Managing coopetition to create opportunities for small firms

Abstract

This article investigates how coopetition enables small and medium-sized enterprises (SMEs) to create entrepreneurial opportunities in fast-paced industries. We explore the managerial challenges SMEs face when collaborating with large powerful competitors, and examine how they balance this relationship to create and sustain business opportunities through coopetition. Based on three exploratory case studies in the information technology and telecoms industry, the article develops a theoretical model suggesting that SMEs can manage the liabilities of smallness and newness, and sustain independence in and balance coopetitive relationships with large firms if they develop alliance portfolio managing capabilities. We find that the ability to build legitimacy, enhance agility and create role flexibility plays an important role in balancing and navigating among different coopetitive relationships, thereby creating and sustaining opportunities.