Great minds drink alike - why collaboration persists in mature market niches

Abstract: This paper focuses on persistence of collaboration in the context of a market niche in a mature market. It is often assumed that after initial market creation, as the niche matures, the importance and prevalence of cooperative activities diminishes. We observe the craft beer industry in Northern Europe, specifically the markets in Denmark, Sweden and Finland, in order to further our understanding of why organizations engage in cooperative activities after the initial market creation phase. We find that apart from collective identities, resource partitioning and market driving play a significant role; we also find that craft beer breweries leverage synergies arising from resource heterogeneity and observe the specific case of heterogeneously distributed know-how. We propose that cooperative activity creates and continuously develops a joint knowledge pool that drives product development, contributes to a better product overall and creates a significant mobility barrier against much larger, established incumbents. We also find evidence of cooperative activity in maintaining identity and established infrastructure, and of collaboration being used as a platform for market entry.