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JPK
Gro
up2016 Product Intelligence & Innovation Summit
September 21-22 • Chicago, IL
Competitive Wargaming andSimulations Workshop
Develop situational awareness of competitive position
September 21, 9:45am
As Chief Executive Officer of Aurora WDC, Mr. Johnson spends most of his timeguiding the overall strategy of the business and directing the firm’s external
consulting opportunities with clients. Prior to this promotion in March 2010, heserved the prior seven years as Chief Operating Officer and Director of Researchwith the firm. Prior to joining Aurora in 2003, Mr. Johnson was in the Investment
Management industry as an account and portfolio manager. He serves asWisconsin’s SCIP chapter chair, was Program Chair of the 2009 SCIP
International Conference, and is a SCIP Catalyst Award recipient.
View presentation online at:www.jpkgroupsummits.com/attendee6
Derek Johnson – Aurora WDC
1
Welcome to JPK Chicago
Competitive Wargaming & Simulations Workshop
September 21, 2016
2
WELCOME!!!
3
First Things First…
– Human instinct in business to be very competitive (“strong desire to win”).
– Like airline pilots learning in the sim, business leaders can often learn in the
sim (“something that is made to look, feel, or behave like something else”).
– Simulated learnings (good, bad or ugly) are generally a LOT LESS
EXPENSIVE than they are in the real world!
4
Agenda (9:45 to 12:00)
• Overview & Basics
In the real world, most competitive issues are usually focused on tactical and operational problems or
responses to emerging competitive threats rather than “grand strategy” initiatives that require external
support and guidance to make actionable. This is why the hottest trend in business wargaming today is
“skilling up” teams of internal facilitators with the ability to take on tactician support roles for exercises
attacking the following seven (7) business problems:
1. Product Extensions and New Feature Design
2. New Market or Segment Entry with Existing Products and Services
3. Reacting to New Competitors with Asymmetric Market Power or Resources
4. Anticipating Disruptive Threats to your Business Model or Industry Structure
5. New Leadership Changes at Major Incumbent Competitors or your own Company
6. Mergers, Acquisitions and Alliances to Fortify Talent, IP or Product/Feature Development
7. Addressing Shifting Customer Needs/Wants Ahead of Competitor Reactions
• War Game Process: Step-by-Step
• Exercises
5
Derek Johnson, CFA
Aurora WDC
@dljalpha
608-268-3470
• Chief Executive Officer – Aurora WDC
– Promoted to CEO in March 2010
– Chief Operating Officer – Aurora WDC (2008 – 2009)
– Director, Global Research & Analysis (2003 – 2007)
• Practicing Intelligence Since March 2003
– Work closely with 8-person Directors team to shape the ways the firm can best influence and support the external marketplace.
– Pride myself in a completely transparent and protective leadership style, while trying to bring out the best in those around me.
• Other Insights
– Advanced techniques like Wargaming are just not utilized enough or effectively within most Intelligence toolkits.
– Reside in the small Madison, WI suburb of Waunakee with my wife, Allie, three kids (Benji, Sage, and Raine), and two dogs (America and Rooney).
– Hollywood look-a-like: John Malkovich.
About Your Facilitator
6
Let’s Get Started
7
Why do cars have brakes?
8
How you answer that question
reveals a great deal about how you
approach both Risk and Reward.
Why do cars have brakes?
How many answered it this way? Brakes help you SLOW DOWN.
How many answered it this way? Brakes help you GO FASTER.
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9
War Games Support All Planning Levels
Vision, Mission, &
Purpose
The Strategy
Operational Level
Tactical Concerns
α The reasons for which we are in this business
α What we value in the bigger picture
α Which stakeholders are important to us and
why
α How do we plan to satisfy our stakeholders?
α Which goals, markets (scope), and resources?
α What will be our basis for competing?
α Links our strategy and tactics
α Focuses on key market and services positions
α Specific objectives … e.g., sales or market share
α Operationalizing plans at the front lines
α Varies from situation to situation
α Nearest-term targets, how we make money
10
War Games Bring Value!
Shared experience learning and team building
Focus on assumptions and “what ifs”
Tangible deliverables
11
“Aims of the Games”
1Force participants to change perspective on strategic decision-making
Turn known and yet-unknown information into actionable intelligence
2
3
4
Encourage exploration of new strategic plans for a designated time period
Give insight into the future of the business environment
12
Necessary Basics
13
buckdawson.blogspot.com
1. Good presentation skills
2. Not afraid to rattle cages
3. Executive Sponsorship
4. Understanding of Process
(that works for your
organization)
5. Rigor and availability to
conduct the actual
exercise
6. Discipline to develop the
After-Action Report
Necessary Basics
14
Your Role in Defining Purpose and Scope
Provide guidance on what the purpose of the game will be, taking
into account the needs of your Sponsor and other key stakeholders
Come to the Sponsor prepared to answer questions on new
entrants, potential M&A in the relevant market, and a good
understanding of potential disruptors
Limiting the scope will not only reduce your workload prior to the
game, it will create much more focus on the key issues your
Sponsor wants explored
Most importantly – Ensure that the game is designed to deliver
executable strategies and tactics that can be measured
15
What does it Cost?
Site & Catering + Profiles + Travel
+ Opportunity Cost = REAL COST
16
Let’s Break Down The Process
17 17
Define Intelligence Goals & Objectives: - To create a simulation of future competitive behavior
- To anticipate the probabilities and impacts to your business of certain scenarios coming true
- To exercise greater control over ongoing competitive storyboarding
Inputs- Sponsor Commitment
- 20-40 key stakeholders
- Decide on 1-2 day format
- 4-6 week prep calendar
Starting Point
PROCESS
PLANNING
α Pre-Briefing Book
α Market, Competitor Profiles
α Team Assignments
α Logistics Considerations
EXECUTION
α 2 Rounds of Play (generally)
α Probability-Impact Grid
α Intelligence Gaps
α Strategic Lessons Learned
Benefits & Outcomes:- Plan profiles that enable the Sponsors to "sell" the more significant strategic options generated
by the simulation
- Understand how competitors and other market players will react
- Is used to provide that critical link between strategy and tactics.
- Explore and test future competitive strategies in order to discover any weaknesses in a plan and to identify possible consequences of plan adoption
- Probability-Impact Grid (PIG) that allows ongoing risk and opportunity assessment
End Result
AFTER-ACTION
α Competitive Storyboard
α Immediate Action Items
α Strategic Alterations
α What’s Next?
Decision Scope Actors Prep Play Insights
1 2 3 4 5 6
2
3 4 5 6
6
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Planning Horizon Considerations
Outline scope and objectives
Secure team buy-in, budget
Prepare RFPs, vendor selection and POs
Secure meeting facility and food service
Hold the date on calendars
Designate team leads
Conduct kick-off meeting
Customize exercises and templates
Conduct internal and external interviews
Prepare/review briefing book / pre-reading assignments
Make team assignments
Distribute pre-reads
Schedule Wargame After-Action Report
2+ months leading up to Wargame:
Confirm attendance and revise teams if necessary
Meet with team leads to address questions and revisit expectations
Review meeting logistics room set up, audio-visual/computer equipment, name tag/placards, etc
Week of Wargame:
Conduct post-Wargame debrief with lead/sponsor and vendor
Confirm time and attendees for After-Action Report
Review vendor final report (may include multiple iterations)
Secure and store all Wargame enduring materials
Transfer and integrate learnings into strategies and tactics
One to two weeks after Wargame:
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Is a War Game the Way to Go?
Decision Scope Actors Prep Play Insights
α What do you hope to achieve by running a war game?
α Assess the time horizon, level of uncertainty, intelligence gaps
α Can be valuable for team building or rehearsing a tactical or strategic move.
α Assess the availability of resources (including human and time)
α Generic war games are often good for first time
α A longer, tailored war game will be most beneficial for testing a complex situation.
1
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Scope Actors Prep Play InsightsDecision
2
1. To determine whether a wargame is really appropriate
2. To get Sponsor commitment and set expectations
3. To confirm the war game’s preliminary purposes and
scope
4. To identify potential participants
5. To identify potential sources of design input
6. To define a preliminary development schedule
7. To identify responsibility for administration and logistics
8. To agree on specific next steps
War Game Definition and Scoping
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War Game Objectives – Example 1
Hard Deliverables(measurable results we are looking to get from the game)
Soft Deliverables (change in Participants' perceptions – better
understanding of competitors / market)
1. Growth Strategy document designed
to provide actionable
recommendations on how to increase
market share by x% over the next 3
years.
2. Road-test specific strategies related
to;
a. M&A
b. Home delivery/online ordering
c. Nutritional labeling
d. Private label
3. With a number of uncertainties in the
market right now, company needs a
strong, documented SWOT and Four
Corners Analysis with Implications
and Strategies;
4. Consumer needs Gap Analysis
1. Raise awareness of the participants
on the dynamics in the
marketplace;
2. Induce the participants to think
outside the box as it relates to
strategies and tactics;
3. Increase the involvement of the
participants in the daily activities
and tactics of the business;
4. Provide the participants an
understanding of the motives and
strategies of the competition.
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• Determine the end game of our growth strategy, e.g. Continue with status quo (3-4%
annual sales growth), become more aggressive and take a new cost position or enter
new markets to accelerate growth in an attempt to double the size of the company.
• Determine product prioritization of what products will be worked on and allocated
resources.
• Determine where to focus investments and cost reductions to more effectively compete
against both traditional premium and newer aggressive market entrants.
• Anticipate competitive responses, of both direct and indirect competitors, to the product
prioritization, investment focus and cost reductions changes.
• Determine how we will respond to the competitor responses.
• Develop a competitive strategy vs. competitors to remain a market leader and increase
sales.
• Identify and consider the changes that we are seeing in the competitive environment in
the US with new players.
• Identify weaknesses in target competitors where we can take advantage.
• Uncover blind spots or weaknesses where we may be vulnerable.
War Game Objectives – Example 2
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Exercise #1 - Define the Scope of Your War Game
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ActorsScope Prep Play InsightsDecision
Determining the Actors
“The Market”
Customers, Government, Channel Partners, etc.
Our Activities
From Strategy --- Operations --- Tactics
Our Competitors
Direct, Indirect, and New Forms
Level of success in the market is determined by all 3 lines of force. No matter how successful we are in implementing our
strategy, the actions of market externals and all forms of competition will impact our performance.
3
25
Roles of Competitor Teams
Anticipate how the competitor
will/could act
Get into its culture and mindset
Act and invest as it would
Consider a “Wild Card” competitor
26
Roles of the Market Team
The Market Team will represent the Customer’s interests and will rule on how well each of the teams meet the customer’s
needs and wants, as well as improve their standing in the customer’s eyes. The Market Team will also represent the interests
of any other stakeholder deemed necessary in order to meet the game’s deliverables. If a question requires input from a
regulatory body or local government, the Market Team will take on that role. The Market Team will also be responsible for the
following roles:
Anticipate how the market or customer will react to competitors’ moves
Award market share growth/decline after each round
Select “issues” to be considered
Determine future purchasing or vendor selection criteria
Rule on competitor teams’ “off the wall” moves
Enforce “Rules of Engagement”
Award resource gains/losses after each round
Must be credible and apolitical
Observe and comment on team dynamics
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Who Should Participate?
A broad mix of functions is most effective.
Identify and include key influencers within the functional areas –
those whose buy-in will help when it comes to implementation of the
ideas surfaced during the game.
Those who best
understand the
relevant market
and have an open
mind to the outcome
Anyone who can
champion the
planning activities
post-game
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Exercise #2 – Determine Actors & Players
Market Home Team Competitor 1 Competitor 2 Competitor 3
1
2
3
4
5
= SPONSOR
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PrepScope Actors Play InsightsDecision
α Most time consuming part of the design process.
α Players will need comprehensive background information – Market & Competitor Profiles, pre-game assignments, Evaluation Methods, KIT/KIQ Research.
α Decide how teams will communicate.
α Players will need some introductory training.
α The final important preparation is the physical set up of the space(s).
Preparation of Profiles, Exercises and Evaluation Methods4
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Market Profile
• The MARKET PROFILE in general, should include the following:
–Description of the market
–Segmentation Breakdown (Market Sizing, Share, Growth Rates).
–Market Highlights
–Market Trends
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Competitor Profile
• Should include the following:
–Basic Overview
–Historical Context/Timeline
–Strategic Direction
–SWOT Analysis
–Financials/Financial Analysis
–Products/Services and Cost/Pricing
–Strategic Relationships
–Culture and Leadership
–Anecdotal Information
* Should include primary research, even if internal interviews.
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Primary Research KITs/KIQs - Example
KIT: Competitive Environment
• KIQ: Who do they view as their primary competitors in the XYZ market? Who don't they view as competitors/threats in the XYZ market
segment? Why?
• KIQ: Has the competitive environment been stable over the last few years? Do they expect it to continue?
• KIQ: What would really shake up the competitive landscape? What would happen if someone new entered their core market (e.g., someone
who has other technology today and is credible in the space, but not historically a XYZ expert). What about an existing player getting more
aggressive to take business from them?
KIT: Forward-looking commentary around product and market development
• KIQ: What is their area of focus in XYZ going forward? (i.e. what applications or markets? See background material for examples of
applications)
• KIQ: Are they investing in innovation? If so, what type? (This could include such features as reducing noise, heat, increasing pressure or
flow ratings, etc.)
• KIQ: What applications are they pursuing / prioritizing? Which are not as important to them in the future? (Example: ABC has a strong
dental applications business, perhaps they could be placing greater emphasis on medical applications in higher margin market segment, etc.)
• KIQ: Is there room to differentiate product or business performance to win in this space? What are major drivers besides price? How do you
make your choice on supplier? How often do you review it / introduce new people? Are your product needs changing (flow/pressure - ie:
size)?
KIT: Market Trends
• KIQ: What major trends do they see that are impacting XYZ or the industry in general? Do they expect them to continue?
• KIQ: Customer trends (how customers want to buy, what they are looking for in a supplier, etc)
• KIQ: Regulatory, geographic (are there regulatory changes that are impacting the business (particularly in medical/dental space) What role is
geography playing, i.e. our customers looking for pump suppliers from certain geographies for any reasons such as lower pricing or higher
quality, better customer service, more flexible shipping/supply, etc.).
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Envelope of Objectives
Market and Competitive Map • Used to define the “battleground” and to develop strategic and operational
level plans
• Defines current size and distribution of competition by segment as well as
minimum and maximum likely growth
• Often involves several segmentation schemes and different measures of
sizeY N Y
42MOB-WG
3/00Ka ppa West, Inc.M a n a ge m e nt Co n su l ta nts
Linking the Map and Triage
Accept Loss
Delayed Secondary
Attention
Immediate Concentrated
Attention
Triage
0
2
4
6
8
1 0
1 2
1 4
1 6
1 8
2 0
2 2
2 4
A B C D E F G H I J
Segment
Unit
of
Measure
Gap Analysis
Green/Amber/Red Matrix
KappaWest, Inc.Management Consultants
© 2001 KappaWest
LANT-ASOT
Green/Amber/Red Matrix for Acquisitions
CriterionGreen
We’ll Seek Out
AmberWe’ll Look At
RedWe Won’t Consider
Lines of
Business
Size
Location
Technologies
Ownership
Culture
13
Stakeholder Analysis
Tool Include? / PG PagesApplicability
Application/Notes
• Helps to identify key gaps between objectives and what normal course of
business will generate
• Allows a preliminary triage of potential gap closers
• Defines the boundaries of the organization’s operations
• Sets what must, may and may not be addressed in the plan
• Critical to ensuring any plan is focused on satisfying the organization’s
stakeholders
• Used to help define key goals and constraints
• Deals with all significant present and anticipated stakeholders and their
concerns
S O T
Y Y Y
Y N N
• Helps to convert key position-based strategic goals into operational level
“numbers”
• Recognizes that specific numbers should not be set too far ahead
• Might apply to share-of-market, revenue, profitability and other key
indicators of success and progress Y N N
Y Y Y
1 2 3 4
Maximum Likely
Minimum Likely
Bio-Rad FTS Stakeholder Analysis – 1 (Internal)
Stakeholder Concern Driver / Satisfier
Current Position Comments
T S G
GAP ANALYSIS
Objective and Sources Period
-2 Years -1 Year Current +1 Year +2 Years +3 Years +4 Years
Objective 20
(Actual) 24
(Actual) 35 45 60 80 95
Source 1 20 24 28 34 40 35 30 Existing Product Line and
Markets
Source 2 - - 6 7 7 7 5 Existing Product Line
Kickers
Source 3 - - 1 2 6 10 15
Expansion to West Coast
Source 4 - - - - 2 8 12
Gemini Product Line
Source 5 - - - - - 3 8
Libra Product Line
Total from all defined sources
- - 35 43 55 63 70
Gap - - 0 2 5 17 25
Gap = Objective – Total of all Sources
Analysis Tools for Team Exercises
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Force Field Diagram
Porter’s four Corners Analysis
Probability Impact Grid
Silver Bullet Analysis
Contribution/Feasibility Grid
Tool Include?Applicability
Application/Notes
• Used to help assess and triage a broad range of potential gap closers
• Helps to build consensus about what must, may and will not be done
• Used to help identify the company’s real and relevant strengths and
weaknesses applicable to market needs and wants
• Helps to focus efforts on more critical efforts
• Helps to identify the key internal and external factors that have helped or
hindered the organization’s success and what will probably affect it in future
• Used to identify what must be incorporated into the plan to exploit its “drivers”
and neutralize its “restrainers”
• Used to help assess and triage a broad range of possible events and trends
to focus efforts on the more critical ones
• Helps to build consensus among planners about what the plan must and
should deal with
S O T
Y N N
Y N Y
Y Y N
Y Y Y
Y Y Y
Bio-Rad FTS Silver Bullet Analysis BU
Date 1/15/15
Buyers’ Needs
and Wants
Competitors’
Weaknesses
Our
Strengths
Customer Need or Want
Competitor Status Codes Notes
Bio
Codes 3 = Clearly Best 2 = As good as best 1 = Good enough 0 = Not good enough X = Hopeless ? = Don’t Know
• Used to determine a competitor’s Course of Action.
• Focused on future strategic intent.
• Takes into account values, mindset and motivation.
Analysis Tools for Team Exercises
35
Decision/Selection Map
Business Model Canvas
Technology Roadmaps
Risk Profile
Risk Profile Situation Prepared by:
Prepared on:
This situation has the
following risk characteristics:
Maximum win is 5.
There is a 30%
probability of winning 2
or better.
There is a 60%
probability of breaking
even or better.
There is a 40%
probability of a loss.
There is a 10%
probability of a loss
exceeding 2.
The maximum loss is 3.
The net utility is
positive.
6
5
4
3
2
1
-1
-2
-3
-4
-5
-6
Break
Even
Level of
Win or
Loss
Probability0% 100%
Can Win/Will Win Analysis
Tool Include?
set of strategic or operational -level
alternatives
ApplicabilityApplication/Notes
• Used to help assess relative importance of different criteria in addressing
selected markets or segments
• Also very helpful in determining how to negotiate with a potential buyer,
partner or acquisition, or to sell a major “deal”
• Helps to assess the degree of “risk” associated with each of a particular set
of strategic or operational-level alternatives
• Used to help evaluate and “sell” appropriate option(s)
• Also helps to see where and how to reduce risk
• Supports a more rigorous assessment of whether a proposed strategy can
work, and based on current plans, if it will work
• Also helps to identify what can/should be done to improve the probability of
success
S O T
N N Y
Y N Y
Y N Y
Y Y Y
Y N Y
• Used to determine if there are areas of our business
model that we can tweak to increase its effectiveness.
• Much easier to alter the business model than to
make changes to the technology pathway.
• Used to set phase lines in the development of new
product features and functions.
• Can include M&A activity as well.
Lost Opportunity Review
Client name: Date:
Project Title: By:
Part 1
Bio-Rad was not selected as the solution provider because of the following reasons:
3. Another vendor provided a better solution than Bio-Rad (move to Part 2) X
4. Other reasons
Part 2
The key criteria used to evaluate Bio-Rad and the other vendors are listed below.
Selection Criteria
Bio-Rad Ranking Not acceptable Not as good as
another
vendor
About as good Better than the
others
Understanding what was needed Responsiveness to Customer Quality of Proposal Fees and terms References and Reputation
Part 3
What could Bio-Rad have done to increase its chance of winning?
Analysis Tools for Team Exercises
36
Evaluation Methods (1)
There are the eight Evaluation Methods typically used by the Market Team in judging the performance of the Competitors Teams in each Round of the game:
(1) Market Map Model – an Excel model that shifts share, and allocates growth to the Competitor Teams, based on a pre-determined segmentation scheme. This tool is normally used when all the players are established in the market, but can be used during a launch scenario when a following Round will leave each team with market share.
(2) Strategic Dollars (a proxy for the company’s overall market power. This is a simplification for the game’s sake so that they do not have to prepare a full budget. The allocation is based on an exercise the Market Team goes through early in the game, and then the teams invest their Units behind their strategic initiatives. It forces them to triage, as they will not have the resources to do all that they want to do. The number of Units they have to spend goes up or down based on their performance (and their internal stakeholders confidence in their plans and actions).
(3) Decision/Selection Map – a more rigorous version of the Needs/Wants Analysis that rewards teams that listen to their customer and develop strategies and tactics to improve their competitive position on meeting VALIDATED needs and wants.
(4) Qualitative Feedback Sheets – What did the teams present that the Market liked hearing, what they didn’t, and more importantly, what they want to know more about… This will allow the Market Team to shift a team’s focus if they are off-track or chasing a rabbit down a hole. It also will encourage them to further explore ideas that impressed the Market, but were not thoroughly defined or validated.
37
Evaluation Methods (2)
(5) Peer Evaluations – After each rounds’ presentations, each of the Competitor Teams will fill
out an evaluation form that focuses on what they saw from the others that might keep them up
at night. The Market Team then includes this analysis in their feedback to the Competitor
Teams.
(6) Contribution / Feasibility Grid – This exercise is conducted when we want to assess the ROI
of several different projects / programs under consideration when we know we will be forced to
triage even good ideas due to resource constraints.
(7) Stock Market Simulation – Each Team’s share price is adjusted after each round in the game
to account for their performance in keeping their most important stakeholders content.
(8) Opportunity Loss Review – Used in Bid and Tender Games. This exercise allows the
Customer Team to “steer” the competitors so that they not only have a better chance of winning,
but understand where their gaps actually are.
38
Rules of Engagement - Example
• No mergers or acquisition unless approved by the Market team
• No addition of resources unless approved by the Market Team
• No international expansion
• No selling of business units or product lines
• All Partnerships must take into account the timeframe selected for the game and must be approved by the Market Team (there may be press releases distributed throughout the game on this issue)
• The Market Team will respond to questions, presented in writing. They may reward a particularly good question with a definitive answer; they may tell you that an answer is forthcoming if the team is willing to invest in market research; or they may tell you that there is no way for you to acquire the intelligence you are seeking. All rulings by the Market Team are final.
• Expect that you will be forced to triage. You will not have enough time or resources to do everything you want to do. There will be rewards for strategic initiatives that have near-term impacts.
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• A list of potential market events that could significantly impact
your business, given the time horizon selected for the game.
Not all will be used, and there will be ideas explored that you
wouldn’t have thought of previously.
#Event / Scenario Title
Government approval of legislation that has impact on your business
Competitor announces they will be manufacturing their own products
International competitor announces they will be opening two new North American
sales offices and one new manufacturing facility
Competitor acquisition of a disruptive technology or competing product
Consumer, financial, labor market update
Market forecasts or impacts to industry growth rates
Market Events
40
Exercise #3 – Determine Market Events & Rules of Engagement
Market Events Rules of Engagement
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PlayScope Actors Prep InsightsDecision
α Two days is common, run as a series of ‘rounds’ representing a time period. Rounds are usually 2-4 hours.
α Teams have limited time to prepare action, teams will submit their plans to market team.
α The actions will then be fed into the evaluation methods.
α Each team receives limited feedback about the actions of the other teams.
α In-game press releases used to change game parameters.
α Have administrative and technical support available.
α The outcomes should be recorded.
Playing the Game5
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DAY 1
Time Room Notes
8:00 – 8:15 am Training Room Opening comments and introductions –
8:15 – 8:45 am Training Room War Game Methodology Briefing – Tim Smith
8:45 – 9:15 am Training Room War Game Process and Tools Presentation – Tim Smith
9:15 – 9:30 am Coffee Break
9:30 am – 1:00 pm Break-out rooms:Round 1 of the War Game
Includes working lunch
1:00 – 2:00 pm Training Room Round 1 presentations
2:00 – 2:15 pm Coffee Break
2:15 – 5:00 pm Break-out rooms: Round 2 of the War Game
5:00 pm End of day 1
6:00 pm Group Dinner
Sample Agenda Day 1
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DAY 2
Time Room Notes
8:30 – 9:00 am Training Room Finish Round 2
9:00 – 10:30 am Training Room Round 2 presentations
10:30 – 10:45 amCoffee Break
Probability / Impact Grid exercise
10:45 – 11:45 am Training Room Probability Impact Grid Exercise
11:45 – 12:45 am Lunch
12:45 am – 2:45 pm Break-out rooms: Planning Round
2:45 – 3:00 pm Coffee Break
3:00 – 3:20 pm Training Room Immediate Action Items / Announce Winner
3:20 – 3:35 pm Training Room Closing remarks
Sample Agenda Day 2
44
Round 1 Objectives
• Each team will go through a series of exercises designed to help us
put together the strategy of our respective teams.
• The primary objective is to get into the mindset of the team we have
been selected to represent and do our best to “win” in the selected
market.
• The goal will be to come up with strategies and tactics that best
position the teams vs. their competitors, fully exploiting opportunities
and proactively blocking the other teams.
• The two essential tools the teams will utilize are:
– Silver Bullet Analysis
– Four Corners
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Team Task - Round 1
Task Task Level Suggested Time Worksheet Page(s)
Part 1: Get started (before we discuss strategy, let’s make sure we are all on the same page)
1.0 Get Organized ----- 5 3
1.1 Silver Bullet Analysis Mandatory 20 – 30 6
1.2 Key Questions to Consider Mandatory 10 – 20 7
1.3 Potential Partner Matrix Optional 10 – 20 8
Part 2: Develop strategy
1.4 Questions for the Market Team Optional 15 – 20 9
1.5 Business Model Canvas Mandatory 20 – 30 11
Total Time Available for this Assignment 90 Minutes -----
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Trust
Silver Bullet Analysis
SILVER BULLET ANALYSISUpdated On:
Account Name:
Segment or Customer Needs and Wants CommentsHome Comp A Comp B Comp C
Competitor and Status
Status Codes:
3. Best in class
2. As good as any other competitor
1. Good enough, but competitor(s) better
? Don’t know
X Not good enough
Notes:
a. Only one “3” on a line
b. If any competitor has a “3” on a line, no
other competitor is better than a “1”
47
Why Porter’s Four Corners Model?
• Predictive – Porter’s Four Corners Model is a predictive tool designed by Harvard’s Michael Porter that helps in determining a competitor’s course of action
• Future focused – It is unlike other predictive models which predominantly rely on a firm’s current strategy and capabilities to determine future strategy
• Looks at competitor’s motivation – Porter’s model additionally calls for an understanding of what motivates the competitor
• Realistic – This added dimension of understanding a competitor's internal culture, value system, mindset and assumptions help in determining a much more accurate and realistic reading of a competitor’s possible reactions in a given situation
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Teams Present - Round 1
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Round 2 Objectives
• After witnessing competitors present their strategies, and receiving feedback
and evaluation from the Market Team, the Competitor teams will go into Round
2 with the same primary objectives of exploiting opportunities and developing
countermoves to competitive threats.
• We will again go through a series of exercises designed to help us clearly and
concisely communicate our team’s strategies and tactics to the Market Team at
the conclusion of the Round.
• At the end of Round 2, the Market Team will select a winner based on
established evaluation criteria selected by the Sponsors.
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Team Task - Round 2
Task Task Level Suggested TimeWorksheet
Page(s)
2.1 React to competitors Strongly Suggested 15 – 20 3
2.2 Dealing with Special Issues Strongly Suggested 15 - 20 4
2.3 Meeting with the Market Team Strongly Suggested 10 – 20 5
2.4 Business Model Canvas Mandatory 30 - 40 6
Total Time Available for this Assignment 90 Minutes -----
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Trust
Business Model Canvas
Key Partners /
Channels
Key Activities Value Proposition Customer
Relationships
What relationships do we
want to reinforce?
What is critical to our
value proposition?
What needs are we
satisfying?
Which customers need
more focus?
Where could we be held
hostage?
What should we be doing
more of?
What segment is
unaddressed?
Which are creating conflict?
How are we helping to
solve their problems?
Cost Structure Revenue Streams Messaging Customer
Segmentation
How can we save
resources?
Are there potential
revenue streams we
should explore?
Loyal Physicians vs.
Competitors?
Is there a way we could
segment the market to give
us an advantage?
Will you focus on
evidence?
How will you
differentiate?
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Teams Present - Round 2
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Planning Round
• The purpose of this exercise is to generate action and
contingency plans focused on the major opportunities and
threats triaged from the Probability/Impact Grid exercise.
• The teams will go out one more time and develop a Plan Profile
on the selected issues that will give us momentum and an action
plan to execute on once we leave the session.
This is the most critical point of the 2 days.
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Probability-Impact Grid (PIG)
• The diagram to the right is the
Probability/Impact Grid exercise.
• This exercise allows the
participants of the war game to
discuss, as a group, the various
competitor moves and market
events that surfaced during the
simulation, and decide what the
probability of them occurring really
is, along with the potential impact
they would have on the company.
• The circled numbers represent
where the group felt the
event/scenarios fell out. Those that
fell in either the blue or red box
have the highest impact, along with
the greatest likelihood of occurring.
• The Sponsors then meet to decide
which they want to explore further
in the planning round. Those filled
in yellow were the ones selected for
the planning round.
• Although Event #3 was rated by the
group as having a devastating
impact and a high probability of
occurring, the Sponsor felt that
there was little the organization
could do regarding this issue, given
their resources.
The event / scenarios in the blue-shaded area were
determined to have the greatest potential impact, and the
highest likelihood of occurring.
The event / scenarios in the red-shaded
Area were determined to have devastating
impact, along with a high likelihood of occurring.
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InsightsScope Actors Prep PlayDecision
What, So What… NOW WHAT?
α Outcomes need to be collected and organized into a meaningful ‘after-action or after-game report’.
α Once the report is complete it must be followed up and the insights gained during the CS should be acted upon.
α Players must be debriefed.
Develop the Deliverables and Insights6
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After-Action Sample:
Competitive Highlights
Team Round 1 Synopsis Round 2 Synopsis
Home
Team
• Standard, but steady
• Took the feedback from the Market to
heart, but were not very pro-active
towards competitors
• Their positioning idea was original and innovative
• Did not back down to competitive messaging
• Liked prioritization of customer segments
Rival 1 • Strategy seemed to be all over the
place in Round 2
• Did a good job of addressing
customer needs and wants
• Very aggressive on proven market results
• Clear strategy on their product vs. ours
• Broad-based attack on our launch
Rival 2 • Clear leader in Round 2
• Very coherent strategy
• Very clear strategy, but not enough on execution
• Social media comms was good, but over-
resourced
Rival 3 • Seemed a bit all over the place in
Round 2
• Not very clear on what their response
to product launch was
• Market liked the discounting plan
• Also liked the comparison to other flawed
products
• Provocative sales force increase & loyalty
program
The table below gives a brief description of how the Market Team felt each of the two competitive
rounds played out. For more detail on how they evaluated the teams, and the reasoning behind it,
please refer to the Market Team section of the report.
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After Action Sample:
Key Issues and Outcomes
Key Issue Competitor Will… Our Response
Defend lack of
customer
service data
Competitors message this issue to
mitigate launch
• We will set up feedback loop for representatives and customer
account team to gauge impact of lack of time-series data at
launch; share best practices on how to handle
• Develop rep response indicating that several other recent product
launches did not have time-series data at launch
Messaging • Tout their longevity in the product
class.
• Claim our product is “too radical,”
untested, barely passing
regulatory review
• 5 successful beta clients
• Rivals products have had negative returns for 5 years cumulative
• Educate on what is required and how to manage
• Can utilize heavier social media communication, particularly via
our large FaceBook and Twitter presence
Competitor
Increase in Ad
Spend
We expect that the incumbents will
increase their spend in an effort to
lock up key institutional clients
• Leverage consumer demand for new retirement options
• Maximize the impact of the news event around the availability of a
new class of product
Feet on the
Ground and
Selling
We expect at approval that there
may be some financial options data
that we won’t be permissible in
promotion.
• Right-size the new prods team to a competitive size
• Via the Blue Guide can we share product data that is still under
review
• Ability to communicate regularly with speakers via intel network
wiki on relevant product data
The issues highlighted below were derived from our Contribution / Feasibility Grid exercise.
58 58
Define Intelligence Goals & Objectives: - To create a simulation of future competitive behavior
- To anticipate the probabilities and impacts to your business of certain scenarios coming true
- To exercise greater control over ongoing competitive storyboarding
Inputs- Sponsor Commitment
- 20-40 key stakeholders
- Decide on 1-2 day format
- 4-6 week prep calendar
Starting Point
PROCESS
PLANNING
α Pre-Briefing Book
α Market, Competitor Profiles
α Team Assignments
α Logistics Considerations
EXECUTION
α 2 Rounds of Play (generally)
α Probability-Impact Grid
α Intelligence Gaps
α Strategic Lessons Learned
Benefits & Outcomes:- Plan profiles that enable the Sponsors to "sell" the more significant strategic options generated
by the simulation
- Understand how competitors and other market players will react
- Is used to provide that critical link between strategy and tactics.
- Explore and test future competitive strategies in order to discover any weaknesses in a plan and to identify possible consequences of plan adoption
- Probability-Impact Grid (PIG) that allows ongoing risk and opportunity assessment
End Result
AFTER-ACTION
α Competitive Storyboard
α Immediate Action Items
α Strategic Alterations
α What’s Next?
Decision Scope Actors Prep Play Insights
1 2 3 4 5 6
2
3 4 5 6
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Your Take Home Exercise
α Select round 1 and 2 analysis exercises
α Select evaluation methods
α Develop an agenda
α Define market & competitor profiles
α Sell your war game internally
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Examples
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Wargame Example - Tactical
Ch
23.
61
Industry Pharma/Biotech
Company size Fortune 500
Planning level Tactical
Wargame Purpose Company was launching a product with new MOA into a crowded market.
They were looking for ways to counter messaging from existing
competitors before they launched. They also wanted projections on how
long it would take to capture significant share.
Wargame Outcome What the game showed was that it was unlikely that their new product
was going to displace any of the existing products, given the safety profile
and demonstrated efficacy. They were unwilling to play with price too
much, and decided to delay launch.
The competitor that “won” the game had production issues in the real
world, and this lead to the company purchasing the “winning” product at
a bargain.
Prepare for launch
Determined customer was more price sensitive than previously thought.
Wargame “opened eyes” about home team being significantly behind competitors in terms of safety and efficacy.
EWI tracking set up because of the game allowed them to respond quickly when chief competitor ran into problems.
Purpose
62
Wargame Example – Strategic & Tactical Review
Ch
23.
62
Industry Biopharmaceutical
Company Size Top 15 Global Biopharmaceutical Firm
Planning Level Strategic & Tactical Decision Enablement/Competitor Mindset and Launch Pan
Review
Simulation Purpose Client preparing its launch plan for a potential first-in-class (NCE), that held the
promise to change therapeutic guidelines and clinical practice.
Client new to market and entering against 3 highly established companies/products.
Client wanted to better understand the likely mindset of the competitors and how
they could counter-position against their product and blunt their product adoption.
Simulation Outcome Client had a clearer understanding of the mindset of each competitor, based on
SWOT, Porter’s Four Corners Analysis, and competitor action plans, describing how
the basis of competition could play out.
The launch team dissected the mindset analysis and action plans, to ensure that
action-steps were clearly described to accentuate their owned advantage, and to
refute counter-positioning.
A GAP analysis revealed opportunities to strengthen areas of their business plan,
creating stronger clinical, economic evidence, and establishment of KOL networks,
given the strength of the incumbents.
Deeper understanding of the unique competitor mindset, what drives that mindset. Review of own launch plan and identification of opportunities for enhancement.
Client teams spent a full day in the head of the competition understand their culture and tactical strengths and weaknesses.
Client launch team was able to cross-match their plan against the competitors and identify GAPS and opportunities for enhancement.
Cross-functional team aligned around priorities and allocation of resources. Understanding of competitors galvanized the team toward a successful launch.
Purpose
Deliverables
63
Wargame Example – Strategic & Tactical
Ch
23.
63
Industry Gold Mining
Company size Fortune 500
Planning level Strategic & Tactical
Wargame Purpose Company was launching to improve its’ process for identifying new
geological exploration fields to mine. This was driven by a near-term
tactical requirement as the best exploration areas were consistently
caught up in a bidding war amongst the major players, but this clearly had
longer-term, more strategic impact to the business.
Wargame Outcome Outlined how 3-5 very specific alterations to the client’s discovery
process would improve its’ chances of securing certain exploration fields
ahead of the competition.
While the #2 player “won” the game, the home team (#1 by market
share) learned how it might exploit/leverage certain “wild card” market
participants more effectively in joint venture (JV) situations.
Process alterations
Determined home team needed refinement in existing discovery process.
Wargame outlined very specific ways the home team can JV with “wild card” market players to improve its’ position in pursuit of major deals (securing the exploration field).
Brought cohesion to the home team in terms of common process for exploration and discovery.
Purpose
Deliverables
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Wargame Example - Strategic
Ch
23.
64
Industry Consumer Products
Company size Fortune 500
Planning level Strategic
Wargame Purpose Company was looking to increase throughput from their R&D unit, which
was not keeping pace with competitors on launching products.
Wargame Outcome The wargame showed that it wasn’t just one problem that was slowing
things down. As expected, the company’s risk profile played a part.
What also became apparent was that R&D had no clear reporting format
and ended up working on many projects that were either not likely to go
to market, or were pet projects with little or no market opportunities.
Understanding who their true stakeholders were, the BUs, was a key
learning that lead to change.
Improve ROI of our R&D
Determined our risk profile was substantially more conservative than our competitors, and that this was exploitable.
Consolidated R&D under the corporate umbrella, ending internal conflict for resources and reducing inefficiencies.
Group consensus on using consistent measures to track market opportunities and consumer trends.
Deliverables
Purpose
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Concluding Remarks
66
My Parting Recommendations…
α Must clearly define the exercise’s objective
α Full support and buy-in from your Sponsor
α Plan ahead – 4-6 weeks minimum, ideally 8 weeks
α Follow through, follow through, follow through!
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Derek Johnson, CFA
Aurora WDC
@dljalpha
608-268-3470
• The Intelligence Collaborative
– October 26th – Alysse Nockels (Intel Security):
“How Not to Do Wargames”
– http://reconverge.net/event-type/intelcollab-
webinars/
• Network with others
– Keep the conversations going!
• Call or email me
– Always happy to be your sounding board!
Ways to Learn More…