The Art of War Games and SWOT
In the world of business, war gaming is a common tactic used to analyze competitive intelligence and test the implementation of strategies to counter the competition. If I may briefly follow the example of the movie industry and quote Sun Tzu in reference to business: “To know your enemy, you must become your enemy.” This exact strategy is part of what war games attempt to accomplish, which is to simulate the mindset and situation of one’s competitor so that strategies to counter the competition can be tested. To create the most accurate representation, however, the intelligence gathered must be up-to-date, and other analysis techniques should be used to their full extent.
Techniques such as a SWOT analysis and Porter’s four corners model are second to competitor benchmarking as some of the top types of competitive intelligence studies utilized by the pharmaceutical industry. A SWOT analysis is a snapshot of the competition’s strengths, weaknesses, opportunities and threats, put in a matrix to determine the most likely next step based on the company’s overall objective. Information gathered through competitive intelligence helps complete a SWOT analysis so that teams can identify trends in their competitors’ actions and create a strategy around said actions.
However, a SWOT analysis can easily fail as a prediction tool. While, along with other benchmarking tools, it is invaluable for showing present trends, future strategies can prove hazy to see from the competition’s point of view. As a college professor of mine once said: humans are not rational beings, but rationalizing beings. That is to say, no matter how much people like to think otherwise, they make decisions based on drivers and assumptions more than logic and facts. The four corners model attempts to fill this gap by analyzing the competitor’s motivation and actions rather than their structure and situation. Even so, a SWOT analysis remains the prevailing method of evaluating intelligence gathered on the competition.
No matter the method of analysis, once the competitor’s behavior patterns and current situation are determined, war games come into play. War games allow strategies to be tested in a safe environment and easily determine their likelihood of success. However, the situation of the war game should be as realistic as possible, including an accurate portrayal of the competing businesses’ motivations, actions and reactions. Using gathered intelligence to create a characterized representation of a competitor can help optimize one’s understanding of the competition and therefore form better strategies to counteract any current or future actions.