Business Strategy Simulations

Strategy simulations that focus on strategy

ACS strategy simulators rely on principles of competition, not accounting rules or extrapolated trend lines. That isn’t a technical detail. It’s the difference between cause-and-effect and wishful thinking. It’s the difference between a realistic view of your business and wondering how that complicated spreadsheet could have been so wrong.

Contact us to talk about how our strategy simulations can help your business.

Custom business strategy simulators for decision-making and education

ACS strategy simulators are suitable for:

  • Corporate decision-making. We custom-build business simulations for specific markets. We can license it to you so you can run it yourself, or we can analyze your strategy options on your behalf.
  • Business war games. We use our own simulators in the business war games we conduct. We can license our technology so strategists can use it in their own business war games.
  • Executive education and management development. Our business simulations add rigor, excitement, and intensity to programs about competitive strategy and strategic thinking.

ACS has created many business strategy simulations, including the award-winning ValueWar™ and patent-pending strategy decision tests, for business war games and strategy analysis. We build simulations customized to specific markets and we build general simulations for our executive-education workshops. You’ll see screen images of some of those simulators (with sensitive information redacted) below.

We have decades of experience creating innovative, customized strategy-simulation models and simulation software. Companies use our business simulators to make much better business decisions, to stress-test strategy options in a safe environment, to answer what-if questions, and to teach competitive-strategy skills. Our simulation solutions don’t fall into the common traps of conventional analytic models, such as extrapolating the past into the future, looking only at financial information, or ignoring competitors.

 

The quality of models

Every strategy analysis or decision has some way to assess outcomes; that is, some way to determine whether one strategy is better or worse than another.

The assessment may take place in a computer, using a spreadsheet or simulation model. It may be in someone’s head, based on experience and/or expert knowledge, and known as a “mental model”. (See All About Models.)

The quality of the assessment model you use is vital to the quality of your strategy decisions.

“The computer” calculates a number, and that’s that, or so it may seem. People may agree with the number or they may disagree with the number, but they may not know that the quality of the number depends on the kind of model that produced the number. Think of it this way: you could cut a board with a hammer but generally it works better to use a saw. It’s not only faster and easier, it’s also more likely to do the job right.

Just as different tools have their special talents, so do different models. You’ll get different answers, and different qualities of answers, when you use models based on accounting rules, on trend lines and extrapolations, on gap analysis or benchmarking, on customer purchase decisions, and so on.

The model for your strategy decisions will serve as a strategy calculator, so it ought to work with strategy concepts.

For instance, if customer preferences may change, if advances in technology may enhance products, or if new competitors may enter, then it’s essential to use a model that explicitly takes customers, quality, and competitors into account. Accounting-based models don’t.

For another example, if you expect the future will not look like the past, it’s essential to use a model that doesn’t assume it will. Models that extend historical trend lines into the future assume continuity, not disruption or opportunity. And isn’t it odd that we only want to extrapolate the trends we like?

Because we humans always use models (in our heads or in our computers) to predict outcomes, there’s no alternative to working with models in strategy analysis. It’s good to be skeptical of models (in our heads or in our computers); skepticism leads to rigor and insight. It’s good also to remember that mental models are not inherently superior to computer-based quantitative models. Yes, computers have limitations: for example, they calculate whether they’re given good or bad data. But so do people.

The relevant question is not whether a quantitative model is perfect. No model is, and no model ever will be.

The relevant question is whether strategists can make better decisions — and one way or another, they will make decisions — by combining a quantitative model with their insight, or by using their insight alone. It’s tough to beat Garry Kasparov at chess, and it’s tough to beat the Deep Blue computer at chess, and it would probably be impossible to beat a Blue-Kasparov team.

We can run your strategy simulation for you, or we can turn the model over to you. You can run the strategy simulator yourself as often as you like, and update it as new data become available.

Contact us to talk about how our strategy simulations can help your business.