“Business is war.” the traditional language of business certainly makes it sound that way: winning the competition, getting market share, beating up suppliers, locking up customers. There are the victors and the losers.
But today in doing business, you have to listen to customers, work with suppliers, keep good relations—even with competitors. That does not sound like war. Besides, there are few victors when business is looked upon as war.
Most businesses succeed only if others also succeed. Business is competition and cooperation as well. In other words, business is war and peace.
To bring together competition and cooperation, we turn to game theory. Game theory provides that whether one person wins or loses depends on what other people do. It is particularly effective when there are many interdependent factors and no decision can be made in isolation from other decisions.
Game theory breaks down the game into key elements: players, added values, rules, tactics, and scope (PARTS). Every element affects the result of the game. This means that each of the five elements gives you a way to change an existing game into an entirely new one. Change on of the PARTS, and you change the whole.