In situations where the cost of being wrong is high, war games can be very helpful to understand from a 360-degree perspective the external opportunities and challenges of all the key stakeholders in the industry.
[3] The benefit of teams role playing competitors and developing more robust strategies is especially notable, and can be inferred from a quote such as the one below from Richard Clark, CEO of Merck and Co., who in an interview to USA Today said: "I am a strong believer in if you’re going to develop a vision or a strategic plan for the future of a company that you have to engage the organization in doing that…it can’t be just the CEO or top 10 executives sitting in a sterile conference room.
Not surprisingly these games come with a high price tag, and are advocated by large consulting firms which tend to work with the US military establishment.
Participants input numerical values for decisions on a wide range of business investments (in production, sales force, advertising, etc.
Another variant on BIG involves large numbers of simulations to explore the interaction of multiple competitors' strategies, without assuming an equilibrium or a mathematical solution exists.
Similarly, BIB criticizes "Business is Game" thinking on the ground that hypothetical or generic moves are irrelevant or trivial, stable solutions are not a substitute for specific, real life practical and innovative strategies for management, and computer/mathematical simulations do not approach the complexity of competitive dynamics in real markets.
The goal of BIB is predicting most likely moves by most significant competitors or other third parties (customers, regulators) so that strategy can be pressure–tested in the most realistic setting.
This approach, used by Mark Chussil, founder of Advanced Competitive Strategies, uses simulations to estimate the likely outcomes from moves made by a business, its competitors, and other relevant actors, across multiple scenarios.
Yet another BIB variation involves large numbers of what-if simulations, in which the war game is designed by humans and conducted in a computer.
[19] A leading proponent and provider of these types of War Games is Outcome Simulations ApS[20] led by Soren Malmborg.
Corporate games are played over major portfolio decisions such as diversification and/or divestiture moves of the parent company (i.e., which acquisitions to go for, which business to get rid of), and over longer-term horizons.
BIB games have been applied with great success to new product launches, offensive and defensive moves against specific competitors (whose response is analyzed using the advanced competitor analysis techniques), in organizational development's (training the next generation executive cadre) "competitive landscape" games, and in brand revival and new market entry situations.
According to participants, BIB games provide touch reality-based challenge to strategies and plans that helps companies cope with uncertainty.
[29] The methodological superiority of BIB games over other techniques received strong empirical support from a meta study on the effectiveness of predictions of competitive outcomes using "role playing".
[38] At the Paul Merage School of Business at University of California, Irvine the final exam for the competitive intelligence class developed by Dr Leonard Lane and Arjan Singh is a war game in which the students role play various companies to try to win in the marketplace.
Each year student teams have developed strategies - some of which have actually happened in the market place indicating that a war game is a very powerful predictive tool for business when planned properly.
[41][42][43] Some companies play up the war metaphor simply to encourage out-of-the-box thinking,[44] while others downplay it with terms such as "strategy game."