Fuji e xerox

First Quarter, 1997, pp. 4-16.

Competing in Constellations: The Case of Fuji Xerox
By Benjamin Gomes-Casseres
The relationship between Xerox and Fuji Xerox, its joint venture in Japan, is the centerpiece of this commentary on how alliances among companies are forging new units of economic power known as "constellations." Internal rivalry can put constellations at a disadvantage against single-company rivals, and the ability to manage the balance of competition and cooperation is critical to success.
In a world of global businesses and extended enterprises, it often makes more sense for companies to team up than go it alone. Here is how Xerox and Fuji Xerox collectively compete. Cooperation among companies has grown rapidly since the early 1980's, as alliances have proliferated in one industry after another. At the same time, however, the competition in these industries has in many ways become even fiercer than before. This flies in the face of traditional economic thinking. As Adam Smith observed: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."(1) In fact, modern alliances do not so much suppress business rivalry as transform it, giving it a new shape that is often even more virulent than the old. The new "collective competition" grows out of the very dynamics of collaboration. Simply put, business rivalry now often takes place between sets of allied companies, rather than between single companies. The alliances among companies are forging new units of economic power -- "constellations" that compete against each other as well as against traditional single companies. In this new world, the way companies manage the collaboration inside their constellation affects the competitive behavior and performance of the group as a whole. And the performance of each company comes to depend not only on its own capabilities and strategies