This article examines how business wargaming can benefit business managers with strategy-making in comparison t0 using computer-based simulations and scenario planning. The author, Jan Oliver Schwarz, finds that business wargaming helps facilitate an ex ante evaluation of strategy; which he describes as the act of testing strategies prior to their implementation. Schwarz defines business wargaming as a "dynamic strategic simulation". The main difference, as described in this article, between business wargaming and scenario planning is that business wargaming focuses on the views of competitors, whereas it is difficult to incorporate competitor views in a scenario exercise. In regards to computer-based simulations, Schwarz states that these simulations represent the perspective of the analyst that created them. This contrasts from business wargaming, as Schwarz explains, because business wargaming may include computer-based simulations, but it is driven by its participants and not by the model of the simulation.
Before explaining the business wargaming process and its advantages, Schwarz highlights the important steps in the strategy-planning process. According to Schwarz, planning a strategy within a business begins with setting objectives, an analysis of the company and its environment, creating a set of strategic options, and then developing strategic plans from the proposed strategic options. Business wargaming allows for this, as it utilizes the participation of an industry's competitors, clients, market experts, and wargaming experts. The business wargaming process begins in the present and is based on available data retrieved from extensive research on the industry in which the business takes place. The client team, which consists of the business manager's role, must create and adjust its strategies according to the decisions made by the stakeholder and customer teams. A diagram of the business wargaming process is illustrated below in Figure 1. Following the completion of the process, the managers of the client company and the wargaming experts carry out an analysis of the exercise and discuss their findings.
Schwarz explains that managers can benefit from using business wargaming because it allows them to actively participate in developing a strategy that is future-oriented. This is crucial for an ex ante evaluation of strategy. Business wargaming also allows the managers to experience the consequences of their strategies, and in turn allows them to identify the early signals of change that pertain to their industry. In Figure 2, Schwarz provides a chart of these advantages, which he pulls from previous research and literature, to portray how business wargaming is a useful form of ex ante strategy evaluation.
Source
Schwarz, J.O. (2011). Ex ante strategy evaluation: The case for business wargaming. Emerald Group Publishing Limited, 12(3), 122-135. Retrieved from: https://www.researchgate.net/profile/Jan_Oliver_Schwarz/publication/254191296_Ex_ante_strategy_evaluation_The_case_for_business_wargaming/links/53dca7430cf2cfac992909ff.pdf
Posts
