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'Coopetition' Trend Benefits Industry, Customers, Says Ford Motor Company

7 August 1998

'Coopetition' Trend Benefits Industry, Customers, Says Ford Motor Company

    TRAVERSE CITY, Mich., Aug. 6 -- The highly competitive global
automotive market that is emerging is taking industry cooperation among
competitors to a new level of "coopetition," said Bill Powers, Vice President
- Research, Ford Motor Company .
    "Coopetition isn't a word in the dictionary, but it should be," said
Powers, "with a definition something like this:  Working with and especially
developing information with business competitors; and industry consciousness
among market-driven organizations.  It's the strategic combination of
competition and cooperation across boundaries."
    Speaking at the University of Michigan Management Briefing Seminars,
Powers noted that societal expectations and demands primarily in the areas of
environment and safety -- along with individual companies' continued pursuit
of competitive advantage -- have driven companies to look for unique solutions
to succeed in a rapidly changing industry.
    Powers cited two well-defined situations where coopetition is most
beneficial:  when certain technologies produce little product differentiation;
and when research and development is directed at a societal good.
    In both situations, working together avoids duplication of effort on
technology that has little proprietary advantage, he explained.  Coopetition
also makes sense when the supply base is essential to program success, and
when it is essential to lean manufacturing.
    The recognition of these benefits led to the formation of the Automotive
Composites Consortium (ACC) in 1988, followed by the formation of USCAR in
1991 and the Partnership for a New Generation of Vehicles (PNGV) in 1993.
    A more recent example was last year's formation of an alliance between
Ford, Daimler-Benz AG and Ballard Power Systems to develop fuel-cell
technology.  Powers announced today the new name of their joint enterprise:
Ecostar Electric Drive Systems Company.  Ecostar will be developing advanced
electric drive systems for battery-powered and hybrid electric vehicles as
well as non-automotive applications.
    Powers noted that "even inside of coopetition, competition is in full
bloom -- including coopetition at the farthest edges of technology," stressing
that Ford plans to be at the head of the pack.
    "Coopetition, to us, is one more means to achieving competitive advantage.
If that sounds like a contradiction, it's not.  Simply put, it means that we
have to figure out how to make better use of coopetition than anyone else.
And we know that our competition will be trying to figure out the same thing."
    In the coming years, Powers predicts more coopetition in the form of:
    *  Trans-national auto industry relationships that respond to global
       markets.  Some will be joint ventures in mature markets such as Ford
       and Volkswagen in Portugal (AutoEuropa).
    *  Expanded OEM-supplier relationships in emerging market regions.
    *  Formal and informal relationships with partner industries.
    *  PNGV-like partnerships with governments outside the U.S. that respond
       to global environmental challenges.