These are the summary slides of one of our publications in the Industrial Marketing Management Journal. The paper is on the fascinating phenomenon of co-opetition (=cooperating and competing at the same time) in the context of service networks – in our case retail agglomerations. We evaluate how cooperation and competition between stores effect the performance of an agglomeration and in turn the performance of the stores. The results nicely show why retailers – despite being competitors – should work together in retail agglomerations. ... in other words we encourage “sleeping with the enemy for the greater good”. Hope you find it interesting.

1. Christoph Teller*, Andrew Alexander and Arne Floh
(*, corresponding author, c.teller@surrey.ac.uk)
Department of Marketing and Retail Management
(University of Surrey)
Published in Industrial Marketing Management
(DOI: 10.0.3.248/j.indmarman.2015.07.010)
The Impact of
Competition and Cooperation
on the Performance of
a Retail Agglomeration and its Stores
Presentation of the paper

2. Download the paper from
• Elsevier (incl. a Powerpoint presentation describing the paper),
• the University of Surrey Repository (SRI)
• and ResearchGate)
Reference
Teller, Christoph, Alexander, Andrew, Floh, Arne. 2016. “The Impact of
Competition and Cooperation on the Performance of a Retail
Agglomeration and Its Stores.” Industrial Marketing Management, 52, pp.
6-17. DOI: 10.0.3.248/j.indmarman.2015.07.010.
How to get the paper?

3. Professor Christoph Teller
Chair in Retailing and Marketing
Head of the Department of Marketing and Retail Management
Web: http://www.surrey.ac.uk/sbs/people/christoph_teller/index.htm
Professor Andrew Alexander
Chair in Retail Management
Surrey Business School
Web: http://www.surrey.ac.uk/sbs/people/andrew_alexander/
Dr Arne Floh
Senior Lecturer in Marketing
Surrey Business School
Web: http://www.surrey.ac.uk/sbs/people/arne_floh/
Authors

4. • Competition and cooperation
between stores increase
agglomeration performance.
• There is a positive spill-over
effect between agglomeration
and store performance.
• Cooperation increases store
performance indirectly via
agglomeration performance.
• The spill-over effect nullifies
competition’s negative impact on
store performance.
• Coopetition capabilities of stores
enhance competitiveness of an
agglomeration.
Highlights

5. • Underpinning: Network theory in a service (delivery) context
• Aims:
– (1) Evaluate the effects of competition and cooperation
on the performance of stores in agglomerations,
(2) Assess the implications of competition and
cooperation between stores in an agglomeration for the
managers of the stores, and for those with direct
managerial responsibility for the agglomeration itself
• Contribution to theory and practice:
– Emphasis on the complexity of the competition and
cooperation between stores within an agglomeration,
– Importance of effective co-management of competition
and cooperation by store and agglomeration managers.
Introduction – Aims and contribution

6. • Retail and service agglomerations represent retail and service stores
located in close proximity to each other
• Nodes (i.e. stores) and actors (i.e. store managers), as representations
of retail and service organisations, are embedded in a network of
interconnected formal and informal relationships
• Agglomerations are (geographically bounded) networks (Håkansson &
Ford, 2002) and in the eyes of consumers (horizontal) service delivery
networks (Tax, McCutcheon, & Wilkinson, 2013)
Agglomerations as networks
Store
Store
StoreStore Store
Store
store
Store
Customers
Store
Store
(Retail and Service)
Agglomeration
Inter-firm relationships:
Cooperation and
Competition
Cooperative
purchasing
Cooperative
marketing and
operations
Suppliers
of management,
marketing and
operations
service for
agglomerations

7. • Aim of (inter-organisational) networksis to maximise efficiencies,
synergies and organisational learning by sharing resources
(Chetty and Wilson, 2003) and to increase firm survival rates and the
performance level of individual actors (Wilkinson and Young, 2002).
• Network synergies, (agglomeration or) spill-over effects (Teller and
Schnedlitz, 2012) = positive effect of the network/alliance performance
on organisational productivity (Oum et al., 2004)
• The whole set of service units (stores) contributes to a holistic
customer experience that enhances those service units’
attractiveness to customers. This synergetic effect, drives the
performance of agglomerations, which then spills over onto their
stores (Swaminathan & Moorman, 2009)
• Extend of spill-over effect differs between more and less powerful
stores (e.g., Finn & Louviere, 1996)
H1: The greater the agglomeration performance, the higher is the store
performance.
Conceptual model – “network spill-over effect”

8. • Aim of network cooperations is to acquire resources, reduce
uncertainty, enhance legitimacy and attain collective goals
(Brass et al., 2004)
• Cooperation between the stores in agglomerations (e.g.,
collaborative funding, management of resources, formal and
informal knowledge sharing) is one of the core capabilities of
agglomerations, increasing their performance levels and thus
competitiveness (Lavie, 2006; Teller & Schnedlitz, 2012)
• (Collaborative/central) management, marketing and
promotion enhance attractiveness, performance and
competitiveness (Teller and Elms, 2010; Warnaby et al., 2002,
2005)
H2: The greater the cooperation between stores in an agglomeration, the
higher is the agglomeration performance.
H3: The greater the cooperation between stores in an agglomeration, the
higher is the store performance.
Conceptual model – “network cooperation effect”-

9. • Similar/common resources/capabilites and market commonalities
increase competition within networks (Peng et al., 2012)
• Positive effect of a network of competitors on the financial
performance of organisations (Luo et al., 2007)
• Competition enhances the attractiveness of agglomerations for
customers, and thus their performance (Oppewal and Holyoake, 2004)
• Nevertheless, competition is not beneficial for all stores (Teller &
Schnedlitz, 2012)
H4: The greater the competition between stores in an agglomeration, the
higher is the agglomeration performance.
H5: The greater the competition between stores in an agglomeration, the
lower is the store performance.
Conceptual model – “network competition effect”

10. Conceptual model
Cooperation
(ξ1)
Competition
(ξ2)
Store performance
(η2)
H3 ([+] γ21)
H2 ([+] γ11)
Agglomeration
performance
(η1)
H1 ([+] β21)
H5 ([-] γ22)
H4 ([+] γ12)
NB: This depiction focuses on the key effects proposed in the paper.
Please refer to the paper regarding moderation effects and the inclusion of control variables

11. • Survey: Self-administered questionnaire
• Key informants: Store managers
• Populations of interest: All retail/service stores in three
distinctive inner-city agglomerations
– AGG1, supraregional and dominant high
street with 320 stores (usable questionnaires, n, 170; 53%);
– AGG2, upmarket inner city retail cluster:
160 stores (n, 64; 40%);
– AGG3, second-order high street: 147 stores
(n, 43; 29%);
• Survey process: Store visit, identification of informants, pre-
notification and distribution, after 10 days collection and check
– three waves
Methodology

12. Cooperation
within the network
(agglomeration)
(ξ1)
Competition
within the network
(agglomeration)
(ξ2)
Performance
of the network
(agglomeration)
(η1)
Performance
of the node (store)
(η2)
x14
x13
x12
x11
x24
x23
x22
x21
y13
y12
y11
y23
y22
y21
3
5
5
3
5
5
Vorhies and Morgan, 2005
Bell et al., 2010
Vorhies and Morgan, 2005
Bell et al., 2010
Morgan et al., 2003
Prahinski and Benton,
2004
Factor loadings
λ xn,yn>.7
t-values>1.96
(Hulland, 1999)
Internal Consistency
αξn,ηn>.7
(Nunnally, 1978)
Composite reliability
ρξn,ηn>.7
(Fornell and Larcker, 1981)
Convergent validity
AVEξn,ηn>.5
(Bagozzi and Yi, 1988)
Discriminant validity
FLR<1
(Fornell and Larcker, 1981)
COOPETITION
Outer/measurement model

13. Structural effects Coefficient(p-value, effect size)
H1: Agglomeration performance (η1)Store performance (2) β21 .460***(s)
H2: Cooperation (1) Agglomeration performance (1) γ11 .217***(m)
H3: Cooperation (1)Store performance (2) γ21 .078ns(w)
H4: Competition (2)Agglomeration performance (1) γ12 .231***(m)
H5: Competition (2)Store performance (2) γ22 -.138*(w)
Total effects (direct plus indirect effects) Coefficient
H2: Cooperation (1)  Store performance (2) γ21+γ11*β21
(Mediator, η1)
.178**(m)
H5: Competition (2)  Store performance (2) γ22+γ21*β21
(Mediator, η1)
-.032ns(w)
Notes: *, t-values significant at p<.05 level (**, p<.01; ***, p<.001); t-values calculated by applying a bootstrapping
procedure with 1,000 subsamples (Chin, 1998); (w), weak effect (f2-value ~.02), (m), moderate effect (f2-value ~.15); s,
strong effect (f2-value ~.35); coefficients of determination, 𝑟𝜂
1
2
, .260; 𝑟𝜂
2
,
2
, .207.

14. Results – structural effects (direct)
Cooperation
within the agglomeration
(ξ1)
Competition
within the agglomeration
(ξ2)
Performance
of the store
(η2)
Performance
of the agglomeration
(η1)
Confirm: H1, H2, H4, H5
Reject: H3,
COOPETITION β21, 460***(s)
γ12, .231***(m)
γ11, .217***(m)
γ21, .078ns(w)
γ22, -.138*(w)
Cooperation increases agglomeration performance
directly and store performance indirectly (mediation
through agglomeration performance)
- Competition increases agglomeration performance
directly and store performance indirectly (mediation
through agglomeration performance)
- The negative effect of competition on store
performance is nullified.
The performance spills over to the store performance
!!! Not significant difference between different types of agglomerations and stores!!!

15. • Success (failure) can breed success (failure): Spill-over
effect between agglomeration/network and store/node
performance (confirms: Wilkinson and Young, 2002; Teller and
Schnedlitz, 2012)
• Sleeping with the “frenemy” …: Coopetiton increases
agglomeration/network performance (confirms: Peng et al.,
2012) and thus
– Competition (confirms: Luo et al., 2007; Oppewal and
Holyoake, 2004) and
– Cooperation (confirms: Swaminathan and Moorman,
2009; Brass et al., 2004; Teller and Elms, 2010)
simultaneously.
• …for the greater good …: Coopetition does not translate into
store/node performance DIRECTLY but is mediated by network
performance (confirms: Peng et al., 2012; partly disconfirms:
Oum et al., 2004)
Theoretical implications

16. • Shared fate of stores within agglomerations
• Call for more collaboration (management, marketing,
promotion, infrastructural services etc.), rationale for investment
• The bright side, for stores, of competition in agglomerations
• Coopetition – a promising mind-set in /strategy for evolved
agglomerations (borderless networks)
Practical implications

17. • Replication in other settings: agglomeration formats, locational
alliances, countries
• Extension of the model
– Antecedents of cooperation and competition
(coopetition)
– Antecedents of agglomeration/store performance
• Test of causality of spill-over effects
Outlook

18. Questions, observations, comments
… c.teller@surrey.ac.uk
Reference: Teller, Christoph, Alexander, Andrew, Floh, Arne. 2016.
The Impact of Competition and Cooperation on the Performance of a Retail Agglomeration and Its Stores.
Industrial Marketing Management, 52, pp. 6-17. DOI: 10.0.3.248/j.indmarman.2015.07.010.