Co-opetition by Barry J. Nalebuff and Adam Brandenburger — review and summary

Barry Nalebuff and Adam Brandenburger are business school professors who, in 1996, published a framework for business strategy grounded in game theory. The central contribution is the concept of co-opetition: the observation that businesses are sometimes competitors and sometimes cooperators with the same parties, often simultaneously, and that understanding which role is appropriate in which context is a genuine strategic skill.

The value net

The book's structural contribution is the value net: a map of the relationships that determine the value a business creates and captures. The four positions in the value net are customers, suppliers, competitors, and complementors.

Most strategy thinking focuses on the first three. The concept of complementors — companies whose products make your product more valuable — is the book's most original contribution. Intel and Microsoft are the classic example: each makes the other's product more valuable. They are not competitors; they are complementors. But they are also not simple partners; their interests diverge in various ways, and the relationship requires ongoing management.

The insight generalises: many business relationships involve both competitive and cooperative dimensions, and treating them as purely one or the other misses something important. A company that is your competitor for one customer segment may be your complementor in another. A company that competes with you in your home market may be a potential partner in a new geography.

Changed the game

The book's organising concept is that business strategy involves two related tasks: playing the game well, given its current rules, and changing the game to improve your position within it.

Most strategy writing focuses on the first task. Nalebuff and Brandenburger give significant attention to the second. You can change the game by changing the players (who participates), the added values (what each player brings to the table), the rules, the tactics, or the scope.

The scope dimension is particularly interesting: defining what game you are playing is itself a strategic choice. Companies that define their competitive arena narrowly sometimes miss the opportunity to play a larger game in which they have structural advantages.

Limitations

The book is now almost thirty years old. Some of the examples are dated. The framework also works better for analysing strategic situations than for generating specific decisions; it is a diagnostic tool more than a decision procedure.

The game-theory foundations are real but lightly worn in the text. Readers who want to understand the underlying mathematics will need to go elsewhere. What the book provides is an intuition for game-theoretic thinking applied to business, which is valuable even without the formal background.

Who this book is for

Co-opetition is most useful for people who think regularly about competitive dynamics — in business, in professional communities, in industry associations. The value net framework is genuinely useful as a way of mapping a situation you are trying to understand.

It is also useful for anyone who has read game theory and wants to see it applied to business problems rather than stylised academic examples.

Practical reflection prompts:

• Who are your complementors in your current work? Who makes what you do more valuable without directly competing with you?
• Where are you playing a competitive game that could be reframed as a co-operative one, or vice versa?

Bibliographic details

• Authors: Barry J. Nalebuff and Adam Brandenburger
• Published: 1996
• Publisher: Currency Doubleday