Unintentional coopetition in the service industries: The case of Pyhä-Luosto tourism destination in the Finnish Lapland

European Management Journal (2011) 29, 193–205

journal homepage: www.elsevier .com/ locate /emj

Unintentional coopetition in the service industries:The case of Pyha-Luosto tourism destination in theFinnish Lapland

Mika Kylanen *, Rauno Rusko

University of Lapland, Department of Tourism and Business, P.O. Box 122, FI-96101 Rovaniemi, Finland

02do

*

KEYWORDSCoopetition;Coopetition network;Service industries;Tourism destination;Socio-cultural dynamics;Public–private partner-ship;Management practices;Lapland

63-2373/$ - see front mattei:10.1016/j.emj.2010.10.00

Corresponding author. TelE-mail address: mkylanen@

r ª 2016

.: +358 4ulaplan

Summary The rise of the service industries has changed operational business environ-ments and mixed the roles and blurred the boundaries of private and public sectors. Whilecooperation has become more evident and more diverse, also simultaneous cooperationand competition between different firms and the firm and the public sector, namely coo-petition, is gaining an increasing importance. We consider intentional and unintentionalcoopetition between firms and the public sector within the service industries by usingPyha-Luosto tourism destination in Lapland, Finland, as a context of analysis. The analysisstresses, first, the challenging tension between cooperation, competition and coopetitionin a tourism destination, and secondly, both strategically planned and unintended, moreinstinctive coopetition. In particular, the case illustrates interplay between public and pri-vate sectors, the relationship between strategic and operational levels of developmentwork, and emphasises the role of the surrounding region in development.ª 2010 Elsevier Ltd. All rights reserved.

Introduction

In the field of management studies, competition has been adominant paradigm throughout the 20th century legitimisingmany strategic managerial and marketing activities incurrent business life. During the recent decades, also acooperative approach has been introduced. For instance,creation of strategic alliances, networks and clusters havechanged, and keep changing, the dominant economic land-scape (see e.g. Fyall & Garrod, 2005; Jorde & Teece, 1990;

0 Elsevier Ltd. All rights reserved.

0 8446 577.d.fi (M. Kylanen).

Nielsen, 1987). However, we wish to underline with manyother scholars (e.g. Lado, Boyd, & Hanlon, 1997; Van Laere& Heene, 2003), that the simultaneousness of these twoparadigms is not ruled out, either. There are many view-points considering a co-existence of competition and coop-eration in business life. For instance, co-evolution (e.g.Lamberg & Laurila, 2005; Zettinig & Benson-Rea, 2008),service co-creation (e.g. Ordanini & Pasini, 2008), industrialdistricts (e.g. Staber, 1998), network innovation (e.g.Oliver, 2004), and coopetition (e.g. Brandenburger &Nalebuff, 1996; Luo, 2004) have been suggested as suitableframeworks to consider the interplay between cooperation

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194 M. Kylanen, R. Rusko

and competition. However, only one of these concepts,namely coopetition, particularly focuses on the simulta-neous combination of cooperation and competition.Although the concept of coopetition has been used in thespecific meaning already in the 1910s (Cherington, 1913,p. 144), it primarily dates back to the 1980s, taken by aUS business man Raymond Noorda in the context of thetechnology industry (Luo, 2007).

In this study, coopetition is simply defined to be simulta-neous cooperation and competition between firms (Luo,2007) regardless in what part of the value chain, supplychain or supply network these two will emerge (cf. Bengts-son & Kock, 2000). Duality of cooperation and competitionmay take many forms and types. It can take place betweenmultinational companies on the level of global and localmarkets, as competitors may first cooperate in a countryto improve the general readiness of production (e.g. in Chi-na) and then they may compete for market shares in thatsame country (Luo, 2004) or on a global level. Additionally,the duality may occur along within a supply chain, typicallycooperation in the upstream parts of the chain and compe-tition in the downstream parts of the chain (see e.g. Walley,2007).

From another perspective, companies may compete (orcooperate) horizontally (between substitutive products),but cooperate (or compete) on a vertical level (betweencomplementary products), and then again compete (orcooperate) diagonally between different industries andinterest blocks (see e.g. Michael, 2007a). How it is possibleto combine cooperation and competition within the samerelationship? This is a challenging issue; in particular, froma management perspective, and thus a well-grounded re-search subject (see e.g. Bengtsson & Kock, 2000).

Generally speaking, coopetition is dyadic, if there areonly two firms involved in the relationship (e.g. Bengtsson& Kock, 2000) or multi-faceted if there are also other par-ticipants involved, such as customers, public organisations,suppliers or other stakeholders involved in the coopetitionnetwork or ‘‘value net’’ (see e.g. Brandenburger & Nale-buff, 1996; Luo, 2004; Walley, 2007). We emphasise the roleof public and semi-public authorities in the emergence ofcoopetition, both in the form of intentional and uninten-tional coopetition.

Namely, in the tradition of strategic management re-search coopetition has been referred to as an explicit, ra-tional strategic choice. However, recently the complexityof the concept and the practice of coopetition have beenbrought to the fore. Indeed, coopetition does not only occuron the basis of intentional and strictly pre-planned decision-making but may take unintentional, and therefore alsorather tacit, implicit forms (e.g. Mariani,2007, 2009; Rusko,2008; Walley, 2007).

By intentional coopetition we refer to a balance betweencooperation and competition that is a result of conscious,strategic planning based on rational thinking. In contrast,we discuss a parallel concept of unintentional coopetition.It refers to a relationship between cooperation and compe-tition where inter-organisational processes are approachedas more contingent, constantly evolving and emergent(see also Mariani, 2007, 2009). Instead of rational thinking,expressed words and deliberate strategies, it may primarilyrise from impulse, and stem from spontaneous and instinc-

tive acts. Hence, under the concept of coopetition bothintentional and unintentional cooperation between compet-ing firms, or vice versa, intentional or unintentional compe-tition between cooperating firms can be identified. This iswhy we have taken the task to further fill in this significantgap, and to study coopetitive ways of organising businessprocesses.

The business life in general, and in Europe, in particular,has faced at least two remarkable contemporary structuralchanges that deal with organising business activities, publicdevelopment work, and interrelationships of organisations.First, the relationship between private and public sectorhas become unstable as the boundaries seem to haveblurred when considering the responsibilities and businessactivities (see e.g. Pongsiri, 2002; Wettenhall, 2004). Forexample, Luo (2004), Lamberg and Laurila (2005), Lambergand Ojala (2005), and Mariani (2007, 2009) have noticed thatcooperation between enterprises and local government is anessential part of long-run business actions and develop-ment. The increasing role of government as an active partic-ipant of business actions has made the management ofbusiness entities more complex.

Secondly, there are strong international changes in thedistribution of work between services and manufacturingof goods. Europe, the US and Japan are losing their leadingroles in the branches of manufacturing and technology be-cause of the long-term economic rise in the Far East andthe Eastern Europe. In fact, nowadays the importance ofservices in total trade in 2004 was higher in EU25 than inthe rest of the world (see Laurent, 2006). Also, an increas-ing role of public services as a relevant part of the businessprocesses will increase the relative importance of servicesin the future.

Thus, it is essential to study and understand business andinter-organisational logic of services, particularly in theEuropean context. For this reason, we concentrate in ourcase analysis in services by discussing a branch of tourism,and tourism destinations, because it involves complex net-works, in which the several publicly-managed geographicallevels are important. In a location-based tourism business,production and consumption take place on several intercon-nected levels simultaneously; an international level, anational level, a provincial level, a regional level, a munici-pal level and a local level, but at the same time on levels of atourism enterprise, an individual worker, and on the level ofcustomer encounters. Furthermore, we study here businessand coopetition practices and processes in value co-crea-tion, and wish to identify somemanagement practices withinthe new service-dominant logic (cf. Ordanini & Pasini, 2008;Vargo & Lusch, 2004; Vargo, Maglio, & Akaka, 2008). The S–Dlogic emphasises the role of the customer as a co-creatorwho takes an active role in the service process, comparedto the more traditional marketing and management contextof the goods-dominant logic (Vargo & Lusch, 2004).

Tourism goes as a fertile example of services in whichinteraction between public and private sectors is important.In order to study these structural changes and their emer-gence in business processes and practices, we will considerin the paper a case study of Pyha-Luosto tourism destina-tion, situated in central Lapland, Finland. In addition tointerplay between public and private sectors, the caseemphasises the role of the surrounding region in develop-

Unintentional coopetition in the service industries: The case of Pyha-Luosto tourism 195

ment, and identifies tensions between cooperation andcompetition within a tourism destination, and betweentwo tourism resorts.

The way, in which coopetition processes between enter-prises, semi-public development organisations and publicsector have been organised in Pyha-Luosto, reveals impor-tant relationship structures and dynamics of contemporaryservice branches. Thus, Pyha-Luosto tourism destinationprovides a good case to understand organising of businessprocesses in a complex operational environment. By com-bining this multi-level environment with the coopetition dis-cussion and framework, emphasising both intentional andunintentional forms of coopetition, we provide new contri-butions into the debate of organised and emerging coopeti-tion processes.

An existing coopetition network around and in the dual-istic Pyha-Luosto provides multidimensional viewpoints: inour case the coopetition network is not only a matter ofcooperation between competing enterprises, but also otherparticipants and interest groups such as public and semi-public organisations in this specific geographic area (cf.Gnyawali, He, & Madhavan, 2006). Multidimensional coope-tition network of Pyha-Luosto provides a myriad of opportu-nities for situations where intentional cooperation willfinally transform into competition or intentional competi-tion will change into cooperation while creating opportuni-ties for unintentional coopetition.

Next, we will introduce some angles of the existing coo-petition debate and present some new viewpoints aboutcoopetition in the context of tourism. Particularly, uninten-tional coopetition takes many interesting forms in tourism.After the second section, we consider in more detail themethodology and case data. Then different nuanced formsof intentional and unintentional coopetition in the case ofPyha-Luosto tourism destination are presented. A newframework to organise intentional and unintentional coope-tition activities is introduced based on the findings of thecase study. In the final part the findings are then reflectedboth on the theoretical discussion and on the businesspractices.

Coopetition and tourism

Despite the fact that coopetition, the simultaneity of com-petition and cooperation between companies, is present ineveryday business actions, its importance is still marginalin organisation and management studies (Dagnino, 2007).The concept of coopetition has been used in differentbranches and cases, for example in the context of operahouses (Mariani, 2007), insurance companies (Okura,2007), soft drinks (Bonel & Rocco, 2007), automobiles (Bran-des, Brege, Brehmer, & Lilliecreutz, 2007), knowledge shar-ing and innovations in R&D work (Gnyawali et al., 2006;Soekijad & Andriessen, 2003), military forces (Depeyre &Dumez, 2008), steel industry (Gnyawali et al., 2006) andpersonal networking (Michailova & Worm, 2003), but also,to a limited extent, in tourism (Michael, 2007a; von Friend-richs Grangsjo, 2003).

There are numerous ways to define and approach coope-tition. For Bengtsson and Kock (2003) ‘‘a co-opetitive dyadicrelationship is established, for example, when two compet-

itors cooperate with each other in a strategic alliance forproduct development and at the same time compete witheach other in the marketing of the products’’. In otherwords, they consider coopetition in the context of a supplychain. Cooperation is in the upstream parts of the supplychain and competition is in the downstream parts of thesupply chain (cf. Walley, 2007). Luo (2004) defines thatthe aim of coopetition is ‘‘to create a bigger business piewhile competing to divide it up’’. Lado et al. (1997) havedescribed the coexistence of cooperation and competitionas a syncretic balance with high complexity, and evenparadoxical.

Coopetition has been also defined as multi-faceted rela-tionships in a value-net of customers, suppliers, complemen-tors and competitors (Brandenburger & Nalebuff, 1996).Furthermore, complex coopetition networks (Gnyawaliet al., 2006), and both dyadic and multiple network coopeti-tion (Dagnino & Padula, 2002) have been suggested as suit-able frameworks in studying coopetition.

In spite of the relative newness of the concept, freshviewpoints have not been opened up in the academic de-bate. However, an exception is an article by Walley (2007)who considers tacit coopetition in the context of consumers.Consumers take cooperative or coopetitive actions throughmemberships in consumer organisations or in orderly fashionactions, for instance, in auctions or in shops in the forms ofquiet queuing. However, the consumers compete with theirfellow-consumers during season sales. The competitive andcooperative actions of consumers are rather tacit (or unin-tentional) than intentional. Usually, visible and measurablecoopetition, where the companies are intentionally cooper-ating and competing with each other, has played a majorrole in the discussion. In addition to Walley (2007), also Mari-ani (2007) and Soubeyran and Weber (2002) have suggestedmore tacit forms of coopetition as the new ground of analysis(cf. Bengtsson & Kock, 2003). In total, these stress the indef-inite interface between cooperation and competition (seealso Maret, 2003; Okura, 2007; Rusko, 2008).

However, a general framework to understand coopeti-tion is still underdeveloped (Dagnino, 2007), and we suggestsome new viewpoints for further analysis. Although theimportance of the public sector for coopetition has been no-ticed (e.g. Brandenburger & Nalebuff, 1996; Luo, 2004), itsparticular role as an originator or as a source for uninten-tional or tacit coopetition has to a great extent been omit-ted. However, the case introduced by Mariani (2007, 2009)shows reflections on the significance of public or semi-pub-lic organisations for emergent coopetition strategies. Ouranalysis emphasises not only the importance of geographicproximity, co-location and micro-clusters (see Michael,2007b) as the sources for unintentional coopetition (seee.g. Rusko, 2008) but also the role of public and semi-publicorganisations as the source for unintentional coopetition.

Moreover, in the mainstream management literaturecoopetition has been presented as a strategic and techni-cal-instrumental choice grounded on the manager�s rationaldecision-making. However, coopetition is rarely as straight-forward and as easy as illustrated in the studies, to date.Coopetition is drawn from a very different perspective whenit is understood as an ongoing process and practice of mean-ing co-production (see e.g. von Friendrichs Grangsjo, 2003)within a complex coopetitive network. In the case of tour-


ism destinations, public or semi-public organisations, co-location and unintentional coopetition are all involved inthe consideration. It is often the co-location of differentprivate, public and semi-public coopetitive actors that turnscompetitive strategies into unintentional cooperation, and,vice versa, evokes unintentional competition is cooperativestrategies.

Co-location in tourism destinations refers to spatial con-centration of private and public actors, geographical char-acteristics and landscape, infrastructure and facilities inthe tourism destination. Moreover, customers, service pro-viders and local inhabitants, all, attach to a certain place,which is created and experienced holistically. That is, tour-ism destination is a location-based market (see e.g.Michael, 2007b). The multiple networks of actors exist inproximity to each other forming mutual service chains, ser-vice networks and interactions.

Our analysis resembles the analysis of Lado et al. (1997),that is, the interplay between low or high competitive ori-entation and low or high cooperative orientation in theirsyncretic model of rent-seeking strategic behaviour. How-ever, in addition to these dimensions, we have consideredalso another dimension, intentional–unintentional view-point in the case analysis based on coopetition networks(cf. Gnyawali et al., 2006).

Figure 1 The Pyha-Luosto tourism destination with the surroundinFinnish Lapland.

Case data and methodology

Presentation of the case

Our analysis is based on a case study over one of the mostimportant tourism destinations in the Finnish Lapland,Pyha-Luosto. Other important fell-based tourism destina-tions in the northernmost province of Finland are Levi, Yllasand Saariselka. All of these destinations have some commoncharacteristics: they are mainly winter sport centres withdownhill skiing possibilities and extensive cross-country ski-ing facilities, but they, also, have recently tried to strength-en their year-round tourism, in particular, by investing onthe snowless period like summer time. A ski lift, a hoteland a slope are most commonly the first facilities which willstart the development of these sites, and nowadays thereare several services and experiential tourism products avail-able. Also, the most successful tourism destinations are usu-ally located nearby transportation routes, such as the mainroads, railroads and airports.

Pyha-Luosto, situated in the middle of Lapland (seeFigure 1), however, differs from these others in many sig-nificant ways. To be specific, it consists of two tourism re-sorts with a distance of about 20 km from each other. Thetourism destination is situated in three municipalities (the

g municipalities and other important tourism destinations in the


Municipalities of Sodankyla and Pelkosenniemi and the Cityof Kemijarvi). Traditionally, Fell Pyha on the border of theMunicipality of Pelkosenniemi and the City of Kemijarvihas been known for its domestic alpine skiing tourists,whereas Fell Luosto has attracted more international tour-ists interested in Lappish activity programmes and exoticthemes. At the beginning of the 2000s these two wellself-supporting resorts have launched their cooperativestance and concrete joint marketing where these two com-paratively well-known resorts are represented as a biggerwhole. In particular, they have joined their forces in tour-ism marketing, planning and product development. Nowa-days, the notion of Pyha-Luosto can be found in severalcontexts, and the destination is being developed as oneof the key sites in the regional tourism strategies (RegionalCouncil of Lapland, 2003, 2007). The new, compoundname is also used in the Pyha-Luosto National Park re-established in 2005, as being formerly connected only toFell Pyha.

The two resorts gather several different attractions suchas: the only operative amethyst mine in Europe, a reindeerfarm, a reindeer and husky park, a horse farm, in total sev-enteen slopes, spa facilities, multiple routes for trekking,skiing and other outdoor activities, many activity pro-gramme service companies, many hotels owned either lo-cally or by an international hotel chain, small shops,rental agencies for skiing equipments, etc., and recognis-able events to mention but a few. Regardless of its plentyofferings, Pyha-Luosto is ranked among the middle-of-the-road destinations in Finland. In addition to a unique settingof two competing resorts forming a unified tourism destina-tion to be jointly marketed, Pyha-Luosto embodies multi-plied cooperation. Cooperation takes place, for instance,between the three municipalities; between companies ingeneral; between attractions; between accommodationand activity programme services; between hotels; betweenactivity programme service companies; between the na-tional park and the tourism business; and between theindustry and local communities (see Kylanen, 2005). The sit-uation is interesting also because the coopetitive actorsrepresent both public and private sectors (cf. Brandenburg-er & Nalebuff, 1996; Luo, 2004).

Methodology

The case study is based on qualitative data, particularly eth-nographic methodology. Coopetition within the Pyha-Luostotourism destination is, hence, studied as an act of sense-making with a focus on how people interact and cooper-ate/compete in their daily life (see Nason, 1998, p. 241).Ethnography has proved its usefulness, particularly, instudying socially organised groups and surroundings withspecific work practices, values and relationships (e.g. Ham-mersley & Atkinson, 1995; Suchman, 1995).

Ethnographic methodologies help to identify meanings,concrete processes and a challenging saying/doing gap intheir naturally occurring settings. For the study of coopeti-tion it makes visible, not only the actual activities taken,decisions made and ways of thinking, but also the overallcoopetitive culture. Therefore, we have found it valuableto do on-site observation, both participatory and non-par-

ticipant, in parallel to conducted interviews and availabletext-based data. The aim of ethnographic field work is toproduce a thick description of culture of a specific commu-nity (or a web of communities) on the basis of multiple data(see e.g. Hammersley & Atkinson, 1995).

Our ethnographic data is, thus, three-folded (see Appen-dix 1 for more detailed information):

(1) Thematic, conversational interviews of tourismentrepreneurs;

(2) participant observation; and(3) document data.

In the study we have participated both overtly and cov-ertly in people�s daily lives. In particular, we have watchedwhat happens, listened to what has been said, asked ques-tions, and read written materials. We have then analysedthe versatile data with content analysis and close readingon the basis of our framework. Particularly, we have beeninformed by the theoretical discussions read but the findingsstem primarily from the data gathered (see Hammersley &Atkinson, 1995).

Unintentional coopetition in a tourismdestination: the case of Pyha-Luosto

From competitors to coopetitors

Traditionally, the Pyha ski resort developed around the FellPyha and Luosto ski resort surrounding the Fell Luosto in themiddle of the Finnish Lapland have been considered as sep-arate tourism sites that compete against each other. How-ever, recently they have joined forces to create a moresignificant tourism destination, and hence, to boost theirsuccess as an internationally attractive tourism destinationconsisting of two separate resorts. The tourism destinationand its surrounding area have for decades and centuriesbeen in the interests of several actors, and it has facedmany kinds of internal and external pressures and chal-lenges from Sami people vs. Finnish inhabitants to forestryvs. tourism interests. The enforcement of cooperative atti-tude and action between these two resorts has been on thelocal agenda already from the 1980s in a business sense, buteven before this area has been under integration for naturepreservation interests.

Cooperation between Pyha and Luosto has been built upand declared through three sequential projects starting al-ready in the turn of the 1990s. The first project was aboutbuilding a road between the two resorts. In the second pro-ject the main purpose was to ensure transportation possibil-ities, namely a ski-bus transportation, from the connectingairport (Rovaniemi) to the destination area. In the projectimplemented in 1997–1999, the idea of working togetherfor mutual interests grew also among the entrepreneurs. In-deed, it has been the visionary municipal officers who havestarted the ball rolling. Officially speaking the cooperationof Pyha and Luosto has begun in the third project in 2001when three interconnected, influential events happened.The history and some possible future developments of thedestination are colourfully described by an entrepreneurworking in the area:

Figure 2 Lively interfaces of Pyha-Luosto tourismdestination.


(1) ‘‘Well, it (cooperation) has certainly become betterand better, it has been developed for, say, 20 years. Thefirst project was to build a road between the two sites!Then we have proceeded day by day, bit by bit. The nextbig effort was when we got a bus operating on the road,that is, the ski-bus transportation was formed. The thirdbig project was to make a strategy for the tourism des-tination. It was, indeed, a very concrete, contents-baseddeclaration about what we want to be, where we wantto go. Well, now we are talking about a unified areamarketing-wise. And the national park will eventuallyweld the parts together. People, say, in 5 years time willperceive this, specifically, as the Pyha-Luosto.’’ Inter-viewee #5

The first one of the three events was a natural continua-tion to the work done within the three municipalities. Landuse and zone planning have been important features and fac-tors in the process, and they are still going on in a uniquethree-party way. In 2001 an international ski resort and tour-ism destination planning consultant was given a job to pre-pare a Master Plan for the area. The planning work wascompleted in 2004, and now the construction work has al-ready to some extent started. The planning has become evenbroader when new areas have been connected. In 2002–2003a strategy was made to declare a joint voice and targetedgoals for the new tourism destination. In the strategy, thetwo resorts were considered as complementary, althoughthey can also be seen as self-sufficient with moderateamount of hotels, activity services and other facilities. Onlysome key companies were involved in the actual strategy(writing) process along with the three municipalities, whichwas criticized by small-business entrepreneurs, but therewere several public hearings arranged to receive relevantfeedback from the area from both the business and publicside.

As the third and operationally most concrete action, atourism destination got its own administrative structure in2003. A Destination Management Organisation (DMO, alsoreferred to as destination marketing organisation referringto its key function; an unofficial name Pyha-Luosto ResortAssociation) was established, and the actual operationsbased on the new strategic definitions and policies werelaunched. It is possible to consider Pyha-Luosto DMO as asemi-public development organisation because of greatimportance of public sector, e.g. in the forms of municipal-ities and the national park. The Pyha-Luosto DMO has smallemployee resources with only two full-timers, but theadministration and planning is built on the Board with achairman and 7–9 members with personal deputy memberselected for 2 years at a time. The Board receives initiativesby five working groups that have separate thematic respon-sibilities: marketing, internationalization, fairs and events,product development and sales, and quality improvement.About 90–95% of the local companies and also the threemunicipalities are members in the DMO. All members payto a joint pool on the basis of an agreed percentage depend-ing on their sub-sector.

The existence of a DMO brings in a one more level of hier-archy which is effecting on the strategic planning, imple-mentation and contents of the destination products. Anew combination of two tourism destinations increases also

the possible intentional or unintentional coopetitive con-nections between firms and other service providers, or be-tween individual workers. By using the concepts typicalfor supply chain literature it is possible to notice that inaddition to vertical directions of cooperation, for the exis-tence of a DMO, also horizontal or diagonal cross-bordercooperation between the two destinations is possible. Inter-play of upstream and downstream activities takes place on alively interface where production and consumption, strate-gic planning, product development and marketing occurmore or less simultaneously, and it is hard to define whereplanning ends and implementation starts, for instance.

This is covered in the Figure 2 where diverse interfaces,layers and levels of a tourism destination are presented. Inaddition to everyday strategic-operational environment oftourism development, this makes visible the vertical, hori-zontal and diagonal coopetition within the complex serviceindustries. This socio-cultural approach to tourism destina-tions opens up fruitful avenues to coopetition debate (seeSaraniemi & Kylanen, 2010). In particular, it goes beyondeconomic-managerial viewpoint, and gives room for morein-depth analysis with the interplay of material, social,and symbolic values and meanings (see Saraniemi & Kyla-nen, 2010). In the Figure 2, the overall setting for coopeti-tive relationships appears as an on-going process that takesdistinct discursive forms and practices across various spatialand temporal contexts (see Moisander & Valtonen, 2006). Itis notable here that operational level (e.g. get-togethersand meetings, more or less mundane decisions on marketingcampaigns, website updates and weekly or monthly commu-nications) seems like a daily routine whereas more demand-ing strategic decisions stay in the back. This is due to itslonger time-scale. Although strategic guidelines are firmlypresent in everyday debates in meetings, strategic planningis not of high priority. Furthermore, the relationship be-tween public, semi-public and private actors can be de-scribed more or less seamless in tourism development,although also inter-actor tensions are evident in the inter-faces (see also Hall, 1999; cf. Wettenhall, 2004).

The importance of the public sector in the Pyha-Luostodestination also increases the dimensions of cooperationand competition and multi-faceted character of coopeti-


tion. Public organisations have effects on the actions and onthe impacts of these actions, and moreover, they relate toall actors (cf. Brandenburger & Nalebuff, 1996). WhereasBengtsson and Kock (2003) give an example of cooperativeproduct development vs. competitive marketing, coopeti-tion in Pyha-Luosto is basically joint marketing of the desti-nation as a holistic tourism product, pooling of resources,etc. It is interesting that coopetition has not been chosenas an intentional strategy for the tourism destination butcompetition between co-located companies has been re-placed by cooperation (no matter what) in the strategicplan. However, coopetition has evolved over time as theform of action, but its management and balance is an appar-ent challenge.

A more recent development in the destination (alongwith many other tourism destinations, at least in Finland)has been a strategic intention, first, to cooperate to getthe tourists into our destination (instead of many other des-tinations; marketing activities) but, secondly (and rightafter the first), to start competing as soon as the tourist ar-rives to the destination (business activities and customerencounters). Interestingly enough, representatives of bothprivate companies and public organisations share an ideaof a fictitious gate through which the customers enter thearea. And whenever they are ‘‘in’’ the companies and pub-lic organisations begin their fierce rivalry although havingjust cooperated a while ago. Instead of cold-blooded strate-gic and technical-rational business abilities this seems tocall for schizophrenia!

Synergy in coopetition

Among the entrepreneurs it is widely acknowledged thatcooperation between the two complementary resorts hasproduced notable synergies, but also competition is consid-ered valuable. Synergy is gained in three categories: (1)competencies, (2) marketing, and (3) strategic regionaldevelopment.

When working together the two competing resorts andmultiple companies and other organisations are able toadopt both Pyha�s and Luosto�s core competencies thatmay lead to mutual learning. Benefits in marketing andofferings appear economically, as the two resorts pool re-sources and gain a stronger effect although investing less,and functionally when, for instance, the activity programmeservice companies can use the same routes, facilities andeven equipment, although they are more or less inter-changeable. Working together, also, attracts more potentialcustomer groups, as the offerings become more versatile. InPyha-Luosto it is possible to talk about flexible synergy;during the high-season cooperation increases resourcesbut in low-season synergy appears as rationalized solutions,such as taking turns in opening hours between restaurants.Synergy is, also, gained in terms of strategic regional devel-opment and planning. When together, Pyha and Luosto, rep-resent a bigger entirety with a higher status, and thus, aremore powerful in terms of public funding for regional andtourism development.

The Pyha-Luosto National Park covers the whole tourismdestination and even a larger area. For functional and busi-ness reasons a circular zone development and preservation

policy has been chosen, which gives room to recreationand tourism services, nature-based trekking, and morestrictly outlined use, along with nature preservation inter-ests within the park. The national park is considered as animportant attraction among everybody working, living orvisiting in the region. Sometimes both in the DMO Boardmeetings and in more informal circumstances the tourismindustry and the Finnish Forest and Park Service (Metsahall-itus), a state enterprise responsible for administering thestate-owned land and water areas, disagree in the develop-ment premises of Pyha-Luosto. Another festering issuestems from the fact that Metsahallitus also to some extentruns nature-based business activities, and small local activ-ity programme service companies do not find that appropri-ate for a public organisation.

In the cooperation of Pyha and Luosto issue-based chal-lenges are much smaller than those of value-based (see Ara-ujo & Brito, 1998). Although some significant restructures,such as the DMO, have been put together, historically thetwo resorts have, so to speak, lived their own lives heedlessof each other, and this has produced severe differences andgaps between Pyha and Luosto that are present even today.In Pyha resort there has been a forceful tradition of a flag-ship company which has not only been the most importantinvestor but also a leader-in-charge when it comes to resortlevel decision-making. Also, a co-ownership between Pyhahotel activities and skiing slopes and another tourism desti-nation in the northern Finland has created its own possibil-ities and restrictions. On the contrary, in Luosto resortthere have traditionally been more small companies withhigh mutual trust and empowering, participative decision-making. These historical and contextual differences in tra-ditions of ways-of-working and ways-of-living between thetwo resorts turn(ing) one, have still remained among thekey players of the destination. This indicates and yieldscompetitive atmosphere. The following extracts from theinterviews shed light to everyday life of coopetition inPyha-Luosto.

(2) ’’I consider the strategy and its key principles good.But the action, then, it should follow them too: to takethe goals and to rev up towards them gnashingly with afour-wheel drive! – Well, this process is still on the go,searching its lines – we are not there yet. After all, weare talking about two resorts of a very different stylehere, I mean structurally speaking. In the fell Pyha thereis one actor in charge bossing around, whereas here [inLuosto] we have about twenty, or so, active firms amongwhich we try to find a shared view and a common way-of-action. Back there [in Pyha] I would say a single com-pany tells others what to do and they�ll follow, but nev-ertheless, it has always been that way – and it has beenquite all right [in success-wise]. Now when we are tryingto get these two together. . .well, I believe we�re havingsome �labour pains�.’’ Interviewee #6(3) ’’Well, of course as a Luosto-based entrepreneur,one has to approach these issues from Luosto�s view-point, too. Obviously it sure is an organisation [theDMO] common to all of us, and we do try to developthe cooperation and gain some good results with it –but we mustn�t forget where we come from and whyare we here for.’’ Interviewee #6


Challenges of unintentional coopetition

In the case of Pyha-Luosto, Oliver�s (2004) claim that coop-eration may count against, and respectively, competitionmay prove beneficiary, becomes evident. In the tourismdestination the companies along with other important ac-tors have realized the value of putting the customer andthe region ahead of the single companies in managing thetension between cooperation and competition (Referenceerased due to anonymity). The biggest attitudinal, andhence, eventually also an action-based challenge is the res-ortalism (cf. regionalism) that some key entrepreneurs feeltowards their home-base resort (Reference erased due toanonymity). The actors, thus, take their representative net-work positions and do their (net)work in the constant con-text of their place, status and background. The futurechallenges culminate in turning a fell-based identity into adestination-based identity, and hence, creation of destina-tion cultures. On a more practical level, in terms of productdevelopment, this calls for an extended tourism productthat connects the distinct, single tourism services into a so-lid destination product. According to the interviews, coop-eration or competition occurs in the context of place,space and time (see also Schoenberger, 1997). When thegeneral strategy is based on cooperation or competition,the individual actors will sometimes implement, vice versa,competitive or cooperative action in the operational level.

(4) ’’I do think it [competition] keeps you awake, alertand fresh. It makes you brush up your products, indeed.I will have to keep my products in good shape so theywill bear comparison with the others in the region. Isurely cannot strive for anything else than to have thebest product in the whole region. I mean, this is theway it has to be, doesn�t it?’’ Interviewee #4(5) ’’I don�t think them [other entrepreneurs, forinstance] as my competitors – quite the opposite – theymake us complete. They may use our stuff, we usetheirs, and we buy some subcontracting from them.So, for instance, I have left a part of our products awayjust simply because they�ve done a better job in produc-tizing them, and have all the elements for them.’’ Inter-viewee #8(6) ‘‘And the association is supposed to confirm theattractiveness of the entire region, yeah, on the battle-field, and to be specific, cooperate with other regions aswell when it comes to hitting the international tourismmarkets. But in the domestic tourism markets these des-tinations compete quite heavily against each other viathese DMOs, and in international marketing we worktogether. When getting back on the destination level,here we compete, each and every one of us, althoughwe cooperate within the association-based network.Thus, we are talking about an interesting structurehere, to say the least.’’ Interviewee #10(7) ‘‘But hey, you can�t have tourism industry withoutcooperation! In that sense, we have both cooperationand competition at the same time, simultaneously.’’Interviewee #10

In the strategic level the firms will follow a certain typeof strategy with each other: they are cooperating, compet-ing or they are acting in a coopetitive way. In the scientific

sense, it is possible to speak about paradigms: competitionparadigm or cooperation paradigm (Padula & Dagnino, 2007)– or perhaps even about coopetition paradigm, if the firmscooperate in some of their actions and compete in otherparts of their actions, in which the firms are following. Tobalance with them is, however, challenging and it demandsconstant ‘‘identity re-formulation’’ from the people in-volved. This also makes visible the unintentional, instinctivecoopetition, and the struggles between strategic and oper-ational development work.

The contributions of Pyha-Luosto case analysis tocoopetition debate

On a strategic level, the planning horizon is longer than onthe operational level, and furthermore, in the case ofremarkable development work, such as development of atourism destination, the actors differ on different levels.On the strategic level of development work of tourism des-tination, planning, zoning and remarkable investment deci-sions of the actors of provinces, municipalities, DMOs or thelargest firms are typical and on the operational level the ac-tors are mainly individual firms and workers, or groups ofthem (cf. e.g. Rusko, Kylanen, & Saari, 2009). Also, in thePyha-Luosto development work the distinction betweenstrategic level and operational level turned out to be essen-tial. Therefore, we separate these two levels and considerlinkages between these levels in the context of coopera-tion-competition dimension (Table 1).

Our case study shows the importance of multifacetedinterplay between cooperation and competition actions inthe same way as Lado et al. (1997) have described the coex-istence of competition and cooperation in their syncreticmodel. However, case analysis for Pyha-Luosto emphasisesthe discrepancy between strategic level and operational le-vel actions and their content.

For instance, it is possible that a strategic level decisionto follow cooperative tendency turns out to be competitivein the operational level (State VII in Table 1). The multifac-eted structure in Pyha-Luosto destination and in its develop-ment work provides several opportunities for that kind ofunintentional coopetition: the same activity contains bothcooperation in the strategic level and competition in theoperational level.

As another possible combination for strategic level coop-erative initiatives, we have identified that cooperative ten-dency is also followed on the operational level (State I inTable 1), or there may be cooperative and competitive ac-tions taking place in different situations on the operationallevel (State IV in Table 1). Of course, it is also possible tofollow competition or coopetitive tendency already on thestrategic level. In the case of Pyha-Luosto, the main ten-dency on the strategic level decisions has been cooperation.Thus, Pyha-Luosto development work has met especiallyintentional cooperation (I), cooperation based coopetition(IV) and unintentional coopetition in which strategic levelcooperation turned out to be competition in operational le-vel (VII).

Before the development work of Pyha-Luosto destination,there were not any remarkable strategic level cooperationaims, i.e., there was not any strategic level intentional

Table 1 Different forms of intentional and unintentional coopetition in the context of interaction between strategic level andoperational level viewpoints.

Strategic level (level of province, DMO, municipalities and the larger firms in the case; a longer time-frame)

Cooperation Coopetition Competition

Operational level (levelof single smaller firms orworkers in the case; ashorter time-frame)

Cooperation I Intentional cooperation II Cooperation basedcoopetition

III Unintentional coopetition:strategic level competitionturns out to be cooperation inoperational level

Coopetition IV Cooperation basedcoopetition

V Intentionalcoopetition

VI Competition basedcoopetition

Competition VII Unintentional coopetition:strategic level cooperationturns out to be competition inoperational level

VIII Competition basedcoopetition

IX Intentional competition


cross-border cooperation. Of course, even then there hasalso been cooperation on a grass-root level between differ-ent actors within a destination between firms and workers– perhaps also between destinations, but this cooperationhas not been on a higher ‘‘strategic level’’. Thus, beforedevelopment work of Pyha-Luosto the states have been III,VI and IX on the basis of Table 1.

By comparing the initial state (around the first set ofinterviews in year 2004) of the development work in thePyha-Luosto region and the more recent state (the partici-pant observation and an interview around 2007–2009; seee.g. interview extract 7) of the development work, it isinteresting that the overall attitude and activity on bothstrategic and operational level have moved from competi-tive to cooperative and again towards coopetitive tenden-cies. In the more recent data gathered, intentionalcoopetition is firmly identifiable. All in all, instead of skilful-ly balancing between cooperation and competition, themost common thought and action in the region seems tobe either cooperation or competition. This creates a signif-icant challenge for the future, as it narrows business possi-bilities in the destination and beyond.

Development work of Pyha-Luosto has met also someproblems and struggles (resortalism, attitudinal atmo-sphere, balancing of interests), as indicated in the extractsabove. One can ask whether the success of these projects ofdevelopment work would have been even better, if the stra-tegic level actors had taken into account also coopetitionstrategy as an alternative in organising development work.One claim rising from this case analysis is that coopetitionis also a noteworthy intentional tendency in the develop-ment work, it is not only emerging or unintentional ten-dency. Large-scale development work is based oncooperation, but the fact is that there are also opposite ac-tions, why not admit this fact already at the beginning ofthe development work? At the same time, it is also challeng-ing to balance between competition and cooperation, andthus, to manage and coordinate coopetition.

Discussion

This paper started by discussing the relationships betweencooperation and competition, and particularly that of coo-

petition. After that, we introduced a case study of tourismdestination, Pyha-Luosto, in the Finnish Lapland, within thecontext of coopetition in the service industries. As a result,we considered in the previous section the contributions ofPyha-Luosto case to the competition, cooperation and coo-petition debate. This contribution and the interaction be-tween strategic level and operational level were capturedin Table 1. These findings have more general implicationsfor management research.

Firstly, actors on the operational level have importanteffects on the emerging strategies of the projects, develop-ment work and business activities. In this study the locus isin the dimension between competition-based strategy andcooperation-based strategy, and in coopetition. Also, in thiskind of strategic positioning the individual actors of theoperational level have effects on the strategic outcome.This result has also reflections towards the discussions of‘‘strategy as practice’’ in management studies and of thestrategic importance of local actors in larger organisationalentities (e.g. Bower, 1970; Burgelman, 1983; Whittington,2006). The results of the fieldwork of this study show thesignificance of individual actors and workers, and their opin-ions especially in the context of different emerging versionsof unintentional coopetition.

Secondly, our research shows that coopetition is impor-tant and obvious feature also in the branch of tourism. Espe-cially regional project management of tourism (e.g. DMO),including multifaceted public and semi-public networks,provides several opportunities for different forms of coope-tition. In addition to co-location of the actors, the proximityof public, semi-public and private organisations creates astrategic-operational environment where coopetition maybe coincidental and serendipitous. From the viewpoint ofstrategic business planning, all these features of tourism of-fer numerous possibilities for unintentional realisation ofstrategies, or emergent strategies (cf. Mintzberg, 1978)within the service industries.

The most important statement of this research, how-ever, is that these findings, particularly the framework de-picted in Table 1, are useful regardless of the consideredbusiness sector. Strategic and operational activities are in-volved in most business and public organisations, in partic-ular in the service industries. Furthermore, the dimension


of cooperation and competition is an important characteris-tic of strategic planning in business management (cf. Bran-denburger & Nalebuff, 1996). This framework is suitable indescribing the emplacement of a certain business activityalong this dimension.

Also, by using this framework we are able to considermovements in the strategic position of a certain businessactivity. For example, in this Pyha-Luosto case the centerof gravity in the framework depicted in Table 1, have changedover time from intentional competition or competition based(intentional or unintentional) coopetition towards inten-tional cooperation, or cooperation based (intentional orunintentional) coopetition. This change is based on the estab-lished local development project and the actions of the pub-lic and semi-public organisations associated with the DMO.Generally, the actions of the public sector and semi-publicorganisations might change ‘‘the centre of the gravity’’ be-tween cooperation and competition dimension. This resulthas been noticed also in the study by Mariani (2007).

Conclusion

We have considered here the concept of coopetition in thecontext of service-dominant logic (and service industries),in general, and in tourism, in particular. A tourism destina-tion, as the case of Pyha-Luosto shows, is a location-basedentity, in which simultaneous cooperation and competitionbetween firms seems to be commonplace. Already a loca-tion – an agglomeration of varied actors, institutions andorganisations, and a sense-of-place – sets the stage forintentional and unintentional cooperative attitudes and ac-tions between competing firms. Moreover, the many dimen-sions of the holistic destination-level tourism product,different experiences and coordinated supply chains, whichconsist of separate but interconnected services provided byseveral firms and other local or non-local actors, give birthto coopetition. Our findings, based on interviews and on-siteobservation, emphasise, more specifically, the importanceof unintentional, unconscious coopetition.

Often the interaction between strategic level decisionsand implemented every-day actions and practices of firmsand other actors takes many forms of simultaneous compe-tition and cooperation. For instance, if a destination, a firmor an association of firms is following a cooperative guidingprinciple on a strategic level, it is possible, however, on apractical or operational level to identify, also, competitiveactions of individual entrepreneurs, managers and firms. Orvice versa, in the case of a competitive strategy, a cooper-ative thinking seems to take place on the operational levelbased on e.g. serendipity or individual choices.

In the case of the Pyha-Luosto destination, this in-be-tween complexity of cooperative and competitive attitudesand actions, both intentionally and unintentionally, be-comes even more fascinating as the destination holds adualistic structure of two resorts searching for balance be-tween complementary and competitive natures. This dual-ism increases the forms of operations. In addition to thelevels of destination and firms, there is a level of theDMO, Destination Management Organisation. Thus, theopportunities for different combinations of intentional orunintentional coopetition are even more versatile.

One important research question was to provide newviewpoints for the coopetition discussions and to study coo-petitive ways of organising business processes with the helpof this case study research. Actually, on the basis of thecase study, our paper provides a new framework to orga-nise conceptual relationships between unintentional andintentional cooperation, competition and coopetition.Important contribution is that beyond this typology, alsostrategic and organisational level and linkages betweenthem should be acknowledged. Introduced framework isbased on this idea.

The results stemming from the case study research meetsome limitations. In this study we have considered one tour-ism destination, Pyha-Luosto. These results of this researchreflect the coopetitive ways of organising business pro-cesses in this particular district. However, these observa-tions considering coopetitive actions and dimensions arebased on general attitudes of interviewees towards cooper-ation, competition and between these two. Furthermore,the introduced framework consists of elements typical fordifferent forms of organisations. Thus, there is a need andpossibility to consider this framework also in the contextof other districts and branches of business in studies tocome.

Also, we have identified coopetition as one possible mainstrategy in large-scale development projects and work.There are always different forms of competition in cooper-ative projects, why not establish the whole developmentwork according to this assumption? Could it be possible todetermine in which functions there is competition, andwhich actions could be based on cooperation? In this casethere is not only unintentional coopetition but also inten-tional coopetition.

To close, the changing business landscape, in general,and coopetition within the service industries, in particular,calls for new management practices. The transformationfrom public commodities towards business services andpaid-for experiences (e.g. Pine & Gilmore, 1998) that seemsevident, for instance, in the tourism industry reformulatesalso the roles, responsibilities and inter-organisational rela-tionships between public, semi-public and private organisa-tions. Within the new service-dominant logic (e.g. Vargoet al., 2008) the more intensified role of the customer asproducer, as ‘‘prosumer’’ (see also Toffler, 1970), sets chal-lenges to organisational and managerial service processes.Probably, a more thorough understanding of the conceptand dynamics of coopetition – both strategic and opera-tional, and moreover, as intentional as unintentional –can help to create a new agenda for business management.

Managerial implications

This study suggests that a coopetitive paradigm can becomean important approach in evoking and enhancing more par-ticipative management practices where the public–privatepartnership and the value co-creation between the cus-tomer and the service companies have more space to takeplace. The complexity of multi-stakeholder and inter-sectoroperational environment calls for specialised competenciesin foresight and forecast, identification of strategic shiftsand creativity in partnerships.


Managerial implications and practices for business andregional development can be summarized as five intercon-nected points. First, managers in companies and in develop-ment organisations should take into account in their long-term strategic planning the importance of serendipity andhaphazard of the short-term operational actions, and howthey frame emergent strategies. This characteristic is par-ticularly significant in spatial development projects wherethe proximity of the competing companies is remarkable.

Who? How? When? Why?

Thematicconversationalinterviews

10 interviews; 9 tourismentrepreneurs or key persons,small-sized companies,specialised in activityprogrammes, accommodationand ski lift services; 1 moreextensive, regional viewpoint

Duration of the interviewsfrom 1.5 to 4 h; the themesaddressed were thesurrounding region, productdevelopment, overallatmosphere, workingtogether with the others, andtourism business development

Summer 2004,and winter 2009

Particular motive was to learnabout the meanings attachedand given to strategic andoperational plans, decisionsand actions; the voice of theentrepreneurs; competitors�viewpoints

Participantobservation

Part taking in about 20meetings and events; bothofficial and unofficial; peoplerepresent, e.g. localcompanies, municipalities,governmental organisationsand other stakeholders

Duration of the observationfrom 20 min to 4 h; mainlyorganised by the regionalassociation or singleoperators; ethnographicfieldwork and field notes, andself-reflections

February–November 2007

Particular motive was toobserve how things happenin situ, in natural settings; apossible saying/doing gap;processes, practices andatmosphere of planning anddevelopment work; public–private partnership

Documents Reports, memos, mediareleases, brochures,marketing material, publicdocuments, confidentialmaterial, reports, strategiesand statistics

Most of the material isavailable in the internet as e-documents, or as paperversions; mainly produced bythe regional association,single companies, and publicorganisations

From the year2000 onwards

Particular motive was toidentify some patterns howthe tourism region ispresented (viacommunication practices)both internally andexternally; what is said, whatis left uncovered

Second, by carefully mapping the operational environment– stakeholders, diverse processes and the dynamics ofchange – it is easier to maintain the strategic processesof the development projects. In the spatial developmentprojects the main strategy is usually to promote partner-ships between many stakeholders. In these kinds of cooper-ative projects, however, also competitive features arepresent in the work. As a result, the emergent strategy ispresumably based on coopetition. Thirdly, the managersshould think over this coopetitive tendency already in theirinitial strategies and analyse this feature carefully in theirstrategic planning processes and when pondering one�sown managership.

More broadly, as the fourth point, the familiarity withdifferent levels and stakeholders – including their capabili-ties, business experiences and practices – involved in devel-opment projects makes an important starting point formanagement and planning. In order to achieve plannedstrategies, not emergent strategies, it is vital to direct thestrategies and content of the project in a way that suitsto and supports local circumstances. The fifth and finalpoint we wish to make deals with the strategic approach.

When strategies are considered as something people do intheir everyday work, instead of something that organisa-tions have, this gives more room to innovation and creativ-ity in organisational and management practices in complex,global and local inter-organisational settings.

Appendix 1. Ethnographic data for the study(see also the Section Methodology)

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Regional Council of Lapland (2003) Lapland tourism strategy 2003–2006. Rovaniemi. An English Summary available at: <http://www.lapinliitto.fi/c/document_library/get_file?folderId=21330&name=DLFE-677.pdf>. Read: 10 June �10.

Regional Council of Lapland (2007) Lapland – Vitality for life.Lapland tourism strategy 2007–2010. Rovaniemi. An EnglishAbstract available at: <http://www.lapinliitto.fi/matkailu/abstract%20of%20Lapland%20Tourism%20Strategy%202007%20-%202010.pdf>. Read: 9 February �09.

MIKA KYLANEN works currently asresearcher at the University of Lapland inRovaniemi, Finland. He is writing his PhDthesis that deals with collaboration andcompetition practices in tourism destina-tions. Kylanen�s background is in organizationstudies. His main research interests areinter-organisational relations, tourism prod-uct development, culture and experienceeconomy and ethnographic methodology.

RAUNO RUSKO, Lic.Soc.Sc. is a lecturer and
a PhD candidate of management and organi-sation in the Faculty of Tourism and Businessat the University of Lapland, Finland. He hasresearch interests in cooperation and net-working of enterprises in several branches,e.g. in tourism and in forest industries. Hehas, to his credit of these branches, pub-lished in international refereed publications.
http://www.lapinliitto.fi/c/document_library/get_file?folderId=21330&name=DLFE-677.pdf



http://www.lapinliitto.fi/matkailu/abstract%20of%20Lapland%20Tourism%20Strategy%202007%20-%202010.pdf

