Business is War - So Let's Have a War Game

The game is as much about tactics as strategy. At one point, during a lecture to the group, ACS President Mark Chussil discusses potential diversions by the competition -- essentially, strategic dirty tricks. "Don't we have at least one dirty trick on our side?" asks Jose Pepe Puente, general manager of SmithKline's Mexican consumer-product unit. In fact, the team representing SmithKline's product debates the value of issuing misinformation -- putting out the word that SmithKline will launch the product in Brazil rather than Mexico.

Chussil urges caution on that tactic. "Confusing competitors can make them stupid," he warns. "And that can lead to knee-jerk reactions -- like cutting price. It's better to figure out what you want the competition to do and how to get them to do it."

As the game draws to a close, the SmithKline team worries that it may be how loyal Mexican consumers are to the brand off of which it's leveraging the new product. The response : invest in usage-and-application studies to analyze the depth of brand loyalty, and whether it can carry the line extension. The team also reaches an eye-opening competitive insight -- a massive price cut by its chief competitor could wipe out the new product before it gets a chance. The solution : introduce the product with a niche strategy rather than launch a head-on assault in the marketplace.

Cruz thinks that's a smart move. "The point is not to trigger a price war," he agrees. "If we're only going for a segment, they won't kill themselves [competing] because in the end they'd lose more than we would. They won't feel as threatened by a niche product."

In general, the group feels positive about the outcome. The simulation concludes that if all the pieces fall into place, the new product could break even in the second quarter of its fourth year on the market. For Adrian Cruz, that's reason enough to declare victory and start celebrating. In a restaurant named after Winston Churchill, the participants receive certificates recognizing their participation in the war game. Their leader is beaming. "This is real life," he tells his team. "The competition is out to get us."