Hervé Dumez

The role of architectural players in coopetition: the case of the US defense industry

In recent years, papers on coopetition have flourished. Some theoretical issues, however, remain unexplored. In the first section of the chapter, we shall present the theoretical issues in a more developed manner. In the second part, we shall give details of our methodological choices. Then, we shall analyze three sequences of coopetition in the studied industry and highlight the theoretical issues in the conclusion.

The Unlikely Encounter between Economics and a Market: the Case of the Cement Industry

Economics emerged as a social science in the 18th century with the theory of markets. Adam Smith and French economists provided demonstration that free markets were ensuring the optimal allocation of resources in the economy. At that time their theoretical work was echoing very pragmatic debates on the organization of markets. In particular, there was the sensitive issue of the corn markets. In 1774, the French economist Turgot, then Controleur General des Finances, liberalised the corn trade in France, breaking away from the mercantile tradition and putting into practice the free market economy principles. At the start, the relationship between economics as a social science and the pragmatic organization of markets seemed selfevident. Economists would provide the practitioners with the appropriate analytical tools to decide upon the suitable market arrangements. But, the dialogue between theory and practice changed. Firstly, the structuration of a scientific field had an impact on the development of economic thinking. Secondly, markets were diverse and complex. At the end of the 19th century, economic knowledge was produced in academic institutions and published in scientific journals. Gaining in autonomy, the discipline became increasingly isolated from the day-to-day work of markets. Besides, businessmen have always emphasized the specificity of their activity which they pictured as hard to reconcile with the reductionist approach of the economists. Either investments are said to be capital intensive with a long life expectancy, or immaterial and enabling entry at low-cost. The product is durable, or it is not. The manufacturing technology is regarded as simple or complex. The various production stages necessitate or not the employment of

The European case

Throughout the course of the 1980s, the European cement industry was confronted with the threat of globalisation. It was in this context that the EC Commission decided to intervene. From April 1989 to July 1990, it began investigating, and requesting information on, the competitive behaviour of European cement producers, and carried out searches at the headquarters of European cement companies and the European cement trade associations. The case was by far the biggest ever initiated by the Commission. Overall, 76 cement companies and trade associations were involved. The markets covered by the case were those of the Member States of the EEC, plus those of three other countries, Norway, Sweden and Switzerland. The legal charges were extremely grave (EEC, 1994).1

The role of bundling in firms' marketing strategies: a synthesis

Bundling and unbundling, i.e., selling by combining a number of products into a package or by separating them, are central elements of corporate strategies. Most existing research papers, in various fields, offer a fragmented analysis of these phenomena. This paper puts these contributions into perspective so as to gain a broader understanding of the advantages of bundling and unbundling in marketing strategy.

How firms (partially) organize their environment: Meta-organizations in the oil and gas industry

In this paper, we investigate how firms collectively organize their environment. Past literature mostly focused on networks and institutions and has overlooked the role of meta-organizations in this process. Based on the case study of the oil and gas industry, we develop an abductive grounded theory model of meta-organizations as collective partial organizations. Our study shows that firms – complete organizations – organize their environment through the setting up of many meta-organizations – partial and thin organizations, which leads to a growing organizational complexity. This complexity results from the organizational creativity of firms when they are confronted to three decision situations. Finally, we highlight the importance of membership in MOs, analyze the various implications of its completeness or incompleteness for legitimacy, and discuss the emergent concept of outreach strategies which we argue to be central for thin organizations.

Local market stabilisation and rivalry

The fact that producers seek to stabilise price and volume competition in local markets does not entail that all means of competition have been removed. Rather, competition focuses on other activities. In such cases, we will refer to the competitive process as one of rivalry rather than competition. Therefore, in what follows, the word competition will primarily refer to situations where producers focus on price and volume in order to gain or defend market share. Rivalry will refer to competition based on other factors, such as customer service, product quality, the preemption of the best production sites, the search for cost advantages over competitors, and improvements in distribution networks.

Strategic responses to globalisation

The effective or potential competitive disruption that producers face in their local markets, due to globalisation, increases their business risk, as there is greater uncertainty over financial returns when making long-term decisions. In order to reintroduce stability into their market place, there are two types of strategic response that local producers can adopt, competitive and institutional.

The globalisation process

The conditions for globalisation have been met, then, but how has the globalisation process developed?

The cement industry as a model Case

The cement industry is often used as a model case in industrial economics textbooks, as it has some key features that make it particularly easy to understand in terms of competition. It is a heavily capital intensive industry which produces a homogenous product, with transportation costs high relative to production costs.

The internal conditions of globalisation

The case-study of the cement industry demonstrates that the globalisation process is not a chance occurrence. National markets have already evolved and matured internally in a way that has prepared the route for globalisation.