Book Review: “Co-opetition” by Adam Brandenburger and Barry J. Nalebuff

Co-Opetition-a revolutionary mindset that combines competition and cooperation

I rarely come across a book that changes my current business philosophy.  The book I am reviewing today did just that: it changed the way I think about strategy, competition, suppliers, and customers.

Co-opetition” is not your typical strategy book. It’s actually so unique that a new word had to be invented to summarize its core concept: co-opetition.

Co-opetion” is a combination of competition and cooperation, a duality that helps a business grow and prosper.

We tend to look at our competitors as our enemies. We can only grow at the expense of a competitor. In order for our brand to win, a competitor has to loose.

The marketplace is a war, and only the fittest survive.

This book will challenge the way you view competition by introducing a new concept: co-opetition. That is, seeing the role of competition also as a partner in creating value, a bigger pie. A bigger market increases your brand’s profits, even at the same market share.er slice.

Co-opetition

“Business is cooperation when it comes to creating a pie and competition when it comes to dividing it up.”

Think about it. It’s hard to steal market share from your competitors in particular in matured economies. Why not work with them to grow the market and benefit for a bigger slice of the pie.

The same concept can be applied in the relationship with your suppliers and customers.

“You have to listen to your customers, work with suppliers, create teams, establish strategic partnerships-even with competitors. Besides, there are a few victors when business is conducted as war. The typical result of a price war is surrendered profits all around.”

The book introduces another concept: the complementor. According to the authors,

“The complementor is the opposite of a competitor. It’s someone who makes your products and services more, rather then less, valuable…Hardware needs software, and the internet needs high-speed phone lines.”

A lot of real world examples are used to illustrate how complementors can work together for the common good: Microsoft and Intel, car manufactures and auto insurance, Compaq and ProShare.

This revolutionary strategic approach to running a business is based on the game theory.

Game Theory

Game theory was first formulated by John von Neumann and economist Oskar Morgenstern in their book “Theory of Games and Economic Behaviour”, published in 1944. In recent days this theory came to revolutionize the game of doing business.

“Contemporary game theory applies just as well to positive-sum-or win-win-games. The real value of game theory for business comes when the full theory is put into practice: when game theory is applied to the interplay between competition and cooperation.”

The books goes on and describes the components of the game theory strategy as it applies to the business world: players, added values, rules, tactics and scope (PARTS).

It also looks at a company value net, a diagram that identifies all its players and the interconnection between them: customers, competitors, suppliers, and complementors.

The Value Net

I hope this review peaked your interested for this book. “Co-opetition” is beneficial to business owners, senior managers, marketers and others involved in running and growing a business.

A New York Times and Business Week bestseller, it definitively gave my strategic thinking a new perspective, by making me see the “big picture” differently.

Make sure to check the “Best Marketing Books” page for more book recommendations and reviews.

Comments

  1. Emily, thanks for you comment. Your article is indeed a perfect illustration of the concept presented by the book.

  2. An interesting article and an interesting concept. Actually, the medical and pharma companies have been pursuing this idea – very successfully – for some time. You might be interested in a blog I wrote on the subject: Creating a Channel Ecosystem (http://www.colemanmgt.com/channel-ecosystem/ It’s a very good example of what the authors are talking about.

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