So If both don't advertise they make 5 million each.

If one of them, Sensodyne, advertises, they get 5 1/2 million.

If Colgate does not advertise in that case, they get 2 million.

And of course, the other way around, the same, okay?

So, having taken this situation, some form of advertising, two firms, some sort

of market profits and so on, we were able to structure this in a form of a matrix.

And what's important is basically what we mean by a strategy.

Right so after all you are taking this course to learn about competitive

strategy and for that, we need to have a working definition

for this course. And the working definition for now is, a

strategy is a player's plan of action in a game.

Okay, so here it's fairly simple we have 2 choices, we have to run an ad campaign

or not to run an ad campaign. For now this sounds very simple even

trivial but it's going to be very useful later on

to know what a strategy is when we're trying to analyze more complex

situations. So in this video we've learned the basic

tools of game theory. We've learned how to use game theory to

analyze a competitive problem like the one we've seen, in a structured way.