- Human nature leads one to overestimate one’s own strategy and underestimate the competition
- There are multiple significant competitors in a market, and it is difficult to “get inside the head” of each
- It feels overwhelming to combine the uncertainty of competitor options and external factors
One way I’ve found effective is through a business war-gaming workshop called “Battle of the Brands.” Using a market simulation program, a model of the product category is built. This includes
- The major competitors, brands and products
- Consumer segments, their preference for attributes, perception of brands, and sensitivity to price and media
- The relevant distribution media channels
A team of business managers is then brought together, with each manager in the role of controlling one of the competitors with the goal beating everyone else. Each “player” creates an annual plan, and the simulation is run for each quarter of that year, with the ability of the players to adjust their plans each quarter. Typically this is repeated several times, because with every “round” the players become more creative, building their knowledge of where the leverage points and risks lie.
The result is, as you would expect, a much more realistically competitive set of competitors. And, somewhat more surprisingly, there are also typically epiphanies that start with “why are we doing…?” and “why haven’t we ever tried…?” The team invariably wants to stay longer and try out “just one more idea.”
Workshops provide valuable insight, but to harness this insight there needs to be some change in behavior that results from the activity. In Battle of the Brands, the software model used in the workshop is made available to participants afterwards for continued exploration. More importantly, the model can transition from workshop to operational tool, in which it is calibrated to produce answers that are not just realistic, but accurate enough to be incorporated in the real-world planning process.