A war game represents the simulation of a business situation (including real-world conditions) where different participants play different pre-defined roles in order to test certain assumptions made about the business and the competitive environment, with the overall objective of designing a suitable strategy for the business. The teams involved in this may include customers, regulators and competitors.
In Business Analysis, war games are useful when trying to establish a company’s competitive vulnerabilities.
From a business strategy viewpoint, a war game is a simulation of a business condition, normally involving a group of teams representing a customer or a market, a group of competitors, and a sequence of other entities or factors. These types of competitive scenarios and simulations are useful in exploring the repercussions of strategic changes within an environment that attracts no risks and low costs, more so, for organisations that are facing dire strategic decisions.
Benefits of The War Gaming Technique
The War Gaming technique has different benefits explained as follows:
- It allows the business understand how they and their competitors would react to change and to each other
- It complements traditional approaches to developing company strategy that do not take market dynamics into play
- It allows identifying missing information that is currently not visible in the marketplace
- It creates an improved understanding between teammates and employees in different areas of the business
- It generates insight into how the market may change and helps the business design strategies proactively
- It helps in the identification of potential vulnerabilities of the business.
War gaming is a game in name only and is essentially a methodological discipline that a business analyst in collaboration with the business, can use to test organisational plans to promote:
· Risk identification and mitigation
· Real-time learning opportunities for staff
· The views of various teams
The Stages Of A War Game
The diagram below depicts the different stages of a war game that can be applied to derive the best strategic option.
Through this process, the business is able to define the purported heat maps that assimilates all chief input factors: competitor information, customer behaviour, addressable markets, and products.
Throughout the strategic business war gaming process, a business analyst must be able to adopt a mutual understanding of the strategic position as well as related challenges hence, building a sound foundation for transformational ingenuities.
Key requirements for success include having enough background information on competitors, experienced team members, an experienced facilitator or business analyst & adequate time and support from management as the war gaming sessions may run over a number of days.
The processes described below can be adopted when using a business war game to define strategy:
- Describing the market player team by first identifying the organisation’s main competitors and defining product offerings; considering the competitive dynamics; and assessing the options available
- Establishing a market team that can react towards a competitor’s product strategies and offerings
- Establishing a control team to help structure and monitor the war game and devise external shocks and measures, financials and KPIs, founded on the measurable model established.
This approach will in the end, ensure that enabling activities that enhance the organisation’s capabilities and competitive position are defined as part of the organizational strategy.
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