Dynamic Competitive Simulation: Wargaming as a Strategic Tool

Drawing on military wargames to simulate battlefield conditions, commercial wargaming simulates a set of business conditions and challenges executives to design successful strategies that are able to evolve with the changing nature of the environment. In a corporate war game, senior managers play their own company, a select group of their competitors and the marketplace. A control team plays all other entities that affect the industry. The game begins with a prepared set of business conditions and, when the whistle blows, anything goes – that is, anything that can happen in the real world, including mergers & acquisitions and natural disasters. When the dust has settled, the authors say, managers look back on these simulations as one of the most challenging and stimulating exercises of their careers. The sessions actually last several days.

To be most effective, war games should include certain specific real world conditions. These include a strongly competitive market, so that players must react to each other’s actions. Another is unpredictability, illustrated by changing technologies and shifts in market demand. A long-term perspective is also required, to show how decisions made now will affect profits later on. One important result that makes wargames supremely worthwhile: managers learn the importance of being absolutely clear in their communications with the market.

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