Co-Opetition - Adam M. Brandenburger [135]
1. Some information in the following story is drawn from “Bitter Competition: The Holland Sweetener Company versus NutraSweet,” Harvard Business School Publishing, 9-794-079 to 9-794-085, 1993.
2. Wall Street Journal, May 7, 1987, p. 36.
3. Food & Beverage Marketing, March 1992, p. 36.
4. Pepsi was first to use 100 percent aspartame in its diet beverages and took advantage of its head start over Coke to promote Diet Pepsi against Diet Coke.
5. This comes from Monsanto’s annual report. Even competitors acknowledged NutraSweet’s overwhelming brand recognition. “Alberto-Culver [maker of Sugar Twin Plus] research showed about 95% of sweetener users knew what NutraSweet was, while only 10% were familiar with the generic term aspartame, according to [their product manager] Jeff Clark” (Advertising Age, September 20, 1993).
6. For more details on this event, see Harvard University John F. Kennedy School of Government case “Gainesville Regional Utilities,” written by Jose A. Gomez-Ibanez.
7. Confirmed in telephone conversation.
8. Richmond Times-Dispatch, March 7, 1993, p. E-l.
9. Ibid.
10. “For Craig McCaw, It’s Door-Die Time,” BusinessWeek, December 4, 1989.
11. At the same time, McCaw approached another cellular company, Metromedia, and offered a $1.9-billion bid for its half of the New York cellular license. LIN owned the other half and had a right of first refusal on any sale by Metromedia. Now LIN would either have to pay out $1.9 billion or share the property with McCaw. Either way, BellSouth would find LIN a less attractive prize. McCaw also lobbied Congress to pass legislation limiting cellular purchases by Baby Bells.
12. McCaw paid $26.5 million to LARCC (Los Angeles Radio Common Carrier). This was a joint venture between McCaw and BellSouth which was 85 percent owned by BellSouth. Since McCaw did not get any additional equity for his investment, it was in essence a $22.5-million payment to Bell-South.
13. Instead of ratcheting the fees down to a reasonable level, the courts disallow them entirely.
14. A personal conversation in which the executive asked to remain anonymous.
15. Courts reasoned that securities laws and antitrust laws deal with different issues, have different remedies, and that collusive bidding in corporate takeovers fits more properly under securities law. Courts have felt that if securities law did not preempt antitrust law, antitrust law would de facto preempt securities law. Antitrust laws have more generous remedies (treble damages) and more generous provisions regarding statutes of limitations and attorneys’ fees. If not preempted, they would be used almost exclusively, thereby nullifying the congressional intent in passing special securities laws. For more on this point, see R. Preston McAfee et al., “Collusive Bidding in Hostile Takeovers,” Journal of Economics and Management Studies, Winter 1993, pp. 466–74.
16. Remember Groucho Marx: he didn’t want to join any club that would have him as a member.
17. You can, in principle, think about bringing in an extended family of players—customers to your customers, suppliers to your suppliers, and so on. All the ideas of this chapter apply. However, we don’t think this is the first order of business. If it’s hard bringing in customers, it’s that much harder bringing in customers to your customers. Moreover, the benefits to you are that much more diluted.
18. Some of the information in the following story is drawn from “Harnischfeger Industries: Portal Cranes,” Harvard Business School Publishing, 9-391-130, 1991.
19. Washington Post, May 23, 1995, p. Cl.
20. Health Alliance Alert, May 26, 1995.
21. Business Insurance, May 29, 1995.
22. Charles Blanksteen, managing director of William Mercer, the consulting firm advising the coalition, explained: “We wanted to understand the system behind the decisions that were made” (Business and Health, July 25, 1995).
23. Business and Health, July 1995.
24. And that’s a real problem for brand-name goods. Michael Treacy discussed this issue in a 1995 talk to the Minneapolis Masters Forum.