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Major Applications of
Competitive War Games2 |
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Strategic Planning: at the corporate,
business unit's, or functional level
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Testing Strategic Initiatives: introduction of new technology/product/service; geographical
expansion;
mergers/acquisitions
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Testing Tactical Initiatives: marketing/promotional campaigns
("competitor response modeling")
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Major Benefits of
Competitive War Games2 |
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Components of a
Competitive War Game2 |
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Collection and study of information about competitors in the industry
by the competing teams
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Analytical frameworks
for analyzing the industry, the competitors and for identifying
your and competitors' blindspots
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Analytical battle between the teams (similar to a chess game)
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Development of industry-wide scenarios - from worst through most
likely to best -
based on competitors' planned and anticipated moves and the
your countermoves
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Formulation of action recommendations following the industry-wide
scenarios
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Start with Seeking Answers to the Four Questions1 |
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Is your competition satisfied with its current
position?
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What will your competition do to improve its
market position?
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Where and when is your competition most
defenseless?
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What moves on your part will likely prompt
competitive retaliation?
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The Art of War
Excerpts
from the "Art of War", Sun Tzu, app. 500 BC |
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Going to War
Planning
(more)
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Warfare is one thing. It is a philosophy of deception.
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When you are ready, you try to appear incapacitated.
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When active, you pretend inactivity.
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When you are close to the enemy, you appear distant.
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When far away, pretend you are near.
Planning an
Attack (more)
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If you outnumber the enemy ten to one, surround them.
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If you outnumber them five to one, attack them.
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If you outnumber them two to one, divide them.
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If you are equal, then find an advantageous battle.
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If you are fewer, defend against them.
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If you are much weaker, evade them.
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Small forces are not powerful. However, large forces cannot catch
them.
Types of Terrain
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You don't know the local mountains, forests, hills and marshes? Then you
cannot march the army. You don't have local guides? You won't get any of the
benefits of the terrain.
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Doing the right things at the start of war is like approaching a woman. Your
enemy's men must open the door. After that, you should act like a streaking
rabbit. The enemy will be unable to catch you.
Adaptability
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You can deter your potential enemy by using his weaknesses against him.
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You can keep your enemy's army busy by giving it work to do.
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You can rush your enemy by offering him an advantageous position.
Weakness
and Strength (more)
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Be skilled in attacking - give the enemy no idea where to defend. Be
skillful in your defense - give the enemy no idea of where to attack.
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Make war without a standard approach. Manage your military position like
water. Water takes every shape. If you follow the enemy's shifts and
changes, you can always win. We call this shadowing.
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Fight five different campaigns without a firm rule for victory. Use all four
seasons without a consistent position. Your timing must be sudden. A few
weeks determine your failure or success.
Armed Conflict
(more)
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Divide your troops to plunder villages. When on open ground,
dividing is an advantage.
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Don't worry about organization: just move.
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Be the first to find a new route that leads directly to a
winning plan.
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This is how you are successful at armed conflict.
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Why War Games?
The immediate
goal of a competitive war game is to gain a better understanding of the
total competitive arena, and anticipate competitive developments and moves
in your industry. The war game is an effective tool for uncovering hidden
weaknesses -
your own and those of your competitors.
This
understanding will help you formulate best-course action options.
Competitive war games will also help you shift managerial focus from
internal to external, and lay a foundation of an early warning process.
Game Theory
Game theory is
most beneficial in obtaining insights into the way players in a market
interact in specific circumstances. Such an approach can not only help
participants learn the right way to play but to understand competitor
behavior and what is likely to happen if they alter the rules. Game theory
has greatly expanded the scope of analysis for business strategy, sharpening
corporate competitiveness and advancing policy...More
War Games & Corporate Strategy Development
Competitive war games can help you simulate the
competitive environment, uncover hidden vulnerabilities, and make critical
changes that produce a more complete and effective
competitive corporate
strategy.
While preparing your
strategic plan,
your need to consider competitors' moves as well as competitors' reactions
to your own moves before committing to a specific strategy.
Apply collective intelligence to identify
weaknesses with the goal of taking corrective action that will fortify your
competitive position.
Who Should Participate in a Competitive War
Game?
For a war game
to be effective, the composition of the teams should be carefully selected.
Each team should be headed by a senior executive and include middle and
junior managers as well as front-line staff. Team should be cross-functional
unless the war game is done with one functional area such as marketing or
R&D. The senior executive leadership of the teams is critical as it will
ensure success of the war game beyond the "event". Ideally, the CEO or an
external advisor should serve as the ultimate "referee".
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