Game theory teaches you how to "play" Business games

"The mall is like a battlefield." But the way people talk about business today doesn't really feel like that. Business people must listen to their customers, collaborate with suppliers, create teams, and build strategic partnerships (even with competitors).　　It doesn't sound like war anymore. Most businesses succeed only when other businesses succeed. When Microsoft (Microsoft) manufactures more powerful software, the demand for Intel's integrated circuit blocks increases. Microsoft's software will be more valuable only if intel produces faster chips.　　This is common success, not common destruction. When people make pies together, business is cooperation. When everyone is splitting pies, business becomes competition. In other words, business is both war and peace. "You have to compete and collaborate at the same time," says Ray Noorda (Renuda, founder of Norville) network company.　　This combination is more dynamic than the relationship between "competition" and "cooperation". In order to combine competition and cooperation, we use game theory.　　This theory can surpass the simple concept of competition and cooperation, and realize the ideal of "cooperative competition", which is more suitable for today's society. Game theory divides the game into several main components: the players, the added value, the rules of the game, the tactics and the scope of the game (these factors are referred to as parts).　　Parts is the way to know the inside of the game. Every factor in the game is a tool to change the game, that is to say, either of these five factors provides a way to turn the existing game into a completely new game.　　Changing any one of the parts changes the whole game. Why change the game? There is a saying in China: Sow and reap. Sometimes it's true, sometimes it's not. You may play a good game, but the result is still bad. This is because you play the wrong game. You have to change it. Even good games can get better.　　The real success lies in actively shaping the game in which you play, by creating your own desired game rather than passively accepting it. Players: Find out if business is a game, then who is the player?　　What about their role? The players are divided into four categories: customers, suppliers, competitors and assistants.　　The following diagram of the Nintendo value Net depicts the interaction of all players and their relationships. The vertical direction in this figure is the customer and the supplier, the horizontal direction is the competitor and the assistant. If a customer has a product from another company that is more valued by your company than when they own the product, the company is your company's assistant. For example, if you have mustard, people prefer hot dogs to mustard, and vice versa.　　The way to find a provider is to look at the customer's point of view and ask yourself: what other products will increase the value of my product in their minds? The opposite is true of competitors: If a customer owns a companyProducts that are not as important to your company as they are to own your products, the company is your competitor. Coca-Cola (COLA) and Pepsi (Pepsi Cola) are examples of classic rivals. For example, if you have just finished a bottle of Coca-Cola, you will not like Pepsi, unless you are thirsty. Coca-Cola will not add life to Pepsi.　　The right way to find a competitor is to put yourself in the position of the customer, and what other products will reduce the value of my products in their minds? The value network reveals two basic symmetrical relationships in business games. In the vertical direction, the customer and the supplier correspond to each other; in the horizontal direction, the competitor and the assistant also echo each other.　　In the process of creating value, they are equal in status. In a labor negotiation, the director of the Personnel relations Department shouted: "I have to make it clear to the staff that the customer is the first." But after looking at the value net, he changed his mind and began to do more constructive talks. In the end, everyone realizes the common goal: to create one of the biggest pies. No one is the first to achieve this goal. If a customer has certain special requirements, such as express delivery, but does not want to pay enough to make up for workers to lose the joy of spending the weekend with their families, meeting this demand will not add value, in fact, will only destroy value.　　Customers are not always right, employees also have rights. Often, the same player has multiple roles on the value net. Business strategy expert Gary Hamel (Hammer) and C. K. Prahalad (Plahrad) in "The Future" (competing for the Future), see Sinorama's November 1994 cover topic, for example: "In any day, the United States Telephone and Telegraph Company (AT & T) may regard Motorola as its own supplier, buyer, competitor or partner. [Page] Value added: A piece of pie to know who in the game the key to the greatest power is the concept of "added value". Added value measures what each player brings into the game. Let's see how big the pie is when you and all the players are involved in the game, and see how big a pie other players can make when you're not in.　　The difference is your added value. It's hard to get more of the added value from the game than your own.　　Intuitively, what you can take away from the game is limited by what you bring to the game, and what you bring is your added value. If you don't have a competitor, your added value is guaranteed. The strategy at this point is that there is no need to limit the value added of other players and how to do it. Nintendo has dominated the 8-bit gaming market by building a "circle of effectiveness". For a while, the threat from rivals cannot be any longer. But other players in the Nintendo value net still have a piece. At this point, Nintendo's strategy is to limit the value added of these players (See "Power Game" diagram). Most of the time, there are a lot of competitors. The challenge at the moment is how to build your own added value. Building added value is a big play in the basic business. Companies are either doing everything they can to improve quality in slow-growing costs, such as the US Global Airlines (TWA) Comfort module, or reduce costs without too much quality.　　Better than this clever trade-off is to find what we call "interoperability", that is, improving quality and reducing costs. Competitors do the same. They also tried to make similar smart choices or to use each other. This mechanism will reduce the added value of your business. In order to protect their own value-added, enterprises need to establish relationships with customers and suppliers. This relationship ensures the uniqueness of the product, and part of the product is the enterprise itself. The AAdvantage of American Airlines (Anglo Airlines) is a model for establishing this relationship.　　This activity creates loyalty through rewards. Rules of the game: the details are critical when it comes to changing the game, people immediately think about changing the rules of the game. But it is often nerve-racking to decide which rules to change and how to change them.　　After all, most of the rules that businessmen follow are deep-rooted laws and practices. But some other rules can make a reasonable change. Many of these rules are contained in the contract. Contracts with customers and suppliers will deeply affect the transactions with these players. A mere provision can tilt the balance of power towards the advantage or disadvantage of the enterprise. These contracts, while shaping the relationship between the enterprise and the customer and supplier, also shaped the relationship between the enterprise and the competitor.　　To ensure that the game in which the enterprise participates is profitable, it is important to ensure that the contract contains appropriate rules. Changes in rules can dramatically change the outcome of a game compared to changes in the player or added value.　　In other words, once the business rules are involved, the details are everything. There are no fixed procedures for making new rules. This is creative behavior. But the new rules can still be inspired from some places.　　One way to do this is to look for rules that are valid in some cases and see if they are still valid in different situations. Freedom to change the rule is a double-edged sword. Do not blindly follow the rules of others, but also do not expect others to blindly follow your rules. Just as you can change the rules or make new rules, others can do the same. [Page] Tactics: Cognition is the fog of all business games, so in any game, cognition is an essential element. Cognition can drive behavior, whether accurate or not.　　Understanding and building competitors ' perceptions is also an important part of business strategy. The establishment of people's cognition is a "tactical" category. Tactics are the actions the players take to build the awareness of the other players.　　Some tactics are to pull out the fog, some to keep the fog, and some to create new fog. In 1990, Sensor (Editor: Xin ze) shaving system is a creativeNew。 The problem with Gillette (Gillette) was how to get customers to endorse the fact.　　What does a customer believe in a word? To pull out the fog, Gillette launched a highly tasteful and shocking advertising campaign. The advertisement praised the technical advantage of the Xin Ze shaving system. But more importantly, this activity has instilled in people the idea that "it must have cost a fortune to launch the product." They must be sure that the product will succeed. I should try it. "The consumer's idea is right. Gillette has spent 100 million of dollars to launch the product. It will never do this unless it is convinced that people will switch to this shaver after they have tried the Hsin-ze shaving system. Gillette's judgment is also correct: people like Xin Ze Razor.　　The company's global razor-blade sales have risen 70%. In a sense, everything is a tactic. Anything you do or don't do is a signal. These signals form a perception of the game. And most people's collective perception of the game becomes the game itself.　　Only in consideration of people's cognition, can we really understand what kind of game we are involved in, and master the control of changing the game. Game scope: Vast expanse, all by link any game is not an island. Even so, people divide the world into many separate games. An easy mistake to make is to analyze these discrete games in isolation and imagine that there are no bigger games. The problem is that this hypothetical line does not exist. Every game is connected to other games.　　A local game can affect other places of the game, today's game will affect tomorrow's game. Any two games, even a separate, climate-playing game, are just a part of the big game. By definition, this mysterious huge game has no boundaries, no fixed scope. Therefore, the players, added value, game rules and tactics of these 4 elements, namely parts, constitute the mystery of the big game of all factors.　　As a result, parts is also a way to classify the links between games. First, the players. Any time you have a gamer in your game and another game player, these two games are likely to be connected. This dual player can be anyone in the value net.　　To determine whether the two games are connected, you must review the other factors in the parts. If a customer or supplier is involved in more than one market, there will be a value-added link. Ford Motor Company, which is aware of the link, decided to take part in the credit game. Ford Motor Credit has improved Ford's added value in car sales games. In addition, the rules of the game limit the behavior of the players, and these restrictions can be separated by the game together. For example, the most favoured customer terms do not allow the seller to conduct two separate negotiations with the customerAs a separate game. Finally, two games are linked only because some people think they are connected. So, by changing perceptions, tactics can change the link between games.　　For example, threats and precedents are tactics that work by establishing links between games. From the point of view of competition and cooperation, we can see that business relationship is far from unitary. Thus, this relationship sometimes sounds contradictory. But that is one of the reasons why collaborative competition has become such a powerful way of thinking. It is optimistic but not naïve. It encourages bold behavior and helps you avoid traps.　　It encourages you to take a friendly attitude towards other players while at the same time making you indomitable and keep a clear mind. Collaborative competition reveals the path to new opportunities and thus inspires creativity. It emphasizes changing the game and pushing the business forward. It tries to make pies bigger, making businesses more profitable and more personal. It challenges the status quo and points out that everything can be done in a different way and better.