Cooperate “and” compete: Coopetition strategy in retailer-supplier relationships

This study aims to examine the strategic implications and managerial outcomes of the concurrent use of cooperation and competition in vertical channel relationships. This study employs a structured questionnaire to gather data regarding vertical channel relationships in China. Whereas the academic literature has emphasized cooperation between channel members because of the interdependence between them, in reality, retailers may accept competition as just another part of doing business with suppliers. The outcome variables used may not be comprehensive. In particular, the authors choose the flexibility of channel resources to stand for private benefits and joint benefits to represent common benefits, and though these variables certainly represent the intended benefits of the ambidextrous strategy, it remains to be seen whether other benefits may emerge for the exchange parties in vertical relationships. Using an ambidextrous strategy does not damage relationship quality, though it certainly does not enhance it. This view is based on the notion that an ambidextrous strategy at least does not harm either common or private benefits. Therefore, exchange parties using the ambidextrous strategy should not experience a relationship that is worse than that which results when they use cooperation or competition alone. The results of the current study indicate that this view reflects reality more accurately. The value of the current study centers on the application of a conceptual framework regarding ambidextrous strategy to vertical channel relationships in a developing economy.