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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. 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. NalebuffHarvard Business Review, July-August, 1995

  2. The Right Game: Use Game Theory to Shape StrategyAdam M. Brandenburger, Barry J. NalebuffHarvard 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?

  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?

  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 • Free agency in sports

  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

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