Handbook of Strategic Account Management: A Comprehensive Resource

‘Vertical coopetition’: the key account perspective

by Sylvie Lacoste

Abstract

Why do key accounts combine opposing types of relationship with their suppliers? The author has chosen to term this new hybrid form of supplier relationship management, which combines cooperation and price-competitive transactions and reflects the tension between value creation and value appropriation, ‘vertical coopetition’. She investigates the use of this concept in the context of an in-depth qualitative study, involving, first, an exploratory field study and, second, four case studies involving leading industrial MNCs (multi-national companies). The results indicate that ‘vertical coopetition’ occurs in two forms: when the price-competitive approach is predominant but some cooperation features are still to be found; and when cooperation is predominant, but appeals to competition are still made. Mutually opposed aspects of each form are linked and explained by three pivotal mechanisms, which the author calls ‘strengthening’, ‘correction’ and ‘commuting’. Finally, the study reveals that, increasingly, the key account's brands or business unit value are explanatory forces of ‘vertical coopetition’.

Introduction

‘Coopetition’ is a term which arose in the 1980s to refer to inter-firm relationships that involve simultaneously both ‘cooperation’ and ‘competition’. The concept links two mutually exclusive types of relationship and merges them into a hybrid form. The concept has attracted an increasing amount ...