Slide Competitive Simulations Test the Impact of Alternative Business Choices

WHAT IS A COMPETITIVE SIMULATION?

A competitive war game creates a real-time simulation of an actual business situation.

It is used to anticipate the impact of possible business choices, allowing the test of alternative business strategies at very low cost and no risk.

It helps understanding how a given industry may evolve and what might be the behavior of specific players.

When analysis on its own is not enough to provide answers, war gaming can shed a beneficial light on the range of possibilities to be considered.

War gaming is particularly useful when there is a moderate level of uncertainty in the industry. When the level of uncertainty is higher, scenario planning might be a better alternative.

Contact the Author:

Gilda Sala
gilda.sala@edgeplus.it
APPROACH

WHEN TO USE COMPETITIVE SIMULATIONS

Competitive simulations are a powerful instrument in case of, e.g.:

NEW MARKET ENTRIES
NEW PRODUCT LAUNCHES
NEW COMPETITOR ENTRIES
PRICING CHANGES
TECHNOLOGY CHANGES
MERGERS & ACQUISITIONS
UPCOMING NEGOTIATIONS

BENEFITS OF COMPETITIVE SIMULATIONS

Identify opportunities in an evolving industry
Prepare for competitive reactions
Reach agreement on the most suitable strategy
Increase robustness of strategic plans
Make the best use of competitive intelligence information

Slide "The war game helped us shift our focus from internal to external. We could better see our weaknesses, and also those of our competitors"

APPROACH TO COMPETITIVE SIMULATION INTERVENTIONS

Competitive simulations can be designed and run relatively quickly, with a maximum process length of six weeks.

The approach is structured in 4 key steps, with well-articulated and analytically intense pre-game and post-game phases, that are are essential for the success of the initiative.

Approach to Competitive Simulation Workshops and War Games
1. DEFINE THE SET OF GAMES TO BE PLAYED
  • Determine who should design the game and who should participate, given the game's objectives

  • Define a discrete range of choices to be tested

  • Determine the set of levers to be tested (e.g., prices, contracting, alliances)

  • Translate choices and levers into specific war game simulation runs

  • Specify the needed simulation teams (company, competitors, other stakeholders, e.g. consumers, payers, government, etc.)

2. PREPARE A REALISTIC INDUSTRY MODEL

  • Identify key market trends

  • Run industry SWOT analysis

  • Investigate recent and expected competitor moves

  • Run competitive intelligence on selected key players

  • Collect and formalize the information available and distribute pre-reads to participants

3. RUN THE COMPETITIVE SIMULATION (1-2 DAYS)

  • Team briefing

  • Teams run SWOT,  define strategic options and select key levers

  • 2-3 competitive moves simulation (3-4 hours each) and dynamic challenging

  • Inter-move modeling of market impact

  • Inter-move modeling of players financials

  • Final definition and assessment of available strategic options 

4. DRAW STRATEGIC CONCLUSIONS

  • Summarize workshop learnings

  • Describe strategic options

  • Translate strategies into concrete action plans

Contact us for support on competitive simulation workshops: contacts@edgeplus.it