The slipstream strategy: How high-status OEMs coopete with platforms to maintain their digital extensions' edge

Abstract

There is a growing trend for high-status original equipment manufacturers (OEMs) such as premium electronics manufacturers and premium carmakers to create and capture value through digital extensions of their products. However, these incumbents face disruptive threats from platforms offering substitutes for these digital extensions. The literature suggests that coopetition—the interplay of cooperation and competition—is a viable strategic response to this threat. However, we have a limited understanding of how high-status OEMs coopete with platforms to maintain their digital extensions' edge over time. We address this gap through a longitudinal case study of InnoCar, a premium European carmaker whose digital extensions—car-specific digital services that enhance the driving experience, such as real-time navigation and infotainment—were challenged by Google and Apple. In response, InnoCar pursued what we call the slipstream strategy, which consists of two phases with varying intensities of cooperation and competition. A high-status OEM first increases its cooperation with platforms at the expense of competition in order to establish shared demand-related complementary assets. Second, it focuses on competing with platforms on the quality of its digital extensions while keeping cooperation to a minimum. We develop a conceptual framework that specifies the slipstream strategy and provide boundary conditions for its application. Our paper contributes to research on coopetition with platforms.