Co-Opetition - Adam M. Brandenburger [131]
When you enter a market with only a small capacity, you run the risk that the incumbent will try to bump you out of the game. Instead, consider what might be called a “sumo” strategy. If you plan to get big, start out big. Build a large plant at the outset. That way, the incumbent isn’t tempted to respond aggressively in an effort to dissuade you from expanding later on.
5. The Larger Game
The most important lesson of this chapter is that every game takes place in a larger context. This is what allows a game’s boundaries to be expanded or simply moved. Even when a player seems to be narrowing the scope of a game, it’s the player’s power in some bigger game that makes this maneuver possible. You may think you know what game you’re playing, but that game is invariably part of a larger one. That’s a good message to end with.
There’s always a LARGER game.
9. Being Ready for Change
You now have all the tools you need to apply game theory to business. But, as you’ve probably realized, this is just the beginning. What’s next?
Game theory is a tool to be incorporated into your way of thinking. Plato said that the unexamined life is not worth living. In business, you might say that the unexamined game is not worth playing.
Once you start considering what you’re currently doing from the perspective of game theory, you’ll stop taking many features of your business for granted. You’ll realize you don’t have to accept the game you find yourself in. This realization is itself extremely liberating. It allows you to see beyond the constraints of your immediate situation and frees you to seek the greater rewards that can come from changing the game.
You’ll probably spot some ways to change the game to your benefit almost immediately. Make these changes and you’ll find your efforts to apply game theory amply rewarded. But you’re not done yet.
Changing the game is not something you’ll want to do once and then forget about. It’s best viewed as an ongoing process. No matter how successfully you’ve seized your current opportunities, new ones will appear that can be best utilized by changing the game again. No matter how secure your current position, challenges will arise that can be best met by changing the game further.
After all, other players will be trying to change the game, too. Sometimes their changes will work to your benefit and sometimes not. You may need to respond to these changes by changing the game again. There is no end to the game of changing the game.
A Checklist for Change
To help you become more effective at changing the game, we’ve made up a list of “self-diagnostic” questions. These questions, organized according to the PARTS model, recap much of the material you’ve read in this book.
Players Questions
• Have you written out the Value Net for your organization, taking care to make the list of players as complete as possible?
• What are the opportunities for cooperation and competition in your relationships with your customers and suppliers, competitors and complementors?
• Would you like to change the cast of players? In particular, what new players would you like to bring into the game?
• Who stands to gain if you become a player in a game? Who stands to lose?
Added Values Questions
• What is your added value?
• How can you increase your added value? In particular, can you create loyal customers and suppliers?
• What are the added values of the other players in the game? Is it in your interest to limit their added values?
Rules Questions
• Which rules are helping you? Which are hurting you?
• What new rules would you like to have? In particular, what contracts do you want to write with your customers and suppliers?
• Do you have the power to make these rules? Does someone else have the power to overturn them?
Tactics Questions