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[CDPS] G2 - (CO) Chapter 4- Players Member: Sunny / Cindy / M.J / Phoebe…
[CDPS] G2 - (CO) Chapter 4- Players
Member: Sunny / Cindy / M.J / Phoebe / Ian
1.Becoming a player
if you want to play,
you have to pay...
:diamond_shape_with_a_dot_inside:case:
Norfolk Southern
Competition is too valuable & too costly to give away
:point_right::skin-tone-3:"
you need to get paid to play
"
Norfolk Southern should have required a fee
BellSouth
After entering the game
it would be a bidding war
asked for a consolation prize
"even if you can't make money in the game, you can get paid to change it "
Holland Sweetener
:point_down::skin-tone-6:Competitors
Before
entering
the game
NutraSweet→
added value
was huge:!:
After
entering
the game
NutraSweet→added value reduced ↘
( :check: brand quality & manufacturing cost advantage)
worth a lot to Coke & Pepsi
the pie wouldn't be bigger / just divided up differently
Holland Sweetener→"
Pay me to Play
"
"
Pay me to Play
" the phone rings
:star:How important is it to the customer that you bid ?
if important :arrow_right: get COMPENSATED for playing the game
if it's NOT :arrow_right: reconsider bidding...
Bringing in other players
Customers
Make the pie bigger
How?
Pay them to play
Subsidize some customers
Educate the market
Become your own customers
Cases
Competitor
Kranco
Strategy
Ideal
Find more buyers
Educate the wood yards (market)
:female-teacher:
"win-win"
Actually
Price war :moneybag:
"win-lose"
Portal cranes :building_construction:
Proshare
paying or subsidizing customers to buy
More customers :silhouettes:
More advertisers :newspaper:
More values :arrow_up:
Nightclub
America Online
Newspapers
Boeing
Become your own customers
Car rental agencies :car:
Automakers
Suppliers
How?
Pay them to play
Form a buying condition
Become your own supplier
Formed a buying coalition to purchase the HMO component of their employee health-care benefit
Health-care providers bid more aggressively
Extremely powerful position :red_flag:
Share the cost of evaluating the hundred or so different offers
Complementors
(1)Buying coalition (Added value ➕)
Bigger than your customers
MacBains + La Centrale
Auto Insurance Companies
(USAA & AAA)
Attract more complementors & reduce prices
Chicken and egg at the same time situations
(2)Cheap Complements
3DO Company
( profit- license & royalty fee)
Sales aren't good as they expected
Cracking Chicken & Egg problem
Hardware
Software
Lesson- don't rely on other players too much
(3) Do it yourself
(becoming your own complementor)
Develop two complementory markets
(Do it on one's own✅)
Intel➡️ ProShare
People ❌ ➡️ a complements business
People❌playing complements game on another account
Competitors
Advancement comes from competition
Ideal situation
Enjoy the benefit from competition without give away the store
P&G
Encourage competition across brands from subsidiaries
Competition keeps everyone on their toes
Customers' perspective
It's risky with only one supplier
Capacity
Quality
The lower bargaining power
Most of the time
Eliminate competitors
Create demand
The size of market is limited(The pie is fixed)
Ensure your competition is valuable
:check: 7 ways to get
paid to pay
Deal with someone who will appreciate what you bring to the table
Ask to bid other pieces of business
Better access to information
Ask the customers to quote a price they prefer
Last-look provision
Guaranteed sales contract
Contribute the bidding expense , other costs of entering the game
:check: 8 hidden costs of bidding
4.Existing customers want a better deal
New customers will use the low price as a benchmark
Incumbent can retaliate
:black_flag: Lose-Lose
competitors also lower the price
Beware of the winning business
:red_cross: Low price , Evaluate the customers
It doesn't help to give your customers' competitors a better position
Better uses of your time
Let your current customers satisfied
Don't destroy your competitors glass houses
Changing the players
Assess your add value
High
Participate the game ➡️ Earn money
Low
Changing the game
Who will gain profit from your entry :question:
:red_cross: Cannot get paid
Sitting on the sidelines
:check: Get paid
Participate the game
(:star:Create the right incentives)
CSX
Competitors
:point_left:
Customers:
Gainesville
Complementors
Suppliers
Customers:
Coke / Peps
NutraSweet
Complementors
Suppliers
:smiley:Remind customers of your well track record
:hand: Let them go
