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The Right Game: Use Game Theory to Shape Strategy

The Right Game: Use Game Theory to Shape Strategy Adam M. Brandenburger, Barry J. Nalebuff Harvard Business Review, July-August, 1995 .

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The Right Game: Use Game Theory to Shape Strategy

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    1. The Right Game: Use Game Theory to Shape Strategy Adam M. Brandenburger, Barry J. Nalebuff Harvard Business Review, July-August, 1995

    2. The Right Game: Use Game Theory to Shape Strategy Adam M. Brandenburger, Barry J. Nalebuff Harvard Business Review, July-August, 1995 “Successful business strategy is about actively shaping the game you play, not just playing the game you find.”

    3. Lessons from Game Theory Look at the situation from the perspective of all others’ involved Look for win-win, not just win-lose opportunities Look for opportunities to “change the game” for the better

    4. “Co-opetition” Businesses must both cooperate to create value, even while competing to divide this value among themselves

    5. The Value Net Company Customers Suppliers Substitutors Companies / products which could substitute for what you have to offer Complementors Companies / products which complement what you have to offer

    6. Competition and Cooperation

    7. Elements of the Game Players Added Values What each player adds to the value inherent in the total game Rules Tactics (Perceptions) Scope

    8. Changing the Players Players are participants in the Value Net The Company itself, and its Customers, Suppliers, Substitutors, Complementors How does the game change as players come in or out? Canadian Airlines no longer exists in the Canadian airline industry.

    9. Changing Added Value What added value does each player bring to the game? If a player were not participating at all, how would the value of the overall game be affected? Bobby Hull joining the Jets gave the WHA instant credibility.

    10. Changing the Rules Rules determine how the game is played Can the rules be changed to make the game more favorable for one, or for all? Guarantees to match lowest price Funding rules for universities in Manitoba

    11. Changing Perceptions Players’ perceptions of the game influences the way they play it. Commitment strategies, (as ploys) Publicly committing to something to make others perceive you’re serious

    12. Changing the Scope Scope is the boundaries of the game Tying issues together in negotiations Softwood lumber and energy? Opening a “second front” in competition Hezbullah attacking Israel from Lebanon

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