Competitive Interdependence Definition

In business, the term competitive interdependence is used to describe the relationship between companies that are trying to gain market share in the same industry. This type of relationship can be either cooperative or adversarial, depending on the strategies that each company employs.

In a cooperative relationship, companies may work together to create new products or services, or they may agree to share resources in order to reduce costs. In an adversarial relationship, companies may engage in price wars or other types of competition in order to gain an advantage over their rivals.

The level of interdependence between two companies depends on several factors, including the size of the market, the number of competitors, and the type of products or services offered. In general, competitive interdependence is highest when there are few competitors and when the products or services are similar.