The ultimate competitive advantage
The ultimate competitive advantage is out-thinking your competition. Out-imagining them. Out-testing scenarios that never entered their minds, their spreadsheets, their PowerPoints, or their boardrooms.
It all starts, and ends, with much better strategy decisions and much better strategy decision-makers. The result: strategies that have helped our clients make or save billions of dollars.
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Shell finds the flaws in a major strategy initiative and saves $133 million
The Shell Oil Company was contemplating a major shift in its strategy in the U.S. market. It was considering building many unstaffed service stations requiring self-service operation. These stations could be set up in numerous new locations, significantly expanding the company’s presence and providing the customer with easier access (more availability) and 24-hour service.
In the short run, this expanded presence seemed certain to give Shell a great advantage over its rivals. The move was based on an understanding of the market; many consumers want convenience. But one question worried managers: How would the market and competitors react?
Working with ACS, Shell customized a version of ACS’s competitive-strategy simulator, ValueWar™, to realistically simulate customer response in 10 market segments, as well as the cost structures and other factors influencing the moves of competitors. The result of the simulation was that Shell’s move would be very successful…unless competitors chose to respond rather than to sit idly by as Shell captured market share at their expense. The managers’ conclusion: Probable success for Shell in the short run (it takes time to react); probable failure in the long run (competitors don’t like to lose).