Wintel: Cooperation and Conflict

Management Science, Vol. 53, No. 4, pp. 584-598, April 2007

Harvard Business School Strategy Unit Working Paper No. 1297286

Posted: 9 Nov 2008  

Ramon Casadesus-Masanell

Harvard University - Strategy Unit

David Yoffie

Harvard University - Strategy Unit

Date Written: April 7, 2007

Abstract

We study competitive interactions between Intel and Microsoft, two producers of complementary products. In a system of complements, like the PC, the value of the final product depends on how the different components work together. This, in turn, depends on the firms' investments in complementary R&D. We ask whether Intel and Microsoft will want to cooperate and make the final product as valuable as possible. Contrary to the popular view that two tight complements will generally have well aligned incentives, we demonstrate that natural conflicts emerge over pricing, the timing of new product releases, and who captures the greatest value at different phases of product generations.

Keywords: complements, business models, competitive dynamics

JEL Classification: C72, D43, K21, L13, L15, M21

Suggested Citation

Casadesus-Masanell, Ramon and Yoffie, David, Wintel: Cooperation and Conflict (April 7, 2007). Management Science, Vol. 53, No. 4, pp. 584-598, April 2007; Harvard Business School Strategy Unit Working Paper No. 1297286. Available at SSRN: https://ssrn.com/abstract=1297286

Ramon Casadesus-Masanell (Contact Author)

Harvard University - Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States
617-496-0176 (Phone)
617-496-5859 (Fax)

HOME PAGE: http://www.people.hbs.edu/rmasanell

David Yoffie

Harvard University - Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States

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