Workshop: Competitive Wargaming and...

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Gro

up2015 Organizational Intelligence Forum

December 7-8 • San Francisco, CA

Workshop: CompetitiveWargaming and Simulations

Develop situational awarenessof competitive position

December 8, 1:00pm

View presentation online at:

https://jpkgroupsummits.com/attendee

Tim Smith, Director – Aurora WDCTim specializes in designing business wargames for a broad range of client companies

across the globe. Tim’s broad background in Wargaming comes from his extensiveexperience in the U.S. Army Intelligence community, where he designed, developed

and implemented numerous joint-service military training exercises. Tim also spent 13years working in the business sector where he has conducted over 200 wargamingsessions for Fortune 500 companies. Tim has successfully trained facilitators from

companies such as 3M, Amgen, Dow Corning, HP, Kimberly-Clark and Medtronic to runtheir own games internally. Tim earned a B.A. in Business Economics from the

University of California, and an M.B.A. from the Peter Drucker Graduate School ofManagement, Claremont Graduate University. He has also completed his Juris

Doctorate at Loyola Law School in Los Angeles, California.

AuroraWDC.com MAKING THE COMPLEX EASY TO UNDERSTAND 800.924.4249

Business Wargaming


Your Goals --- My Goals

Your Goals… My Goals…

When is a game appropriate?

Understand what makes a good sponsor

Mechanics of the game

Key Concepts

Logistics and Timing

Scoping Document

Let’s take her for a spin…


Ch23.

3

Two Types

Builds Capability

- Uses a generic business scenario to educate managers in strategic decision-making.

- It will put the participants in a safe environment.

- Participants will gain experience in radical decision making.

- The experience will promote team building.

Builds Specific Response

- Explore and test future competitive strategies in order to discover any weaknesses in a plan and to identify possible consequences of plan adoption.

- Is tailored to the needs of a particular firm.

- Is used to facilitate the firm’s strategic planning process.

- Participants will also gain experience.

- Team-building exercise.

3


Pick a Straw, Any Straw…

Any of the popular wargaming methodologies can be

adapted to successful games. The key is to pick one and

stick with it, until you are comfortable with not only

managing the various nuances of the selected process,

but also in training your Facilitators to do so as well.

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5

Supports All Planning Levels

Vision, Mission, &

Purpose

The Strategy

Operational Level

Tactical Concerns

α The reasons for which we are in this business

α What we value in the bigger picture

α Which stakeholders are important to us and why

α How do we plan to satisfy our stakeholders?

α Which goals, markets (scope), and resources?

α What will be our basis for competing?

α Links our strategy and tactics

α Focuses on key market and services positions

α Specific objectives … e.g. sales or market share

α Operationalizing plans at the front-lines

α Varies from situation to situation

α Nearest-term targets, how we make money

5


Wargames Bring Value

Shared experience learning and team building

Focus on assumptions and “what ifs”

Tangible deliverables


Why do cars have brakes?


How you answer that question reveals a great deal about how you approach both Risk and Reward.

Most people would say brakes

help slow you down…

Consider that brakes allow you to

go faster!

Why do cars have brakes?


The Power of the Process

Simulations bring

to surface ideas

that are not

apparent when

looking from the

inside out…


Represent all Critical Stakeholders

“The Market”

Customers, Government, Channel Partners, etc.

Our Activities

From Strategy --- Operations --- Tactics

Our Competitors

Direct, Indirect, and New Forms

Our level of success in the Market is determined by all 3 lines of force. No matter how successful we are in implementing our strategy, the actions of market externals and all forms of competition will impact our performance.


The competitive nature of the process drives to Deliverables


A look at the Teams in Action

The Home Team Competitor Team

Market Team

Facilitators


Silver Bullet Analysis - Example

Silver Bullet Analysis Worksheet 1.1

Consumer ABC Hospital Network

Customer Need / Want Competitor Status Codes

Notes ABC XYZ ACME Widget

Economic Value

1 3 1 1

Clinical Evidence

1 3 1 1

Overall Cost

2 2 2 2

Safety

3 2 0 1

Service & Support

1 2 2 1

Faith in Company 2 2 1 1

CustomersÕ Needs and Wants

CompetitorsÕ Weaknesses

Our

Strengths

Scoring codes:

3 = Better than anyone

2 = As good as anyone

1 = Not good enough

0 = Lack capability


Business Model Canvas


Probability

Potential Impact Code

-3

-2

-1

0

1

2

3

0% 25% 50% 75% 100%

6

4

28 36

24

22

10

27 25

33

5

19 20

7

18 15 29 9

13

12

16 8

1 30

2

3

34

Probability / Impact Grid The event / scenarios in the blue-shaded

area were Determined to have the greatest

Potential impact, and the highest likelihood

Of occurring.

The diagram to the right is the Probability/Impact Grid exercise. This exercise allows the Participants of the Wargame to discuss, as a group, the various competitor moves and market events that surfaced during the simulation, and decide what the probability of them occurring really is, along with the potential impact they would have on the company if they did. The circled numbers represent where the group felt the event/scenarios fell out. Those that fell in either the blue or red box have the highest impact, along with the greatest likelihood of occurring. The Sponsors then meet to decide which they want to explore further in the Planning Round. Those filled in yellow were the ones selected for the Planning Round.

Although Event #3 was rated by the group as having a devastating impact and a high probability of occurring, the Sponsor felt that there was little

the organization could do regarding this issue, given their resources.

The event / scenarios in the red-shaded Area were determined to have devastating Impact, along with a high likelihood of occurring.


Opportunity Assessment

0

10

Segment 1 Segment 2 Segment 3 Segment 4

Mkt Oppty

Home Comp 1 Comp 2

Buy / Build / Transform:

Competitive Advantage / Differentiation:

Target Market & Potential Size:

Critical Success Factors: Reduce the key phase lines that

must be crossed to a few bullet points.

Key Stakeholders (including competitors):

Value Proposition (no more than 15 words! What

explicit need/want are we addressing?):

<Market Oppty Title here>


Decision / Selection Map


After Action Sample: Key Issues and Outcomes

Key Issue Competitor Will… Our Response

Defend lack of

customer

service data

Competitors message this issue

to mitigate launch

• We will set up feedback loop for representatives and

customer account team to gauge impact of lack of time-

series data at launch; share best practices on how to handle

• Develop rep response indicating that several other recent

product launches did not have time-series data at launch

Messaging • Tout their longevity in the

product class.

• Claim our product is “too

radical,” untested, barely

passing regulatory review

• 5 successful beta clients

• Rivals products have had negative returns for 5 years

cumulative

• Educate on what is required and how to manage

• Can utilize heavier social media communication, particularly

via our large FaceBook and Twitter presence

Competitor

Increase in Ad

Spend

We expect that the incumbents

will increase their spend in an

effort to lock up key institutional

clients

• Leverage consumer demand for new retirement options

• Maximize the impact of the news event around the

availability of a new class of product

Feet on the

Ground and

Selling

We expect at approval that there

may be some financial options

data that we won’t be

permissible in promotion.

• Right-size the new prods team to a competitive size

• Via the Blue Guide can we share product data that is still

under review

• Ability to communicate regularly with speakers via intel

network wiki on relevant product data

The issues highlighted below were derived from our Contribution / Feasibility Grid exercise.


Stock Market Simulation

Team Start

Price ($)

End of Rd

1

End of

Game

Delta (%) Place

MDT 64 72 81 25% 2nd

Google 128 114 107 -19% 5th

Apple 640 680 712 8% 3rd

WebMD 24 26 22 -15% 4th

BioHeart 22 25 28 28% 1st

Intel 78 68 62 -20% 6th

Each Round the Teams will invest in each other, based on their

Perceived performance, relative to the market. The “Winner”

Will be the team that shows the greatest gain in share price. The

Team that invests the best, will also be rewarded.


buckdawson.blogspot.com

Attributes of a Good Facilitator

• Good presentation skills

• Creating a logical set of activities to address fundamental business problems

• Have the Power to make it happen

• Are not afraid to rattle a few cages

• Have the Power to take action post-game

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Planning Horizon Considerations

Outline scope and objectives

Secure team buy-in, budget

Prepare RFPs, vendor selection and POs

Secure meeting facility and food service

Hold the date on calendars

Designate team leads

Conduct kick-off meeting

Customize exercises and templates

Conduct internal and external interviews

Prepare/review briefing book / pre-reading assignments

Make team assignments

Distribute pre-reads

Schedule Wargame After-Action Report

2+ months leading up to Wargame:

Confirm attendance and revise teams if necessary

Meet with team leads to address questions and revisit expectations

Review meeting logistics room set up, audio-visual/computer equipment, name tag/placards, etc

Week of

Wargame:

Conduct post-Wargame debrief with lead/sponsor and vendor

Confirm time and attendees for After-Action Report

Review vendor final report (may include multiple iterations)

Secure and store all Wargame enduring materials

Transfer and integrate learnings into strategies and tactics

One to two weeks

after Wargame:


Access to the Commander

The one area that the military does better than business…

Running a successful war game will not only grant you the magic key during the development phase, but it will also keep You in the loop post-game.


Your Role in Defining Purpose and Scope

Provide guidance on what the purpose of the game will be, taking into

account the needs of your Sponsor and other key stakeholders

Come to the Sponsor prepared to answer questions on new entrants,

potential M&A in the relevant market, and a good understanding of

potential disruptors

Limiting the scope will not only reduce your workload prior to the

game, it will create much more focus on the key issues your Sponsor

wants explored

Most importantly – Ensure that the game is designed to deliver

executable strategies and tactics that can be measured


It’s all about the Intel

Most strategic planners understand that good intelligence

comes before effective strategy. It is your job to remind

them of it.

Good intelligence product pre-game is absolutely vital.

A lack of proper preparation Can lead to more harm than good.

Garbage in, Garbage out!


Who Should Participate?

A broad mix of functions is most effective

Identify and include key influencers within the functional areas –

those whose buy-in will help when it comes to implementation of

the ideas surfaced during the game.

Those who best understand the

relevant market, and have an open

mind to the outcome

Anyone who can

Champion the planning activities post-game


Ch23.

26

Process


Ch23.

27

Examine the Process

Decision Launch Actors Prep Play Insights

Is a Competitive Simulation the way to go?

α What do you hope to achieve by running a CS?

α Assess the time horizon, level of uncertainty, intelligence gaps

α Can be valuable for team building or rehearsing a strategic move.

α Assess the availability of resources (including human and time)

α Generic CS are often good for first time

α A longer, tailored CS will be most beneficial for testing a complex situation.

27


Ch23.

28

Launch Actors Prep Play Insights

Getting a Competitive Simulation off the ground

α Commitment from Senior Management

α You will need to select a team to design your CS scenario. Think through your KITs carefully.

α Team must (1) get the basic CS design settled, (2) decide what the objectives/scope will be, and (3) develop a plan, schedule, and budget.

α The team needs to buy and/or design the CS.

α What are objectives for the CS process?

Decision

Examine the Process

28


Ch23.

29

Actors Launch Prep Play Insights Decision

Who to Invite:

α Objectives and scope of the game will point to who should be involved.

α The facilitator and umpire are only two persons but are very critical to the CS.

α Each team should be carefully chosen to include members from a variety of areas (departments and offices) and from a range of seniority.

Examine the Process

29


Ch23.

30

Prep Launch Actors Play Insights Decision

Preparation for Your CS

α Most time consuming part of the design process.

α Players will need comprehensive background information.

α Decide how teams will communicate.

α Players will need training.

α The final important preparation is the physical set up of the space(s).

Examine the Process

30


Ch23.

31

Play Launch Actors Prep Insights Decision

Playing it Out:

α Two days is common, run as a series of ‘rounds’ representing a time period. Rounds are usually 2-4 hours.

α Teams have limited time to prepare action, teams will submit their plans to market team.

α The allowable actions will then be fed into the “software”.

α Each team receives limited feedback about the actions of the other teams.

α In-game press releases used to change game parameters.

α Have administrative and technical support available.

α The outcomes should be recorded.

Examine the Process

31


Ch23.

32

Insights Launch Actors Prep Play Decision

What, So What… NOW WHAT?

α Players must be debriefed.

α Outcomes need to collected and organized into a meaningful ‘after-action or after-game report’.

α Once the report is complete it must be followed up and the insights gained during the CS should be acted upon.

Examine the Process

32


Wargame Example - Strategic

Ch23.

33

Industry Consumer Products

Company size Fortune 500

Planning level Strategic

Wargame Purpose Company was looking to increase throughput from their R&D unit, which

was not keeping pace with competitors on launching products.

Wargame Outcome The wargame showed that it wasn’t just one problem that was slowing

things down. As expected, the company’s risk profile played a part.

What also became apparent was that R&D had no clear reporting format

and ended up working on many projects that were either not likely to go

to market, or were pet projects with little or no market opportunities.

Understanding who their true stakeholders were, the BUs, was a key

learning that lead to change.

Improve ROI of our R&D

Determined our risk profile was substantially more conservation than our competitors, and that this was unexploitable.

Consolidated R&D under the corporate umbrella, ending internal conflict for resources and reducing inefficiencies.

Group consensus on using consistent measures to track market opportunities and consumer trends.

Deliverables

Purpose


Wargame Example - Tactical

Ch23.

34

Industry Pharma/Biotech

Company size Fortune 500

Planning level Tactical

Wargame Purpose Company was launching a product with new MOA into a crowded market.

They were looking for ways to counter messaging from existing

competitors before they launched. They also wanted projections on how

long it would take to capture significant share.

Wargame Outcome What the game showed was that it was unlikely that their new product

was going to displace any of the existing products, given the safety profile

and demonstrated efficacy. They were unwilling to play with price too

much, and decided to delay launch.

The competitor that “won” the game had production issues in the real

world, and this lead to the company purchasing the “winning” product at

a bargain.

Prepare for launch

Determined customer was more price sensitive than previously thought.

Wargame “opened eyes” about home team being significantly behind competitors in terms of safety and efficacy.

EWI tracking set up because of the game allowed them to respond quickly when chief competitor ran into problems.

Purpose

Deliverables


The Power of the Process… And what it Means for You

1. You allow the Participants to get into the mind of the

entity selected and role-play their best interests

2. Through simulation, you define several valid

market scenarios that can be used to generate

action plans, contingency plans, or intelligence

missions

3. Reinforce how important it is to use market data

and competitive signals to adjust your strategy

4. The game is itself a Decision Tree that you can

replay at your leisure as the real world develops to

further explore outcomes from the exercise.


Additional Advice

1. Beware of mission creep as it relates to the scope of the game

2. Resist the temptation to include outsiders as Participants

3. Seize the initiative post-game

4. Further develop the relationships you made during the pre-game work, and the wargame itself.


Questions?

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Doc Box, Inc.

Industry Overview

1. Doc Box Inc. is one of the leading companies in the “Mini-Health Center” industry. It takes a retail / consumer approach to minor healthcare issues in an effort to create value for both its customers / patients and for small businesses in the local areas where it operates.

2. Companies in this industry offer a combination of medical-related

products and services to a very local community, usually from a storefront location.

3. Many of the Mini-Health Centers are beginning to expand from their

“traditional” retail business model and starting to integrate professional services, such as health monitoring, medical diagnostics, labs, x-ray, and affordable group insurance programs targeted to small businesses for wellness and ancillary care. In an effort to be a “one-stop” healthcare shop, there are many other business models being tried in flagship stores throughout the country, such as non-traditional medicine offerings, health food stores, juice and smoothie bars, as well as many other products that have not traditionally been associated with the pharmacy industry.

4. In some cases, the center or clinic is “standalone”, in that it is not part of

a larger facility. It might be located in a strip mall, next to almost any kind of retailer. However in others, it is part of a large pharmacy, e.g. CVS “Minute-Clinic”, Rite Aid, and Walgreens, or smaller pharmacies within Mass Merchandisers / Superstores / or Warehouses such as a Wal-Mart, Target, Costco and Sam’s. In a few cases, the competition comes from large GPO (Group Purchasing Organizations) or cooperative Medical systems as their community outreach branch and a way to obtain referrals into their specialty clinics and hospitals.

5. In any case, it offers a broad range of services, including basic primary

medical care, X-rays, physical therapy, diagnostics, wellness consulting, influenza or other shots, blood pressure testing, etc. (Laboratory services, Occupational and Speech rehabilitation & therapy, travel and preventative medicine, Hearing and Vision services, minor emergency services )

6. Most also carry a limited range of medical-related products including

pharmaceuticals, supplies, and prosthetics. Some also rent devices such as crutches, wheelchairs and different types of monitors. (Wound Care supplies, Diabetic Care supplies, Orthopedic aids, equipment for occupational and physical rehabilitation)

7. Almost all successful clinics have the ability to maintain electronic medical records and when appropriate to call on centralized support or medical advice on-line. (Advanced efforts that place them in the introductory realm of e-medicine / tele-medicine)

8. The typical unit’s staff consists of four to eight full-time and part-time

physicians (both GPs and specialists), several LNPs (Licensed Nurse Practitioners), nurses (Physical, Speech, and Occupational Therapists, Audiologists, Physician Assistants, LPNs –Licensed Practical Nurses, Medical Assistants, Radiology Technicians, Phlebotomists, and Laboratory technicians, Orthotics Technicians, Orthopedic Technicians, ophthalmic technicians) and technicians as well as medical records and other administrative personnel. This might seem to be a large number of personnel, but it is necessary if the unit is to provide 24-7 coverage. (To add to the complexity, some of these contract specialists are available on an on-call basis – e.g. Radiology Technicians, orthotic technicians. Some are merely there certain days of the week as ancillary service providers; such as Physical, Speech, and Occupational Therapists, as well as Audiologists, Ophthalmic technicians, and Chiropractors. They essentially rent space to provide services.)

9. The industry traces its roots back to the 90’s, when major drug chains

started to provide blood pressure testing equipment as a free service, and then began to offer flu shots. Of course, many hospitals had already opened small pharmacies within their facilities.

10. However, the real birth of the industry occurred in late 2003 when a group

of doctors formed Doc Box, Inc. to exploit a number of trends they had observed or anticipated. These included, for example:

The closure of many hospitals, especially in lower income, urban

areas Shifting of the primary care role to Allied Health Providers

(Physician’s Assistants, Nurse Practitioners, Pharmacists, etc.) instead of Doctors.

The aging population with limited health insurance The growth of e-health / Tele-Medicine

The need for small companies to be able to provide affordable and comprehensive health insurance to their employees

Disenchantment with the poor level of service and lack of TLC “Tender Loving Care”, provided by large hospitals and HMOs.

11. Within a year, the concept was proven. Doc Box went public and began

to grow at a fast rate by opening dozens, then scores of new clinics every year.

12. However, its great success drew many other players into the business. Initially, other groups of doctors formed clinics. Then, very quickly some of the larger pharmacy chains such as CVS “Minute-Clinic”, Rite Aid, and Walgreens opened full-scale clinics within their premises.

13. By 2008, the giant box stores saw the erosion of their medical/pharma-

related business and followed the trend. By early 2010, more than 50% of Wal-Mart stores had a built-in clinic, and more are planned. In addition, there is a national trend beginning to have Allied Health Professionals, even Pharmacists prescribe and deliver cursory treatments such as injections (flu-shots) and medications for simple problems like colds, etc., to eliminate the need to see a doctor or visit an emergency room for relatively benign health issues. This has proven more efficient and thus less expensive for Insurance payers.

14. Several large HMOs as well as Local and Regional Hospital Systems

also joined the trend and began to open more local facilities.

15. Of course, many of these ventures, especially the smaller doctor-based ones were poorly planned and managed. In 2008, a major financial house entered the field, formed Allied Health Centers and began buying up failing ventures to create what is now one of the larger chains of clinics. Although it originally owned all of its outlets, it has now started to franchise a number of them.

16. Major Federal Healthcare reform legislation was enacted in 2008, giving

broader treatment and prescription powers and authority to Allied Health / Non-Physician Practitioners; such as Physician Assistants, Nurse Practitioners, and Pharmacists. Essentially, the critical national shortage of Doctors has prompted this necessary legislation to use physician extenders in a primary care role. This situation is expected to be exasperated further by the impact of the latest Healthcare Reform Act.

17. The momentum behind growth of the Allied Health Centers franchise and

the lower cost of physician extenders as primary care practitioners has led to fear and dissatisfaction among the physician stockholders of many of the smaller clinic operations, as well as among the staff of those locations.

18. Due to the trend toward longer, healthier, more active lifestyles;

especially among the “Baby Boomer” generation, there has been a surge in the Home-Health Care market. This means that some of the care that is being given at these clinics is moving to a mobile, home-based setting. The providers are starting to make “House Calls” again.

19. In addition to the labor, cost, and competitive pressures these businesses are seeing, JCAHO (Joint Commission on Accreditation of Healthcare Organizations) and OSHA (Occupational Safety and Health Administration) have begun a very serious crackdown on regulatory violations at these “Mini-clinic” facilities, based on customer complaints and pressure from larger healthcare organizations.

20. Finally, many of the larger operations are beginning to offer Non-

Traditional Medicine; such as Chiropractic, Holistic, Herbal, Homeopathic and Asian medicine services as part of their wellness continuum in these centers. This is to answer the nationwide trend toward seeking wellness and life-balance through natural, wholesome, and non-traditional medicine.

Doc Box, Inc.

1. At this point, Doc Box is organized into four geographic regions (I through IV), each headed by a Regional Vice President. Within each Region, there are three to five Areas, each of which covers one or two states, includes ten to fifteen centers and is led by an Area Director.

2. In its latest quarterly report, Doc Box announced that its quarterly sales were $125 million

and it’s after tax earnings were $5.8 million. The President’s message stressed that the relatively low level of earnings was attributed to the expenses incurred in improving the level of service and resources in existing units and in expanding to ensure the company remained the industry’s leader.

3. An overview of Doc Box’s organization is shown in the following diagram.

Only the Area-level organization for Region II is shown above. Those for the other three Regions are similar.

Competition As mentioned earlier, Doc Box faces intense competition from several different types of competitors. A brief profile of each of the top five of these within the company’s Region II is provided below. The “Annual Revenues” refer to those within the Region in 2009. Company Name LifeCare Clinics LLC (“LifeCare”)

Ownership Like Doc Box, was founded by a group of doctors with significant participation

by three investment capital firms. Has a comprehensive employee stock ownership program.

History Formed six months after Doc Box and has followed it closely in terms of services and style.

Annual Revenues $120 million

Special Characteristics

Tends to focus on up-scale suburban areas. Has often been successful in moving into areas that Doc Box has targeted just before it does.

Company Name Neighborhood Health Network (“Neighborhood”)

Ownership Owned by a major pharmacy chain

History Started as an expanded range of services in the chain’s larger stores in 2005,

and then spun out to form a subordinate company in 2007.

Annual Revenues $100 million (Health centers only … pharmacies are much larger)


Operates both in-store and standalone units. In-store units have immediate access to much broader range of pharmaceuticals than other competitors.

Company Name Health Network Corporation (“HNC”)

Ownership Owned by a large HMO

History Three small doctor-owned clinics were acquired in 2007. Many more were

acquired in the past two years.



Units tend to be located as satellites around the HMO’s major facilities. No discernable segment focus. Grew 150% compounded over past two years.

Company Name Allied Health Centers (“Allied”)

Ownership 100% owned by KKB, a major investment bank.

History KKB acquired its first group of three units in 2007. Since then it has grown through many more small acquisitions. In 2008, it formed a very experienced and aggressive team to grow by opening new units.



New units seem to be focused on a small group of fast growth segments. Offers the broadest range of up-scale services. Has recently closed down or sold off some of the weaker performing units it had acquired early. Operates a mix of company-owned and franchised units.

Company Name Metropolitan Healthcare (“Metro”)

Ownership Mainly employees with some external investors.

History Formed by a group of doctors associated with a major university-based

hospital system.

Annual Revenues $50 million Special Characteristics

Very advanced in areas related to e-health. Strong focus on preventive medicine.

Company Name Family Health Clinics (“Family”)

Ownership Family Health Foundation (A Not-for-Profit controlled by the Adamson family

trust). Gets grants from state, county and municipal governments. History First unit opened in 2008 in an inner city area. Six more opened in 2009 and

Family has announced it will open another ten to fifteen per year for the foreseeable future.

Annual Revenues $30 million Special Characteristics

Focuses on low-income families and those without medical insurance. Provides good economical basic care but few advanced services. Moving into areas where traditional hospitals have closed down. Receives very favorable media coverage. The impact of the latest round of healthcare reform has not been determined yet.

Market and Competitive Map The following is the Market and Competitive Map that Doc Box’s Business Intelligence Unit has prepared for Region II.

The segments shown refer to the eight standard segments that Doc Box has used to define the market. They represent a mix of demographic, income level and life style considerations. They are mutually exclusive and in total, cover about 97% of the total population. As the Map shows, Doc Box believes it is currently a “Shared Leader” in Region II along with LifeCare. It also indicates that there is a lot of “Room to Maneuver” (i.e. growth opportunity) in the overall market. However, there are some other aspects of the market and the distribution of competition that are causing it serious concern. For example, although Metro and Allied are much smaller than Doc Box, they appear to be better positioned in some segments that have a very high potential for growth. A company might be operating in a segment even though it does not show up on the Map. This might happen if its revenues in the segment are too small to be reflected. In this case, it will be among the “All Others” shown for the segment.

Note: During the first Round of the mini-wargame all Competitor Teams will be striving to improve their positions in the market. Once each has decided on it strategies and invested in them, the Umpires / Facilitators will update the Market and Competitive Map to determine which competitors gained and which lost market share.

DOC BOX - SEGMENT DESCRIPTION: Segment A: The Brownstones Upscale Suburban area with relatively low growth Segment B: Rx, Milk, & Bread Medium to high growth with high Pharmacy Chain presence Segment C: Healthcare-Mill Low growth with high Concentration of HMOs Segment D: Healthy Life-styling Medium to high growth with heavy influence on preventative Medicine and University Affiliation Segment E: Boomtown Shopping Place Highest growth with heavy participation from Mass Merchandisers in both the Consumer and Pharmacy business Segment F: Old City Center Very High growth in the lower end services / lower income category Segment G: Mainline Mobility Very High growth in upscale suburban areas with high percentage of upscale services Segment H: City Spa Escape High growth in the upscale services market

1

Task Suggested Time

Worksheets

1.0 Get Organized 10 - 15 -----

1.1 Situation Assessment 20 - 30 C1.1

1.2 Threat Analysis - Leadership Opportunity 20 - 30 C1.2

1.3 Market Triage & SU Investment 40 - 60 C1.3

1.5 Lessons Learned ----- C1.4

Total Time Allocated 120

Team

Spokesperson

Recorder

Timekeeper

DOC BOX Competitor Team - Wargame Assignment

2

DOC BOX Competitor Team - Wargame Assignment

Task 1.0 - Get Organized

1 Quickly scan the Wargame Assignment to see what is involved.

2. Select the following and note their names and the team name on the cover:

◆ A spokesperson to present a brief summary of the Team’s output to the plenary group.

◆ A recorder to enter the Team’s decisions and responses on the worksheet templates that have been provided.

◆ A timekeeper to keep the Team on track.

Note: At the conclusion of Wargame, pass a copy of all completed worksheets on your jump drive to a facilitator.

Task 1.1 – Situation Assessment

To start the Assignment, you should ensure that your team agrees on the “situation” that it is facing in the markets in which you

are competing. To do so, review the Market and Competitive Map and the Profiles, then use the spaces provided on

Worksheet C1.1 to answer the following questions:

a. First, consider your company’s current position in the overall market and in each of the industries identified in the Market

and Competitive Maps? (Use the “position” definitions provided in the Participant Guide.) Move on to Task 1.2 – you will

return to complete Tasks 1.1 (b) and 1.1(c).

b. What will your company’s position be in the market and in each of the key segments in two years, if it follows its existing

strategy through then?

c. Which competitor represents the most serious threat to your company in each segment – both short-term and long-term?

Where do you think they will focus their efforts?

3

DOC BOX Situation Assessment

Worksheet C1.1

Segment

Current Position

Position in 2016

Most Serious Competitor Existing/ Emerging

A

B

C

D

E

F

G

H

Position Codes: DO = Dominant SIG = Significant N/A = No current position or planned

CL = Clear Leader PR = Presence

SL = Shared Leader BH = Beachhead

4

DOC BOX

Competitor Team Wargame Assignment

Task 1.2 – Threat Analysis & Leadership Opportunity

Use Worksheet C1.2 to identify how you believe each of the other seven competitors will assess their capabilities. This will allow you start triaging the market from their perspective and develop an estimation of what will emerge as a threat and conversely what appear to be areas of opportunity to strive and maintain leadership. After you have analyzed the threat within your market segments return to Worksheet 1.1 and estimate what you expect your segment position to be in 2016 and the most serious competitor by segment.

Task 1.3 – Market Triage and SU Allocation

Use Worksheet C1.3 to decide what your team should do in each segment to execute its overall leadership strategy. Allocate SUs based on the commitment you intend to maintain within the respective segment. Leadership is a function of making decisions and allocating limited resources. The exercises to date should have prepared you to determine, based on sector attractiveness, your sustainable competitive advantage and an understanding of your competitors’ threats and weaknesses, what segments to develop leadership.

Task 1.4 – Lessons Learned

Please refer to Worksheet C1.4 and summarize a) the Key Lessons Learned from this exercise and, b) Intelligence Gaps –

what other information would you have liked to have had in a perfect world. You will be doing this from the perspective of DOC

BOX.

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DOC BOX Threat Analysis – Leadership Opportunity

Worksheet C1.2

A

B

C

D

E

F

G

H

DocBox

Life Care

Neighborhood

HNC

Allied

Metro

Family

Use the following codes:

+ = Competitor will treat this segment as a high priority, and give it immediate, concentrated attention.

0 = Competitor will treat this segment as a lower priority, and give it delayed and/or secondary attention.

X = Competitor will abandon or avoid entering this segment.

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DOC BOX Segment Triage & SU Investment

Worksheet C1.3

A B C D E F G H Total

1. Defensive – Protect Your Base in

the Segment

2. Direct Offensive – Attack

Competitor’s Base to Grow

3. Flanking Offensive – Focus on

Growth in Areas in the Segment

4. Withdraw – Get out of Segment

5. Guerrilla

6. Stay Out

Total SUs Invested By Segment

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Lessons Learned & Intelligence Gaps From The “Doc Box” Perspective

Worksheet

C1.4

#

Comments:

Wargame Scoping Document Let’s get started…

Business Unit:

Region:

Prepared by:

Date

Prepared:

Wargame Overview

Background

Situation

Please provide a brief description of the situation that suggests a Business Wargame might be appropriate.

Wargame Purposes

& Deliverables

Given the situation described above, outline the one to three basic purposes of the wargame.

Wargame Scope Please define the “scope” of the proposed wargame, using the headings provided:

Market Assessed Define the market, indication, new entrant, customer or other entity that will serve as the basis of the

wargame.

Time Horizon What time period should the wargame cover?

Entities What entities should be represented by teams in the wargame? Consider Market or Customer, Regulator, Government, Competitors (by name), Channels, etc.

Special Issues List and outline briefly any special issues that should be incorporated into the wargame. These might deal with, for example: M&A, technological developments, major social/economic trends, global events, etc.

Other

Considerations

Please provide the information requested below

Location Where is the wargame likely to be held?

Probable Dates When are the outputs of the wargame needed? Are there some specific dates on which it should or should NOT be scheduled?

Wargame Sponsor(s) Who is/are likely to be the primary sponsor(s) of the wargame … the person(s) who will authorize it to proceed?

Support Staff Are there professionals within the company available to help prepare the market, competitive, issue, or other profiles that will be used to help support the wargame?

Other Factors Please provide any additional information that will help to define the wargame.

Workshop: Competitive Wargaming and...

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