Coopetition, is a buzzword cropping up in many business publications these days. Basically, it means that competing firms look for ways to cooperate with each other, rather than compete head-to-head for business. Working in conjunction with the U.S. Postal Service, the United Parcel Service (UPS) now has a program that allows customers of participating retailers to return merchandise by dropping it in any U.S. Postal Service mailbox, or at any post office. The program features a special label that makes the service possible. After a return package is dropped off at a Postal Service location, a UPS driver picks it up and the UPS ground network transports it back to the retailer. UPS, which has its main air hub in Louisville, KY, began testing the service last year with a few retailers and is expanding it because of “positive response.” Some say this is an example of successful coopetition.
There are a number of other current partnership programs with competitors. The Postal Service acts as a “last mile” partner for both UPS and FedEx, handling thousands of deliveries. Federal Express performs similar duties for the Postal Service providing air service for Postal Service parcels domestically as well as providing international logistics for the Postal Service’s Global Express Guaranteed service. In certain conditions, coopetition can be a “win-win-win”; helping not only the two businesses, but also the consumer.
Do you think these partnerships benefit the public through greater efficiencies or hurt the competitive level? Let us know what you think!
This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).