Cooperation and Competition in the Automotive Industry - Comparing German and Japanese Supplier Management

“Co-opetition”, meaning the parallel existence of two conflicting
mechanisms – namely competition and cooperation – is a much discussed
phenomenon in the literature on inter-organizational cooperation. This
problem is of particular relevance in the automotive industry because
the rising pressure of improving quality and reducing prices has led to
the development of cooperative ties, which exceed pure market
interactions. Here, research on strategic networks – i.e. networks
governed by a nodal firm (the focal actor) could be most fruitful. The
central role is taken over by the manufacturer who – through business
relations – has direct ties to every other (supplier) firm in the
network. Because of similar capabilities or market commonalities these
supplier firms often act as direct competitors.
In this industry, it seems, that competition is not only tolerated but
also desired as it is often purposefully enhanced by additional
efforts. Such efforts include dual and multiple sourcing strategies
(the same part, component or modular is sourced from more than one
supplier). Thus, the risk of getting dependent on just one supplier who
could abuse this situation by scaling up prices in minimized. Despite
these competition-inducing mechanisms manufacturers are – at the same
time – aiming at establishing cooperative relationships among their
suppliers. Here Japanese manufacturer-supplier networks act as a role
model by institutionalizing so called supplier associations
(kyoryokukai) that – through strong multilateral ties – facilitate
knowledge-sharing processes on the one hand and simultaneously try to
maintain competitive elements, on the other. It seems that
manufacturers are sharing the opinion that both mechanisms – namely,
cooperation to enable knowledge transfer as well as competition to
generate innovation and cost transparency – are of high importance.
My research focuses on the question if Japanese firms are really more
successful in managing the paradox of coopetition. For this purpose, I
have been conducting interviews with several Japanese and German
supplier firms as well as OEMS.

Short CV:
Miriam Wilhelm is a Doctoral Student at the Institute of Management,
Free University Berlin. She is currently being hosted by the Institute
of Social Science, Tokyo University.