Classroom Companion: Business

8.6 · Competition, Cooperation, and Coopetition

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sourcing takes full advantage of the technological evolution since the work can change 
direction as new technological advances emerge. The best example is the mobile stan-
dards which have been enhanced with new features (e.g., GPRS in GSM and HSPA in 
3G) or become an entirely new standard (e.g., 4G) as soon as the mobile phone had 
achieved enough computational power to support these features.
The participation in these projects is entirely voluntarily, and the amount of work 
each participant contributes to the project varies among the different participants. There 
are also free-riders who do not contribute to the development of the project but imple-
ment and make business on the results of the project.
As the complexity of ICT projects have increased, more and more of the evolution 
of the technology has been achieved through this type of cooperative endeavor.
◄
.
Figure 
8.6
illustrates the concepts of 
competition, cooperation, and coopeti-
tion. The figure shows how a user of a 
chat service can choose between various 
providers at all three business levels 
independently. The user may choose 
among different equipment supporting 
chat services (Apple iPhone, Samsung 
Galaxy, or Google Pixel), select one of 
several ISPs (Telenor, Telia, or TDC), 
and select one out of four chat applica-
tions (Skype, WeChat, WhatsApp, and 
Messenger). Each chat application can 
be used with any combination of user 
equipment and ISP. However, chat appli-
cations are not necessarily compatible—
if a user selects Skype, they cannot chat 
directly with another user using WeChat. 
This is because there is no standard 
among chat applications; therefore, they 
cannot interoperate.
On each business level (ASP, user equip-
ment, and ISP), companies compete to 
attract users. Skype competes with 
WeChat, WhatsApp, and Messenger; 
Telenor competes with Telia and TDC; 
Apple competes with Samsung and 
Google. On the other hand, Skype does 
not compete with Telenor, Telia, or TDC 
since they are at different business layers. 
This is a truth with modifications since 
Telenor is also an ASP offering a chat 
application through its SMS service. 
However, in its role as an ISP, Telenor 
does not compete with Skype.
To provide a complete digital good 
or service, it is necessary for compa-
nies at different business layers to 
cooperate. For instance, cooperation 
between Skype, Telenor, and Apple 
iPhone is required to provide the chat 
service to some users, while Telia, 
Samsung, and WeChat must cooperate 
to provide chat services to other users. 
This is vertical cooperation. These 
companies may have or not have for-
malized cooperation agreements 
between them. In any case, through 
standards, contracts, and agreements, 
they each provide elements of the 
complete digital service.
A Telenor subscriber can communi-
cate with a Telia subscriber, a TDC sub-
scriber, or a subscriber of any other ISP. 
International agreements enforce coop-
eration between ISPs to ensure interop-
erability between operators located in 
different countries and within the same 
country. For the chat service, this implies 
that a customer using an iPhone may be 
a subscriber of Telenor, while the server 
providing the chat service is attached to