Why Do Mnes Both Make And Coopete For Innovation?

While multinational enterprises (MNEs) possess the resources and knowledge to develop innovation projects internally with their own international subsidiaries, they sometimes prefer to develop innovation projects with their competitors. We investigate the circumstances under which MNEs prefer to "make" or "coopete" for certain specific innovation projects, which has not previously been addressed in the literature. Based on a case study of Airbus Defence and Space, we study two telecommunication satellite innovation projects (one developed internally and the other with a competitor). We show that both make and coopete strategies lead to short- and long-term benefits as well as risks. More precisely, we underscore that coopete decisions provide more short-term benefits than make decisions. By contrast, in the longer term, make decisions are more beneficial than coopete decisions. Therefore, we emphasize that for a given project, managers weight the options for and against each choice based on specific time frames, keeping in mind the necessity of both making and coopeting at the corporate level.