With friends like these - The art of managing complementors

Intel and Microsoft neither buy from nor sell to each other directly, but they are, undeniably in business together. They are probably the world's most,widely known pair of complementors - companies that independently provide complementary products or services to Complementors increase the value of each other's offerings and the size of the total, market. So it's not surprising that so many just assume that their interests are aligned. Nothing could be further form the truth. Discord can develop in many areas, such as pricing, technology, standards and control of the market - both in terms of which company has the most influence over cus tomers and which one gets the biggest slice of the,pie. The issue,of pricing perfectly, captures this tension. Ideally, you'd like to price your goods high while your complementors price theirs low. Airlines, for instance, would be happy to see vacation lodgings go for a song, while destination resorts could raise rates and still fill their rooms if customers could fly there for free. The first step in managing relationships with complementors is to develop a deep understanding of their economies, their strategies and goals, their existing capabilities, their incentives for cooperation, and any potential areas of conflict. Then, to gain the upper hand, companies can use a vari ety of tools that fall into two main categories: hard power (inducements or coercion to get what you want) and soft power (per suasion through indirect means to get others to want what you want). The authors explain how to build both,hard power and soft, illustrate the,strength's and limits of each, and offer guidelines for choosing one over the other. Conflict among complementors is inevitable, but together, hard and soft power can help companies manage the dark side of complementor relationships and take full advantage of the opportunities that cooperation should create..