The Right Game: Use Game Theory to Shape Strategy
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The Right Game: Use Game Theory to Shape Strategy

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The Right Game: Use Game Theory to Shape Strategy The Right Game: Use Game Theory to Shape Strategy Presentation Transcript

  • The Right Game: Use Game Theory to Shape Strategy Adam M. Brandenburger, Barry J. Nalebuff Harvard Business Review, July-August, 1995
  • 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.”
  • 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
  • “ Co-opetition”
    • Businesses must both cooperate to create value, even while competing to divide this value among themselves
  • 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
  • Competition and Cooperation
  • Elements of the Game
    • Players
    • Added Values
      • What each player adds to the value inherent in the total game
    • Rules
    • Tactics (Perceptions)
    • Scope
  • 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.
  • 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.
  • 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
  • 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
  • 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