Late last century, Guinness Beer in Africa contributed 17% of the parent company’s global sales. It was perceived as an aphrodisiac, particularly amongst its main target – young males – who had started calling it Black Power and Viagra. So what happened to wipe out 6% of its sales by the millennium?
It wasn’t another beer competitor nor even another alcohol competitor. Instead the threat came from mobile phones, which had become a sexier purchase than beer. Sales of mobile phones were exploding. They were even available in the same stores that sold beer – and revenue was transferring. Guinness didn’t even see it coming.
This story illustrates the importance of war games – war games done well, anyway. In a market in flux, understanding the basic human truth which underlies behaviour highlights the real competitor and ensures that you don’t have a blind spot like Guinness did. It also shows the importance of thinking outside the box in traditional war game models. (In the 1930's, American Admiral Chester W. Nimitz was able to predict virtually all the World War II battles of the Pacific. After the war, he often said that the only tactic Japan employed that was not foreseen in those games was the use of kamikazes. Clearly the Admiral didn’t do enough blue sky thinking!)
There are a wide variety of war game approaches, including computer generated, statistical as well as role playing models. Generally they follow similar principles, which are to:
ENSURE YOU ACTUALLY NEED A WARGAME!
War games have a broad range of applications including new launches, competitor action, a brand revival or a dramatic change in key marketing mix elements such as pricing.
War games are best employed when the competitive environment is undergoing a period of change, and development of a managing tactic or strategy is required because failure will be costly.
There should also be varying potential outcomes for a war game to be effective versus traditional linear strategic planning, but not so much uncertainty that game players can’t offer any real hypotheses on how the future might play out.
RUBBISH IN RUBBISH OUT.
Good preparation is critical. A good brief is key to determine the scope of the game, and also the specific desired outcomes. It is also worthwhile to set in place indicators and warnings which signal that an identified threat is occurring in the market, or measurable indicators of success.
At the heart of the preparation will be a competitive intelligence deck, pulling together all the primary and secondary research that can be found about the competitors, the marketplace and also broader consumer trends. A rough brand positioning can also be of use. But how do you ensure that each team really gets in the headspace of the competitor? We recommend that pre work should include:
HAVE THE RIGHT PEOPLE IN THE ROOM
The primary objective determines the best people to include in the game - most particularly whether the session should have tactical or strategic outcomes. If it is tactical then the obvious contenders are teams with deep expertise who will be responsible for decision making. Strategic teams are more difficult to decide and will probably need a wider net and a bigger group. Generally a variety of functions is important to ensure that there isn’t a functional blind spot within the plans.
People usually need to be quite senior to be able to debate at the levels required, but team dynamics also should to be considered – for example, how open is the debate in the team which contains the CEO? The truly senior members of the organisation should contribute to the day, but might be better as part of an adjudication panel rather than a core team.
The personalities of the people chosen are very important for an effective workshop – teams need people who aren’t afraid to speak their mind, take action, and challenge the urban myths and current thinking.
It is also worth thinking about the level of understanding that each individual will have. Creating two teams of the main competitor – with different base levels of understanding – could create two different sets of plans at a macro and micro level.
And of course a skilled facilitator is essential to ensure that the game doesn’t fall into an all-out war!
IT SHOULDN’T ACTUALLY BE A WARGAME!
In the end, we at Bedrock Insight don’t even think it should be called a war game. After all, the end game isn’t to knock off your competitor but to best meet the needs of your consumer! For food manufacturers, perhaps The Hunger Games is a more apt description or those in transportation could have The Great Australian Race! Remember to keep one eye on your competitor and the other on your consumer and that in the end will give you the edge.
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