What is game theory? Is it video games? Puzzles? Certainly not!
Game theory in business competition resembles a game with players and strategies to win. If you believe in this game theory, then your success is not solely determined by your actions but also by competitors' chosen strategy.
Occasionally, maintaining your organization's competitiveness does not require active intervention. Instead, it relies on the strategies employed by your competitors. In other words, you may wait for competitors to adopt ineffective strategies, allowing you to sustain the existing strategy. However, it is crucial to realize that the success of your strategy can also be due to competitors not doing anything. It is noteworthy that the outcomes can be different when competitors respond to your strategy.
This is what is called a game theory. Game theory is crucial in disruptive competition. The fiercer the competition, the more exciting the game. The game theory requires you to identify who your competitors are. Let's discuss more about it.
Who is the main actor?
The main actor in game theory is the Challenger. Business operates like politics, where political skills are critical in determining victory. You have to know your competitors thoroughly. Imagine the advantages of understanding your competitors' mindset; such insight can assure your victory in the competition. Do you know who the important people in your competitors are?
There are at least four strategic archetypes: Prospector, Defender, Connector, and Reactor
Defenders emphasize operating efficiently
Prospectors prioritize innovating new products and services for customers
Reactors are often difficult to predict because they consistently create strategic decisions based on the game's situation and conditions
Connectors establish strategic alliances with partners to build a business ecosystem
This scenario is exciting because you, as a Reactor, encounter competitors who are also Reactors, making the game much more dynamic. Predicting the direction of competition will undoubtedly be challenging. When reactors meet reactors, it is like you are doing business at the Emergency Room. All strategic moves flooded the market rapidly and were full of surprises. You must immediately realize that business is politics. Developing political skills is imperative, as is having a multitude of alternatives to anticipate competitors' moves. Failure to anticipate could significantly impact your organization's competitiveness.
Perhaps you are brimming with questions. What happens when the defender encounters the Connector, the defender crosses paths with the Prospector, and the Connector engages with the Prospector? Moreover, what if Prospector versus Prospector, Defender versus Defender, Connector versus Connector? The answer is the game will definitely be thrilling. What exactly are strategic archetypes? Samsung vs. Apple, Facebook vs. Instagram, Unilever vs. P&G, Gojek vs. Grab, Nike vs. Adidas, Toyota vs. Tesla, Amazon vs. Alibaba?
Let's map who you are and who your competitors are. The key is for you and your leaders to agree on the strategic archetype within your organization, simplifying the application of game theory to win in the competition. Another interesting question for you is, Is it possible to use double or triple strategic archetypes to win the game?
Make it a good day!
Greeting transformation
