1 Ed
Hardcover, 290 pages
List: $24.95 [
click here to order now ]
Published by Doubleday
Publication date: June 1,1996
ISBN: 0385479492
Synopsis:
In the tradition of Reengineering the Corporation, Brandenburger and Nalebuff offer a
revolutionary approach to business based on game theory--an economic analysis tool whose
developers won a 1994 Nobel Prize. They show managers how they can profit by changing the
way they think about customers, competition, and the market.
Synopsis:
Though often compared to games like Chess and Poker, business is different. In order to
win at Chess or Poker, someone else has to lose. In business, however, your success does
not require others to fall and you don't have to play by the rules. Coopetition reveals a
step-by-step strategy showing listeners how they can engage in healthy coopetition--and
win in business. Simultaneous hardcover release from Doubleday. 4 cassettes. --This
text refers to the
audio cassettes edition of this title.
The authors, Adam Brandenburger & Barry Nalebuff [abrandenburger@hbs.edu & barry.nalebuff@yale.edu ], 09/25/96:
A NYT op-ed on Co-opetition & a review from The Economist
TO succeed in business you have to outsmart the competition, capture the market, make a
killing and then bury the competition, right? Well, half right. Competitors aren't the
whole picture. Providing complementary products -- or making sure they are available -- is
the other half of the game.
A complement to one product is any other product that makes the first one more, rather
than less, attractive. Hardware and software are complements. So are hot dogs and mustard,
cars and car loans, cable television and TV Guide, the Internet and high-capacity digital
phone lines, catalogues and overnight delivery services -- even red wine and dry cleaners,
or Siskel and Ebert.
In new markets, paying attention to complements is a necessity. Without key complements,
the market may never take off. In established markets, attending to complements has less
dramatic but still valuable results. Here, complements most likely exist, but you can make
your product more attractive by making the complements better, more plentiful and less
expensive.
Traditionally, business strategy has largely focused on competition -- Coke versus Pepsi
-- and in the process underplayed complements. There hasn't even been a word to describe
providers of complementary products. So we have created one: "complementor," the
natural counterpart to "competitor."
Although you probably know your competitors, chances are you have thought less about your
complementors. More to the point, do you know which complementors are missing? Even a
great product can sit on the shelf until key complements are developed. You can't assume
that the essential complements to your business are going to be there. And if they are
missing, you can't assume that the market will solve the problem. You have to work with
others to create them, or create them yourself.
Companies involved in today's information revolution are prime candidates for this focus
on complements. A new system of creating and sharing information is evolving, and it has
many complementary parts. It is not enough to invent one part of the new system; you have
to pay attention to all the parts at once.
Intel understands this idea, and provides a lesson for every business. The company's
engineers have done a brilliant job of developing increasingly powerful computer chips.
But the chip is only part of a larger system, and most of us already have more processing
power than we need to run our favorite applications. Thus, outpacing competing chip makers
is not enough: Intel must also engineer demand for its next-generation chips. So Intel is
on the lookout for complementors: It has teamed up with MCI to provide more bandwidth for
networks. It is working with others to develop interactive games on the World Wide Web.
Intel is even venturing outside its core business to insure that essential complements get
off the ground. As desktop videoconferencing takes off, so, too, will demand for Intel's
newest chip, the Pentium Pro. That is why the company has invested more than $100 million
in developing Proshare, a video-phone product.
He point of all these initiatives is to promote applications that push the limits of
processing power. Upgrading to Intel's latest chip becomes a necessity, not a luxury.
There is a hundred-year-old analogue to Intel's strategy. At the turn of the century, the
car was a technological revolution. But the value of a car -- and hence the demand for one
-- was severely limited by the lack of many essential complementary products: roads, gas
stations, mechanics and more. The fledgling auto makers did not leave the development of
these markets to chance. For example, through the Lincoln Highway Association, they helped
promote highway construction.
Some complements to the automobile already existed. One was loans -- but here, too, car
makers took an active hand in making them more accessible and attractive. First General
Motors and then Ford set up operations (GMAC and Ford Motor Credit) to make car loans
directly to consumers and thereby fuel demand for their cars.
Entering a complementary business requires that companies do their accounting a little
differently. You cannot measure the profitability of the two businesses independently, nor
can you demand that each pay its own way. The right question to ask is whether you are
maximizing the combined profitability of the two businesses. For example, subsidizing
Proshare makes sense for Intel: Increased sales of the Pentium Pro will more than make up
for anything the company loses on Proshare.
Of course, it is possible to have a complementary business that makes money. Over the last
decade Ford has earned more on car loans than on car sales. You can say that car loans
help stimulate car sales, but you can also say that car sales help stimulate demand for
car loans. The fact is, with complements, you cannot look at one part of the business in
isolation. You have to look at the whole picture.
What businesses should you be in? With the fallout from the conglomerate era fresh in
people's minds, the prevailing wisdom is not to expand beyond your core business. People
say, "Stick to your knitting." But this mantra is too simplistic. It does no
good to click your knitting needles if there is no demand for sweaters. You should get out
of your rocking chair and prod the market.
Managing complements is a smarter way of doing business, and there are endless
possibilities. Michelin tires and Michelin Guides; Ikea and play areas; Hallmark cards and
in-store reading glasses; bookstores and coffee bars. Identifying and assembling
complements is often the best way to compete.
THE ECONOMIST, June 15, 1996, U.S. Edition
It's only a game
Managers have much to learn from game theory--provided they use it to clarify their
thinking, not as a substitute for business experience
FOR old-fashioned managers, business was a branch of warfare--a way of "capturing
markets" and "making a killing". Today, however, the language is all about
working with suppliers, building alliances, and thriving on trust and loyalty. Management
theorists like to a thing as "win-win", and that business feuds can end up
hurting both parties. But this can be taken too far. Microsoft's success has helped Intel,
but it has been hell for Apple Computer. Instead, business needs a new way of thinking
that makes room for collaboration as well as competition, for mutual benefits as well as
trade-offs. Enter game theory.
Stripped to its essentials, game theory is a tool
Decisions affect each other. Until the theory came along, economists assumed that firms
could ignore the effects of their behaviour on the actions of rivals, which was fine when
competition was perfect or a monopolist held sway, but was otherwise misleading. Game
theorists argue that firms can learn from game players: no card player plans his strategy
without thinking about how other players are planning theirs.
Economists have long used game theory to illuminate practical problems, such as what to do
about global warming or about fetuses with Down's syndrome. Now business people have
started to wake up to the theory's possibilities. McKinsey, a consultancy, is setting up a
practice in game theory. Firms as diverse as Xerox, an office-equipment maker, Bear
Stearns, an investment bank, and PepsiCo, a soft-drinks giant, are all interested. They
will no doubt seize on "Co opetition" (Doubleday, D because it is written by two
of the leading names in the field, Adam Brandenburger, of Harvard Business School, and
Barry Nalebuff, of the Yale School of Management.
The author, barry.nalebuff@yale.edu ,
05/19/96:
For more information on Co-opetition, have a look at our website: http://mayet.som.yale.edu/coopetition
The publisher, Currency/Doubleday www.bdd.com ,
09/25/96:
The game of business changes constantly. So should your business strategy.
When a business strategy is so new is design, a new word must be coined to capture its
value. Such is the case with co-opetition, a method that goes beyond the old rules of
competition and cooperation to combine the advantages of both. Co-opetition is a
pioneering, high-profit means of shaping business relationships.
The Harvard Business School’s Adam Brandenburger and the Yale School of
Management’s Barry Nalebuff, scholar and consultants, have developed a five-part
business strategy that shows how to do more that play the game of business. It shows how
you can change the game for maximum benefit.
Though often compared to games like chess and poker, business is different. To win at
chess or poker, someone has to lose. In business, long-term profitability doesn’t
require others to fail. And in business, people are free to change the rules, the players,
the boundaries, the game itself. Intel, Nintendo, American Express, NutraSweet, and
American Airlines, and dozens of other companies have been using the strategies of
co-opetition not only to win but to make it possible for their industry as a whole to
grow. By telling the stories of companies, and formulating strategies based on the science
of game theory, Brandenburger and Nalebuff created a book that’s insightful and
instructive for managers eager to move their companies into a new mindset.
Co-opetition will revolutionize the way you play the game of business.
Adam Brandenburger, Professor at the Harvard Business School, is the author of many of
Harvard’s best-selling strategy cases. He has worked with Ciba-Geigy, Fidelity,
Honeywell, KPMG Peat Marwick, Merck, and Xerox. Barry Nalebuff, the Milton Steinbach
Professor at Yale School of Management, is coauthor of Thinking Strategically (with
Avinash Dixit). He has consulted to American Express, Bell Atlantic, Citibank, Corning,
IC-O, Merck, McKinsey, Procter & Gamble, and Sallie Mae, and is a principal of the Law
and Economics Consulting Group. Their work has led to over fifty scholarly articles and
has been featured in Forbes, McNeil-Lehrer, and in the Harvard Business Review. They are
pioneers in the practice of applying game htheory to the art of management.
Copyright © 1996, 1997 Amazon.com, Inc.
Send mail to zigsbooks@our-site.net
with questions or comments about this web site.
Copyright © 1997-2004 Z.G. Wiedemann, all rights reserved.
Last modified: October 31, 2004
our CANADIAN FRIENDS should click here