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Co Opetition

Co Opetition

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Published by: Kris on Nov 07, 2008
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1. A revolutionary mindset that combinescompetition and cooperation2. The Game Theory Strategy that’schanging the game of business
ByAdam Brandenburger and Barry Nalebuff
Published By Doubleday, 1997ISBN 0385479506290 pagesBusinesssummaries.com is a business book summaries service. Every week, itsends out to subscribers a 9- to 12-page summary of a best-selling businessbook chosen from among the hundreds of books printed out in the United States.For more information, please go tohttp://www.bizsum.com.
Co-opetition Page 2
2001, 2002 Copyright BusinessSummaries.com
The Big Idea
Co-opetition combines the advantages of both competition and cooperation into anew and dynamic framework to generate more profit and turn things in your favorby changing the business environment that directly affects your company.
Part 1
How does one go about changing the game of business?
Change the elements: from players, to added values, rules, tactics, andscope.
Remember, nothing is ever set in stone. Take advantage of change andbe a quick and agile company that moves and responds as needed.
Business strategy and the concept of co-opetition is designed to provide aframework by which companies can gain sustainable competitiveadvantage by changing the game to their own advantage.
When companies work together they create a larger and more valuablemarket than they could by working individually.
The objective is to maximize your return on investment regardless of howother companies perform.To change the game of business, you have to alter one or more of these basicelements:PlayersBy changing the mix of competitors or complementors for your company. Acomplementor is a provider of products or services that add value to whateveryou are offering. For example a computer hardware company and a softwarecompany are complementors. Their products are worth more when combined.Added ValuesThe company that holds the most value to the value net holds the power. Changethe added value of the various players and you change the game itself.RulesIn business, the rules are negotiable.TacticsAlter the player’s perceptions, and you change the outcome of the game.Perceptions are shaped by tactics.Scope
Co-opetition Page 3
2001, 2002 Copyright BusinessSummaries.com
Understand how other commercial games influence yours, and take advantage ofany implicit boundaries other parties are using to improve your own competitiveposition.“You have to be able to compete and cooperate at the same time”. –Ray Noorda,Novell founder“You don’t have to blow out the other fellow’s light to let your own shine.”-Bernard Baruch
Part 2
“If you don’t have a really tough competitor, you ought to invent one.”-Bill Smithburg, CEO, Quaker OatsPlayersThe Value Net is composed of customers, suppliers, competitors,complementors, and your company. Before you enter any new value net, stopand ask yourself “Which of the current participants in this value net has the mostto gain by my participation?” Get that player to pay for your participation.To increase the number of customers in the value net, companies must worktogether or individually to:
Educate the market about product benefits
Be prepared to lose money on early customers in order to build marketmomentum.
Subsidize customers who buy complementory products – the more theybuy from a complementor, the more they also buy of your product.
Become their own customers – by setting up new companies to buy anduse their own products.To increase the competition, customers can:
Offer to subsidize any capital investment required for a new company toenter the industry
Provide a guaranteed sales contract if a new company commits theresources required.
Supply a potential newcomer with a price at which he is prepared to givethem business.
Offer a provision in which a company can match whatever is the best priceoffered by a competitor.To increase the number of complementors, companies can:

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