1 / 17

Co-opetition Adam Brandenburger and Barry Nalebuff

Explore the concept of coopetition to drive value creation in business interactions. Identify key players, options, goals, and time structures in the game. Highlight the importance of strategic analysis and changing game dynamics to achieve success.

antonialee
Download Presentation

Co-opetition Adam Brandenburger and Barry Nalebuff

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Co-opetitionAdam Brandenburger and Barry Nalebuff

  2. Limitations of the Hypercompetition Perspective • Ignores the point that competition and co-operation can co-exist. Examples include the development of Advanced Photo Film, DVD, etc. • Sometimes it may be in the best interests of players not to jump to the next level of dynamic competitive interaction but into co-operative competition - coopetition • This requires figuring out the situation the firm is facing and then looking at the firm’s valuenet

  3. What game is being played? Questions to ask yourself are: • Who are the key players? • duopoly game; oligopoly game; etc… • What options are open to the players? • pricing game; advertising game; etc. • What goals are the players pursuing • market share? profits?.. • Are goals complementary or conflicting? • issues the players agree on, sources of conflict, etc.. • What is the time structure of the game? • one shot, repeated, simultaneous, sequential, etc.. • What is the information structure of the game? • information as a source of bargaining strength

  4. How are you doing in the game? • If you find yourself in a “bad box” what do you do? • Play the existing game better • Try to get a good outcome for yourself • Change the game • Seek answers outside the “box”

  5. The ValueNet Customers Substitutors Company Complementors Suppliers

  6. Complementor • A player is a complementor if customers value your product more when they have the other player’s product than when they have your product alone. • Oscar Mayer and Coleman’s • A player is a competitor if customers value your product less when they have the other player’s product than when they have your product alone. • Pepsi and Coke

  7. Who are the complementors? • Cars Auto loans, insurance, roads • Televisions VCRs • TV shows TV guide • Fax machines Phone lines • Catalogs Delivery services • Hardware Software

  8. Valuenet for American Airlines American, United & Mesa are suppliers Customers Short Haul (NEW) British Airways, Iberia Car Rentals Mesa Air, United American Long Haul Boeing Bombardier Substitutors/ Complementors Pilots Association Airbus

  9. Intel - A Partial ValueNet Limit customer power & competitor response via Mother- board manufacture IBM manufactures AMD Customers limit dependence - alternative suppliers HP; Compaq; IBM Microsoft HP (Merced) Sun (Solaris + Merced) Compaq (Digital TV standards with M’Soft) NatSem / Cyrix AMD / IBM Microsoft INTEL Suppliers Digital CableTV Standards NetPC Standards Solaris Compatibility of NetPC design & Merced Limits Microsoft power in ValueNet

  10. Real Networks - ValueNet How can Real Networks enhance Added Value ? Boeing, Mercedes, Kodak, Lockheed, News Media Vxtreme NetShow (Microsoft) Microsoft Sun Real Networks Suppliers Microsoft has 10% stake in RN Sells competing products RN has a deal to optimize RA for Solaris

  11. How can the game be changed? • The game can be changed by changing • Players • Added value • Rules of the game • Tactics employed • Scope of the game

  12. Changing the players • Bring in customers - Increase industry demand. This helps competitors, but may be worthwhile for you. To do this… • Educate consumers about your product (Diapers in Japan;Whitening t’paste) • Pay customers (esp. early adopters) to play (Samples, Netscape) • Subsidize some customers, other full paying customers will follow (Initial discount to lower risk) • Become your own customer (Soaps and cottonseed oil / Cyrix PC) • Be Inc. & the WWW • Bring in suppliers • Holland Sweetener Co. and Coca-Cola • Compaq / AMD / Intel • Bring in complementors • Do it yourself. Nintendo - both h/w & s/w. Intel • Pay complementors to play (at least initially) • Be Inc. & IBM / Motorola / PowerComputing • Bring in competitors • License technology to make money, avoid complacency • Create a second source to encourage buyers to adopt technology

  13. Changing the added value Your value added = Size of the pie when you are in the game - Size of the pie when you are not in the game. How to increase added value? • Limit your supply • DeBeers and diamonds; Nintendo & video games; Beanie babies • Downside: Shrinks the pie today; Leaves entry opportunity open • Raise amount consumers are willing to pay • Policies that build loyalty (frequent flier miles) increase willingness to pay - GM / Ford credit cards; Intuit • Lower competitors’ value • Softsoap - by cornering the supply of pumps • Questions to ask: • What is your added value? • How can you increase value by changing supply, buyers, suppliers, complementors, or substitutors in your value net? • What is the value added by other players? Should you be increasing or decreasing their added values?

  14. Changing the rules Questions to ask are: • Which rules are helping you? Which ones are hurting you? Rules can be for pricing, advertising, product variety, satisfaction, etc. • What kinds of contracts are you willing to write with your buyers and suppliers? Do you want Match Competition Clauses? What does this do for you? • Do you have the power to change the rules? Does someone else have the power to overturn them? • Can you signal your commitment credibly (Kiwi Air)

  15. Changing tactics Questions to ask are: • How do other players perceive the game? How do these perceptions affect the play of the game? (NY Post vs. Daily News) • Which perception do you want to keep, which to change? • Do you want the game to be transparent or opaque (fee negotiation between investment banker and firm - guarantee / % fee)? When do you want to send signals that benefit you? When do you want to preserve the fog? • To establish credibility (clear the fog) • Accept a pay-for-performance contract • Offer guarantees or advertise • Ask others to demonstrate their credibility to you • To preserve the fog • Create complexity (long distance calling rates) • Bluff: Ask yourself whether you will be believed and under what circumstances • Ask what others stand to gain by preserving the fog, and what they could be bluffing about

  16. Changing tactics Appear Tough Appear Soft • Competitive stances that can be used to clear / add to the fog Top Dog Fat Cat Being Big Lean & Hungry Puppy Dog Being Small

  17. Changing the scope Questions to ask are: • What is the current scope of the game? Do you want to change it? Games are linked over time and across markets (geographic and product markets) • Do you want to link the current game to other games? • When multi-market contact could be beneficial • Do you want to delink the current game from other games?

More Related