Wargaming · Competitive Simulation
Business Wargaming
What is wargaming?
- Break the assumption that competitors stand still
- The key is preparing background information so participants can fully commit to their roles
- The output is a list of vulnerabilities, not a win or a loss
The question in strategy review meetings changes. Normally the question is 'Is this plan good?' After one wargame, it becomes 'Does this plan survive the opponent’s moves?' The slide with the revenue target and marketing budget may stay the same, but it becomes clear that those numbers rested on the premise that 'the competitor won’t cut prices by 10%.' Putting implicit assumptions into words is the real payoff, and from then on the team also prepares a contingency plan for when those assumptions break.
There are two formats: two-team head-to-head and multi-party. The two-team format, with just our team and a competitor team, runs in half a day and suits validating a single product launch or pricing decision. The multi-party format adds customers, distributors, and even regulators; it needs four to five teams and a full day, and is used for decisions that change the business structure. Two to three rounds of 40 to 60 minutes each is realistic. It is easy to confuse with a red team review, but a red team attacks our plan once and stops, whereas in wargaming, the opponent answers our response, so the exchange goes back and forth.
The game is won or lost in preparation. Put the people who know the competitor best on the competitor’s team: the sales rep for that channel, or experienced hires who came from the competitor. If you pack these people onto your own team, the opposing side ends up empty. Public information is enough for source material: filings, job postings, and interviews with distribution channels, compiled into a pack of around 20 pages. But fix the judging metric to a single measure before the game starts. If you don’t decide whether it is market share or the number of new contracts, each round will bring out whichever number suits the presenter, and the judging turns into a debate.
The most common failure is the competitor team acting like people from our own company. If they judge by our common sense instead of the rival’s cost structure or its leadership’s tendencies, every move they make falls inside the range we had already anticipated. The result is the same if the CEO sits in the referee’s seat. The competitor team quietly dials down its attacks, our plan wins every round, and it gets stamped 'validated.' Then six months later the real competitor plays a card nobody raised in the wargame. Not only is there no countermeasure, but having run a wargame becomes the very reason for complacency. The exercise is only complete when, afterward, each vulnerability is assigned an owner and a deadline and fed back into the plan.
John KimInstructor John Kim, author of B2B Marketing Design and CEO of Nanum Consulting
Ara LimSpecialist in global leadership, AI, and business communicationMilitary wargaming techniques were adapted for business strategy starting in the 1960s. Consultants have long used the method to address the limits of planning that treats competitor responses as static.
Consider a hypothetical case. Company A, a home appliance maker with 620 employees and annual revenue of KRW 240 (≈ US$1) billion, planned to launch a new premium water purifier line in 10 weeks. Market leader Company B, a large corporation, held a 45% share, and rumors were circulating that a low-cost Chinese brand would enter the Korean market. The launch plan had already passed three rounds of review, but the CEO ordered a one-day wargame, saying, "There’s no way Company B will just sit still, and there isn’t a single line about that in the slides."
- The strategic planning team lead organized 24 people into four teams. The Company B team got one experienced hire from Company B and three salespeople from the appliance retail channel, and the lead set one rule: "Today, don’t take the company’s side."
- During two weeks of preparation, the team gathered Company B’s public filings, its rental fee adjustment history over the past three years, and 12 interviews with retail sales staff, then circulated an 18-page briefing pack to each team.
- In Round 1, our team presented a premium plan at a monthly rental fee of KRW 39,900 (≈ US$30). Company B’s team lead skipped the price cut and played a different card: a six-month extension of free care. "We won’t cut prices. We’ll stop cancellations instead."
- The referee was not an internal executive but an external facilitator, who judged outcomes by a single metric agreed in advance: “new contracts in the first three months after launch.” The result was 62% of target.
- After two rounds, the weaknesses were clear: our plan relied solely on bringing in new demand, and had no way at all to win over Company B’s existing customers.
- The head of marketing delayed the launch by three weeks and added a trade-in program for competitors’ products. Seven months later, Company B did extend its free care, but a response was already in place, and new contracts over the following three months closed at 108% of target.