Business war games Business war gaming or business wargaming is an adaptation of the art of simulating moves and counter - moves in a commercial setting . Unlike military war games , or fantasy war games which can be set hundreds of years in the past , business war games are usually set in the present and are a relatively recent development , but they are growing rapidly . The rationale for running a business war game is that it is a tool of particular value when the competitive environment is undergoing a process of change , as it allows decision makers to consider proactively how different players can react to the change , and to each other . The benefit of teams role playing competitors and developing more robust strategies is especially notable , and can be inferred from a quote such as the one below from Richard Clark , CEO of Merck and Co . , who in an interview to USA Today said : " " I am a strong believer in if you ’ re going to develop a vision or a strategic plan for the future of a company that you have to engage the organization in doing that … it can ’ t be just the CEO or top 10 executives sitting in a sterile conference room . " " " . Methodologies . Market level . Currently there are three schools of thought about business war game , depending on the underlying philosophy of their creators : " Business is War " war games , " Business is a Game " war games , and " Business is Business " war games . The three types have accordingly , different strengths and weaknesses , and are useful for different applications throughout business . " Business is War " . Sometimes abbreviated as ' BIW ' war games , ' Business is War ' games are a direct adaptation from the military war games , and envision competitors as the " enemy " and the goal as " victory " in a market " battle " . These games are based on mathematical modeling of contestable markets , including chaos theory , random variable generation ( Monte Carlo simulations ) , and econometric modeling of demand and supply conditions . Participants ’ generated moves are fed into computer program which generates optimal solutions in the mathematical space . Not surprisingly these games come with a high price tag , and are advocated by large consulting firms which tend to work with the US military establishment . Leading consultancies in this application are Booz Allen Hamilton and - since its spin - off from Booz Allen Hamilton in 2008 - Booz & Company , focusing on the commercial sector . " Business is a Game " . ' BIG ' war games regard business transactions as a game between participants with potentially conflicting goals . BIG advocates apply game theory , a branch of mathematics to business situations with the goal of finding an equilibrium , or " stable " solution ( so called Nash equilibrium ) whereby no one can further improve on the outcome . The solution can be computed over a large space of all possible ( hypothetical ) moves of the players . A leading proponent of this type of war games is Niall Fraser , a game theorist and the founder of a consultancy called Open Options . A variant on BIG is computer simulations ’ games using simultaneous equations to solve for demand and supply equilibrium ( not a game theory solution ) . Participants input numerical values for decisions on a wide range of business investments ( in production , sales force , advertising , etc . ) , and receive a computer output of the equilibrium results . Companies providing these types of games are Mark Chussil of Advanced Competitive Strategies , 8020world Management Consulting and Jay Kurtz of KappaWest . " Business is Business " . Also referred to as ' BIB ' regard business as neither a war nor a game . The goals and tactics of war are incompatible with business goals ; competitors do not aim to defeat each other but to satisfy customers ’ preferences better than others . Government precludes total victories and cooperation is as prevalent as competition . Similarly , BIB criticizes " Business is Game " thinking on the ground that hypothetical or generic moves are irrelevant or trivial , stable solutions are not a substitute for specific , real life practical and innovative strategies for management , and computer / mathematical simulations do not approach the complexity of competitive dynamics in real markets . Instead , BIB advocates using state - of - the - art competitor analysis techniques and real life competitive intelligence to generate an in - depth profiling of competitors through role playing . The goal of BIB is predicting most likely moves by most significant competitors or other third parties ( customers , regulators ) so that strategy can be pressure – tested in the most realistic setting . The creator of BIB games is Benjamin Gilad , a former strategy professor at Rutgers University , an early pioneer of competitive intelligence theory and practice in the US , and the founder of the Academy of Competitive Intelligence . Other proponents include Seven Questions Consulting Limited . Negotiation level . In contrast to the often larger “ Business is War ” , “ Business is a Game ” and “ Business is Business ” war games , which all primarily deal with market level issues , Negotiation War Games are smaller in scope and only deal with business related negotiations . Even though the US military have long referred to the practice of ” War Gaming a negotiation ” , the term ” Negotiation War Game ” was first coined by Søren Malmborg in 2010 . Negotiation War Games ( aka . NWG ) . A " NWG " is a Business War Game conducted at negotiation level . I . e . A structured framework for conducting a preparatory Negotiation Simulation on a specific , upcoming negotiation . A Negotiation War Game is most often divided into three steps : 1 / Gather Intelligence 2 / Simulate Upcoming Negotiation 3 / Debrief and calibrate negotiation strategy . By adding Competitive Intelligence to the simulation , Negotiation War Gaming differentiates itself from normal mock negotiations and other training exercises . The act of gathering and including Competitive Intelligence on the forthcoming negotiation and it ' s parties , lets participants in the Negotiation War Game gain an in - depth understanding of the negotiation itself and the negotiation parties . The purpose of doing a Negotiation War Game is threefold ; 1 / Predicting your opponents ' next move 2 / Revealing opportunities , threats and issues 3 / Developing and testing a calibrated negotiation strategy . There is currently two schools of thought in Negotiation War Gaming : " Pure Role - Play " and " Computer enhanced " . NWG “ Pure Role - Play ” . Even though software applications can play an important role in the facilitation of a " Pure Role - Play " Negotiation War Game , the method is inherently focused on role - play simulation . " Pure Role - Play " War Games can be used to prepare for virtually all two or three party negotiations . By gathering Competitive Intelligence on the actual negotiation ( as well as the individuals involved ) an accurate simulation can be created . A client ’ s employees will then become involved in the actual War Game by acting partly as the company itself , partly as the other negotiating party . Through a series of structured simulations , a tailor - made strategy can then be developed and calibrated . " Pure Role - Play " Negotiation War Games are especially effective when preparing for Sales - and Procurement negotiations . Through more than 30 years of business usage and scientific research , the method has been shown to generate significantly better negotiation outcomes compared to other popular methods . ( Please see Application section below for references ) . In 2010 , 64 , 7 % of young US Sales - Managers Role - Played their upcoming negotiations , making " Pure Role - Play " Negotiation War Gaming one of the most used negotiation preparation techniques in North America . A leading proponent and provider of these types of War Games is Outcome Business War Games lead by Søren Malmborg . As of 2013 , Outcome ' s Negotiation War Gaming method is taught in MBA courses on negotiation at Columbia Business School and NYU Stern School of Business . NWG “ Computer enhanced ” . Computer enhanced Negotiation War Games are often Role - Play simulations aided by Game Theory in some way . Companies providing these types of war games are Mckinsey , and 8020world Management Consulting . Applications . BIW . Given the high budget requirements and long preparations time , BIW games are more appropriate for big companies ' big decisions and large budgets , such as corporate games , involving top executives with considerable staff and consultant support . Corporate games are played over major portfolio decisions such as diversification and / or divestiture moves of the parent company ( i . e . , which acquisitions to go for , which business to get rid of ) , and over longer term horizons . BIW games are less appropriate for business units , or " business " strategy decisions , as their high price tag and extensive time required from top executives are no match for small scale games with more tailored application and flexible format . To fully understand the difference between corporate games played over corporate strategy ( portfolio management ) and business games played over business strategy ( competitive strategy ) , read Michael Porter ’ s articles . BIG . Game theory and computer simulation games are appropriate for planning and decision support in industries in relatively stable state , known distributions of outcomes , and predictable competitors , as they are best suited for finding equilibrium solutions among a relatively large set of known variables ( payoffs and moves ) . On the other hand , BIG games are handicapped in rapidly changing industries , markets where surprise moves by new players is a possibility , situations requiring innovative and creative approaches , and in decisions calling for specific practical ideas rather than more generic moves ( such as raise , stay or lower prices by x % ) . Decision makers looking at war gaming should also be minded of game theory ’ s own lack of empirical support , as people seem to irrationally follow behaviors that do not result in their best outcome . BIB . Business war games employing role - playing and competitor analytical techniques are most beneficial in business strategy at the business unit , market , brands , product and project levels . BIB games have been applied with great success to new product launches , offensive and defensive moves against specific competitors ( whose response is analyzed using the advanced competitor analysis techniques ) , in organizational development ’ s ( training the next generation executive cadre ) " competitive landscape " games , and in brand revival and new market entry situations . According to participants , BIB games provide touch reality - based challenge to strategies and plans that helps companies cope with uncertainty . They are less useful in conglomerate strategy as they apply to business strategy and not across unrelated industries . BIB are also more culture sensitive , and should be applied with caution in cultures where honest discussion of blindspots is less than appreciated . The methodological superiority of BIB games over other techniques received strong empirical support from a meta study on the effectivenes of predictions of competitive outcomes using " role playing " . NWG ( Pure Role - Play ) . " Pure Role - Play " Negotiation War Games have shown to generate significantly better predictions of negotiation outcomes compared to other popular methods . " Pure Role - Play " Negotiation War Games have also been shown to ensure significantly lower prices in procurement negotiations , and greater writedowns in auditor vs . client negotiations concerning obsolete inventory . " Pure Role - Play " War Games have been used extensively in business negotiations . " Pure Role - Play " War Games are furthermore often used in politics . Negotiation War Gaming was used to prepare President Ronald Reagan for his negotiations with Gorbachev in Reykevik and Geneva in 1985 and 1986 . Presidential candidate John Kerry used a Negotiation War Game to prepare for his first TV - duel with George W . Bush in 2002 . Both President Barack Obama and Mitt Romney used the method prior to the 2012 presidential TV - duels . The NTC ( National Training Center , Fort Irwin . Ca . ) recommend that all U . S . and Canadian Army officers be trained in the method before deployment . NWG ( Computer enhanced ) . " Computer enhanced " Negotiation War Games are often used in multi - party negotiation simulations . Board Games . Board games can be used for business war games . In this case , they are war games for civilians applied with a marketing warfare analogy to a market situation . In this case , these authors talk about creative competitive intelligence .