Strategic Dilemmas in Digital Educational Product Development: Cooperation vs. Competition

The use of "immersive" technologies such as AI, VR, AG is transitioning from exotic to a necessity, disrupting traditional learning process. Meanwhile, the EdTech industry transforms into an open ecosystem, illustrating shorter product life cycles and increased product complexity, requiring from incumbent and new entrants improved organisational capabilities and know-how. The changes in the educational landscape challenge the value creation process in many organisations, decreasing the market barriers and providing opportunities for new actors. At the same time, established and new players in the EdTech market are required to develop ability for strategic fit and flexibility - creating new business models rather than rearranging old products and categories in correspondence with the customer preferences in the 21st century (Weber, Tarba, 2014). Enforcing complex strategic decisions, in institutionally embedded education systems, and new digital educational product (DEP) development many organisations are facing a dilemma: should a new Bulgarian DEP provider collaborate or compete in his quest for business growth and market penetration? The current study does not seek to analyse specific aspects of strategy, related to performance or a simulated entry mode. It aims to identify strategic options for new entrants in Bulgaria`s EdTech market, treating alliances and institutional networks as contextual structures. To reach the research aim a correlation analysis was conducted to analyse the relationship between teachers` DEP adoption intensity and institutional embeddedness through their preferences for institutionally recommended DEPs, positioning educational institutions as significant structural forces. Based on game theory, particular attention is paid to competitive maneuvers throughout which organisations determine collaborative or competitive strategies. Finally, the article provides context-specific insights from the perspective of startups and early-stage developers, interpreting educational institutions as primary adoption gatekeepers in their pursuit of sustainable and quality education for children aged 11-15 years.