company in the beverage industry like Pepsi to jump into cooperation agreements for specific reasons. Such might be to reduce the ability of the company to compete by studying their strategies. Cooperation necessitates competition; this is whereby an entity is subjected to the formation of strategies to outdo the other entity. Coca-Cola might be forced to market vigorously via print media, audio visuals and internet marketing to retain relevance and advantage over its competitors.
Establishment of contact between organizations is the initial step in forming cooperation between organizations. The organizations become acquainted before evaluating their existence in the market and are informed to undertake projects, which might require large amounts of initial capital, which can only be sourced by organizations coming together. Mutual understanding and benefit accrued form the existence of entities in cooperation agreements enables organizations to have a bargaining power in terms of sourcing for labor, funds and recognition within their respective markets. Cooperation is driven by the need to respect each other maybe in the establishment of pricing strategies such that entities in cooperation do not increase or decrease without the consent of an entity. Competition on the other hand is driven by the need of entities to establish competitive advantage and seize market shares from their competitors. For instance, Coca Cola and Pepsi might form cooperative agreements to undertake research in better cola products within the beverage markets. This is because both entities contribute to such undertakings reducing the cost burden form being incurred by a single entity.
Study and Act
I have studied the behavior of entities within different markets and their relation with each other in terms of cooperation and competition. Cooperation is mutual understanding and equal share of benefits of organization, which however depends on the size of the entities within the organization. In addition, the entities within the cooperation are able to get vital knowledge, which might be valuable to their growth. Some entities lose their market share to other organizations because of loss of vital information. In addition competition is healthy and should be encouraged within and between organizations as it enhances the innovation and creativity within and between entities leading to either reduction in prices or development of new a and better commodities in comparison to their predecessors. Both terms are vital in their respective and unique ways and might be evaluated in terms of the benefits and costs to inform on the level of viability. I think that cooperation and competition are mutual events whereby one cannot be executed without the consideration or presence of the other.
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