Learning from partners. Essentially all collaborative arrangements can be characterized as a learning race (Hamel et al., 1989). To learn the underlying processes and capabilities that are most critical in creating customer values lies at the heart of cooperative strategy. Sony and Matsushita all benefited from their cooperation with Philips in learning how to make radios and tape recorders. Both have also benefited from their cooperation with American firms in early stages of the VCR development (Yoffie, 1990). Learning from partners made them strong competitors.