Coopetition in New Product Development Alliances: Advantages and Tensions for Incremental and Radical Innovation

TLDR

Coopetition can facilitate product innovation, but its suitability for radical versus incremental innovation remains debated. The paper argues that early and late phases of coopetitive NPD confer different benefits and risks for incremental and radical innovation, and proposes hypotheses on coopetition’s role. Using a quantitative dataset of 1,049 German medical and machinery NPD alliances, the authors test these hypotheses based on a tensions‑approach to value creation and appropriation. Results indicate coopetition benefits incremental innovation in both pre‑launch and launch phases, while radical innovation gains only during the launch phase.

Abstract

Abstract Coopetition (collaboration between competitors) can facilitate product innovation, but there is still debate about how it is suited to radical or incremental innovation. This paper argues that the early and later phases of coopetitive new product development (NPD) pose different benefits and risks for the innovation types. Building on the tensions approach to value creation and appropriation, we develop a series of hypotheses on the role of coopetition in NPD alliances and focal firm's innovation output. The hypotheses are tested on a quantitative data set of 1049 NPD alliances in the German medical and machinery sectors. The results show that, while coopetition is advantageous for incremental innovation in both pre‐launch and launch phases, radical innovation benefits from coopetition in the launch phase only.