Co-Opetition as an Innovation 1

CO-OPETITION AS AN INNOVATION TO AID THE DIFFUSION OF SCREW ON WINES CAPS IN THE UNITED STATES

Co-Opetition as an Innovation

To Aid in the Diffusion of Screw on Wine Caps in the United States

Jessica Hollon

University of Wyoming

Co-Opetition as an Innovation 2

Overview of the Case Study

Garcia and Atkin’s case study focused on the resistant innovation of the screw on wine

cap in the United States. They compare the diffusion of the screw on wine cap, or stelvins, in the

United States with the diffusion of this innovation in Australia and in New Zealand. In both

Australia and New Zealand, Garcia and Atkin attribute the diffusion of the stelvins to the co-

opetition between wine producers in each of these two countries. Co-opetition being, “the

strategy of cooperating with one’s competitors as a means of increasing technological diversity

and improving innovation output” (Brandenburger & Nalebuff, 1996). This strategy was not

used in the United States and Garcia and Atkin theorize that this is why the screw on wine cap is

still a resistant innovation in our country.

Focus of Evaluation

By evaluating the Garcia and Atkin case study using Roger’s model of perceived

attributes of innovations (relative advantage, compatibility, complexity, triability, and

observability) and Ram and Sheth’s barriers that prohibit consumers from adopting an innovation

(usage, value, risk, tradition, and image barriers) I will point out that while a screw on wine cap

is still a resistance innovation in the United States, it could be an innovation adopted by the

majority of consumers if marketing strategies were utilized in a co-opetition format.

Evaluation

The screw on wine cap is not perceived as a relative advantage in the United States.

Rogers (2003) states that “for an innovation to have a relative advantage is does not necessarily

Co-Opetition as an Innovation 3

mean that the innovation is of objective advantage, but that an individual perceives the

innovation as advantageous “(p.15). The consumers in the United States did not see the screw on

cap as an advantage because they were not educated by wineries to the fact that the screw on cap

could keep the wine from oxidizing, or that it could eliminate cork taint; therefore they were

skeptical of its usefulness.

Evaluating this same concept of screw on caps not being a relative advantage to

consumers using the Ram and Sheth model of innovation barriers, this problem would fall under

the risk barrier category. Ram and Sheth (1998) define risk barriers’ as “becoming relevant

when customers are uncertain about physical risks, economic risks, functional risks, or social

risks from using a product.” I believe that the risk these consumers were facing was the

functional risk, and also the social risk. They had no background knowledge of the functional

advantages of screw on caps, and also “most US wine consumers associate the screw on cap with

inexpensive jug wines (Garcia & Atkin, p. 5) making it social risks as well.

There is also the problem of the screw on cap not being compatible with the past

experiences of wine connoisseurs. Compatibly is defined as “the degree to which an innovation

is perceived as being consistent with the existing values, past experiences, and needs of potential

adopters” (Rogers, 2003, p. 15). In the past wine has largely been associated with a corked top,

so for consumers to make a new association on their own, without marketing to help them, is

difficult. This is also an example of a tradition barrier. Ram and Sheth (1989) point out that

“tradition barriers occur when an innovation requires a consumer to deviate from established

traditions.”

Co-Opetition as an Innovation 4

The complexity of this innovation is actually less complex then the cork. To unscrew a

lid is not difficult, in fact most consumers use this type of lid in many other household products,

many more then have corks. Therefore, the complexity, or “the degree to which an innovation is

perceived as difficult to understand or use,” (Rogers 2003) is really less in the case of the screw

on lid then of the cork.

However, there is a huge image barrier when it comes to the screw on lid for wine. Ram

and Sheth (1998) define an image barrier as “occurring when a consumer associated an

unfavorable image with a product.” As pointed out previously in this paper, the majority of the

consumers in the United States associate the screw on cap with inexpensive, low quality wine.

In regard to Rogers (2003) triability, or “the degree to which an innovation may be experimented

with on a limited basis,” (p.16) I do feel as though consumers could buy a bottle of wine they

had previously bought with a cork, and try it with a screw on cap. However, later in this paper I

will mention some possible additions to the co-opetition process, one of which is putting screw

on caps on high priced wine to show that it is not just for lower end products. In this instance the

triability of the product would go down, because a consumer may not be willing to spend a lot of

cash on a product if they are unsure that the screw on cap will have the same effect of the cork,

which they prefer.

The major advantages of the screw on cap innovation are not visible with the human eye,

the customer has to buy the product, and try it. For this reason the screw on cap is not an

innovation with great observability. Observability is defined by Rogers (2003) as “the degree to

which the results of an innovation are visible to others” (p. 16). The results of less oxidation and

Co-Opetition as an Innovation 5

no cork taint are not visible which a problem is for consumers who are not educated on the

advantages.

Using Co-opetition as an Innovation

An innovation is defined as “an idea, practice, or object perceived as new by an

individual or other unit of adoption” (Rogers, 2003, p. 36). Therefore, the practice of co-

opetition, “the strategy of cooperating with ones’ competitors as a means of increasing

technological diversity and improving innovation output” (Bradenburger & Nalebuff, 1996) can

be viewed as an innovation in and of itself. It is an innovation that was not used by the United

States wine producers, but was used by the Australian and New Zealand wine producers who

were much more successful in diffusing the innovation of screw on wine caps.

I believe that had the United States wine companies worked together in a form of co-

opetition, the screw on wine cap would have been more successful. The cap is an innovation

with relative advantage over a cork, as well as being not complicated to use. Had the US wine

companies formed a marketing strategy together where the consumers were educated on the

advantages, as well as employed strategies through multiple communication channels, given time

and much marketing effort the social connotation of screw cap wine being “cheap” may have

been dismissed. I believe they will need to form a united front for the consumers to come

around. They may also try what the case study suggested, putting the screw on cap on high

priced wine. I however see a disadvantage to this.

The disadvantage may be, that in the beginning consumers who can and would buy the

higher priced wine, may chose not to because they are not totally sold on the screw on lid and are

not willing to potentially waist that much money on it. However, if screw on lids were put on

Co-Opetition as an Innovation 6

mid priced wines of all US brands, the consumers would begin to see that the lid is what most

brands are going with, and would then be the change agents the companies need for diffusion.

These consumers could become opinion leaders, who are “individuals who lead in influencing

others’ opinions” (Rogers, 2003, p. 300).

Ultimately I believe that the target audience in the United States to start the diffusion of

the screw on cap of wine would be the consumers who on a regular basis by mid-priced bottles

of wine. Once these wines start to sell, consumers of high priced wine would likely be more

open to the cap as well. I do not believe even this marketing strategy alone will be successful if

co-opetition is not utilized. If consumers are getting differing messages from different

companies they will likely go with their comfort level and past experience- the cork.

Personal Reflection

After analyzing this case, I have learned that even though an innovation may seem great

on paper, it does not always diffuse. I think that the relative advantage of a screw on lid is high,

but that a cork is traditional. It is hard for even the most influential companies to change

peoples' feeling on issues that deal with heavy connotation and are rooted in tradition. When

discussing changing something that is traditional to most people, I would only assume you would

come up against a lot of opposition.

Co-Opetition as an Innovation 7

Brandenburger, A. M. & Nalebuff, B. J. (1996). Co-opetition: a revolution mindset that

combines competition and cooperation: The game theory strategy that’s changing the

game of business. New York: Doubleday.

Garcia, R. & Atkin, T. ( ). Co-opetition for the diffusion of resistant innovations: A case study

in the global wine industry. Institute for Global Innovation Management.

Ram, S. & Sheth, J. N. (1989). Consumer resistance to innovations: The marketing problem and

solution. Journal of Consumer Marketing, 6(2), 5-14.