Co-opetition1 by Adam M. Brandenburger and Barry J. Nalebuff (New York: Doubleday, 1996, 290 pages, $25 hardback; a detailed description of the content is provided on the Internet at http://mayet.som.yale.edu/coopetition)Why Can’ a Game Be More Like a Business? t In this book, Brandenburger and Nalebuff use game theory to develop a set of guidelines that will “make it easier to explain the reasoning behind a proposed strategy.” The games that they use as analogies do not involve sports with their zero-sum outcomes; instead, they consider a variety of games that allow for mutual benefit, as well as harm, for theplayers. They use the term co-opetition, which is consistent with their message that cooperation pays off in some situations, competition in others. They encourage readers to think about not only how to play the game, but also how to change the rules. Examination of these games leads them to make recommendations for managers, many of which are relevant to marketing managers. So, to the extent that agame is like a business, this book should be useful. My aims in reviewing the book are to ask: (1) Is it new? (2) Is it useful? and (3) Is it supported? The book has flaws, particularly in the area of supporting evidence, but it is an important book. What’ New: Old Wine in New Bottles? s According to the Nobel prize – winning economist Kenneth Arrow, Brandenburger and Nalebuff (B&N hereinafter)have produced an exciting new approach to business strategy. Is it new? Although B&N do not discuss the history or development of their ideas, I recognized most of them. When they discuss strategies for negotiated pricing, I found some are covered in Nagle (1987), often under different names. For example, B&N refer to “discounted value” for a concept that Nagle refers to as the “pricing of bundledproducts.” As a result, it is not clear what is new. They present many things as if they were new insights. By creating new names and clever slogans for strategies (e.g., “E.T.– the Wrong Call), B&N make it difficult to see where the ideas might have originated. It would have been useful to trace the development of ideas so that these ideas can be compared with what we currently know, and existingevidence can be examined. They propose the term complementors to refer to organizations that sell products that enhance the value of another firm’ products. Complementors can collaborate to enhance the value of their products to s customers. Examples are companies that sell computer hardware collaborating with software companies and gas stations linking with fast-food companies. If you are like me,you are probably thinking, “Oh yeah, I knew that.” And in presenting examples, B&N refer to alliances such those that General Motors made with Goodyear tires and Prest-0-Lite headlights in 1913. So though the term complementors is new, the concept is not. Although there has been a substantial increase in relationships among complementors in recent years, I agree with B&;N that managers do notthink enough about potential complementors, how
Helpful suggestions were provided by Wilfred Almadoss, Fred Collopy, Pete Fader, and Brian Wansink. Corrections and improvements were also made using suggestions by Adam Brandenburger and Barry Nalebuff, which is not to imply that they agreed with everything in this review. John Carstens, Jennifer Armstrong, and Dara Yang provided editorialsupport.
they should cooperate, and how to negotiate with them. For example, B&N refer to Citibank’ failure to s think about complementors when it introduced its automatic teller machine in 1977; B&N claim that it was only in 1991 that Citibank finally “woke up” to this possibility. The explicit consideration of complementors is new to me. For almost three decades, I have taught students about the...