What is business wargaming?

Wargaming is one of the oldest simulation methods, the history of which goes back to the 17th century. The approach originated in conflict games that were used to prepare for unexpected developments in military conflicts. So-called wargames were used to anticipate the reactions of the opponents and to be able to act more though at a strategic level.1

How does Business Wargaming work?

Since the middle of the 20th century, the wargaming approach in the form of business simulations has been used in an economic context. “What-if” scenarios can be estimated by simulating interactions between future actions. 1 Anyone who understands what will be the counterpart’s reactions to their own behavior, is able to act with more foresight, consideration and thus more long-term. By trying out different tactics, in business wargames participants gain experience in a safe environment and lern to act quickly as well as to avoid wrong decisions.

In companies, business wargames are used to simulate complex problems. Economic challenges are made tangible through the simulation and information can be derived from the virtual company model.2 A business wargame is different from classic computer simulations, because it enables participants to develop their own strategic decision-making tactics, which are then transferred to the simulation.

When can wargaming approach be used?

The method is particularly suitable for recognizing and understanding strategic relationships in the company. While classic business simulations mostly operate on an operational level, business wargaming deals with strategic planning. Typical areas of application include, for example, defining pricing strategies, entering new markets, new product launches, or a changing competitive situation on the market.

How can your company profit from business wargaming?

Questions such as “How can we position ourselves on the new market?” or “How can we find suitable cooperation partners on the market?” can be analyzed using the business wargaming method.

  • Strategic realignment: example from the automotive industry

TOPSIM developed a strategy implementation training based on the wargaming principle for a German car manufacturer. The focus of the workshop was on the used car market in China, which in future should become the focus of the group’s entrepreneurial activities.

The strategic realignment had to be communicated and implemented. In order to weigh the chances of success in the target market and to be able to plan further steps, the developed strategy was put to the test in a realistic simulation.

Download the Case Study: Business Wargaming exercise for a German sports car manufacturer (PDF)

Sources:

  1. Romeike, Frank/Spitzner, Jan (2013): Von Szenarioanalyse bis Wargaming. Betriebswirtschaftliche Simulationen im Praxiseinsatz, Wiley-VCH, Weinheim 2013.
  2. Oriesek, Daniel F./Schwarz, Jan Oliver (2009): Business Wargaming. Unternehmenswert schaffen und schützen, Gabler Verlag, Wiesbaden 2009.

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