In brief: It helps companies in highly competitive industries understand the reactions of competitors to changing market conditions and take these into account when developing their strategy.
How do we do this? By using computer simulations, game theory instruments and scenario analyses and by developing market models that depict the relevant industry and enable well-founded decisions to be made. In this we cover the full range from competitive intelligence via strategy simulation (human and computer-based) up to strategy implementation.
An example: A new competitor enters your market and you have to ask the following questions:
- What are the opportunities and threats from this and what implications does the new situation have on our current strategy?
- How do we need to modify our positioning, segmentation and product/market strategy?
- Which price strategy is ideal when faced with the new situation?
- Will investing in expanded capacity pay off in the long-term at the future prices, and which expansion path is ideal in the new market dynamic?
Other examples that require the questions stated above to be considered in detail are the assessment and market introduction of new technologies or the availability of substitutes, changes in demand and buying behaviour, mergers or modified actions by the main competitors or customers, changes in the regulatory environment and general major investments in new capacities. The challenges are usually faced in particular in highly competitive industries with a few dominating market participants such as chemicals, pharmaceutical/health care, energy, transport and raw materials (steel, wood pulp, cement etc.).
The Center for Strategic Business Wargaming (CSBW) is available to support you in such fundamental situations with quantitative analytical methods that we use to develop fact-based, action-oriented management recommendations.