Industry Analysis, Porter's Five Forces Model, and Strategic Group Maps in the Business Strategy Game Simulation Developments in Business Simulation and Experiential Learning, Volume 26, 1999 INDUSTRY ANALYSIS, PORTER'S FIVE FORCES MODEL, AND STRATEGIC GROUP MAPS IN THE BUSINESS STRATEGY GAME SIMULATION Don M. Parks, Southwestern University ABSTRACT The purpose of this presentation is to show how one can use several related theories to help students identify and understand important variables and their relationships in a reasonably complex simulation; and how that application then reinforces and enriches students’ understanding of the theories. INTRODUCTION Getting "up to speed" on an unfamiliar simulation takes quit a bit of time and effort on the part of students. Theories can be used as lenses or filters to help interpret and organize complex reality. Use of Industry Analysis, Porter's Five Forces Model, and Strategic Group Maps has helped, not necessarily in the time required, but in the level of understanding achieved in the initial "getting up to speed" phase of in the Business Strategy Game (BSG) Simulation. The theories, when later included in the strategic planning process, have further enriched students' understanding of those theories, as they were applied to dynamic, complex environments. The environmental and/or SWOT analysis section in many strategic management texts include discussions of Industry Analysis, Thompson and Strickland (1998), the Five Forces Model, Porter (1980), Business Definition, Abell (1980), and Strategic Group Maps, Hitt, Ireland, and Hoskisson (1999). In the past, cases such as the U.S. Airline Industry (Parks and Noer, 1993) has been used as the assignment in which students applied these theories. The question arose, "why not use the BSG industry," with the intent of helping students learn the theory and the simulation simultaneously? There were hurdles to overcome; ways in which the BSG environment fails to represent reality. For example, how does one deal with the threat of new entrants in a simulation with a fixed number of competitors? There have also been unexpected benefits. Within the strategic planning process, teams have reached a more complete, representative analysis of their competition. This presentation and discussion illustrates a more complete application of these theories to BSG, emphasizing the advantages and disadvantages. A sample strategic group map of the Business Strategy Game is attached. REFERENCES Abell, D. F. (1980) Defining the Business. Englewood Cliffs, NJ: Prentice-Hall. Hitt, M. A., & Ireland, R.D., & and Hoskisson R. E. (1999). Strategic Management (third ed.). Cincinnati, OH: South-Western College Publishing. Parks, D. M., & Noer, I. H. (1993). The U. S. Airline Industry. Annual Advances in Business Cases, 403-422. Porter, M. E. (1980). Competitive Strategy. New York NY: Free Press. Thompson, A. A., Jr., & Strickland A. J. (1998). Strategic Management (tenth ed.). Boston, MA: Irwin/McGraw-Hill. 236 Developments in Business Simulation and Experiential Learning, Volume 26, 1999 237 N.A. Branded Market 100 110 120 130 140 150 160 170 30 35 40 45 50 55 60 65 70 Price A D F E C B Table of Contents Volume 26, 1999 ABSEL's Historical Research Interests Back From the Future: An ABSEL Merlin Exercise for the Year 2005 The Contributions of ABSEL During the 1980's ABSEL's Contributions to Experiential Exercises in the 90's ABSEL's Contributions to Experiential learning/Experiential Exercises: The Decade of the 1970's Business Simulations - Algorithms and Model Enhancements: A 25 year Review A Study of the ETS General Field Test as an AACSB Assessment Tool and the Impact of Experiential Exercises and Simulation on Learning A Framework for Assessing the Competencies Reflected in Simulation Performance Developing A Learning Culture: Assessing Changes in Student Performance and Perception Financial Simulation Using Distributed Computing Technology Analyzing Managers' Judgements and Decisions with an Educational Business Simulation Understanding Your Business through Home-Made Simulator Development An Examination of a Reanalysis of the Impact of a Market Leader on Simulation Competitors' Strategies Applying Shocks to TE Simulations: A Demonstration Increasing Efficiency of Management Skill Assessment A Testbank for Measuring Total Enterprise Simulation Learning Developing Leadership Skills - Video Live! LEADSIMM: Collaborative Leadership Development for the Knowledge Society A Team Approach to Producing Multi-Media Laptop and Video Formatted Presentation Tinkertoys Revisited: Exploring Trust Based Relationships Overall Dominance in Total Enterprise Simulation Performance Success or Bankruptcy: The Relationship between Personal and Goal Orientation and Simulation Performance Assessing the Effects of Feedback: Muti-method and Muti-directions in Multi-pedagogical Courses The Missing Ingredients in Experiential Learning Purpose and Learning Benefits of Business Simulations: A Design and Development Perspective Building Capabilities for Change through Laboratory Simulations Modeling Innovation as a Process of Design in Educational Business Simulation The Need to Measurer variance in Experiential Learning and a New Statistic to do so Assessing Effectiveness of an Experiential Oriented Course Over Time Developing Participant Satisfaction Models of Experiential Exercises in Business Education Perceptions of Learning in TE Simulations Students' View on the Use of Business Gaming in Hong Kong Management Gaming's Lost Opportunity: Meditations about the Russian Experience and Prospects for the Future Unanticipated Enhancements in the Business Strategy and Policy Game when Running in Windows 95 Using a Business Game to Demonstrate Broad Business Concepts A New Model for Business Courses (Getting the Student Connected) Seeing the Forest and the Trees: Integrating Knowledge Using Large Scale Simulations in Capstone Business Strategy Classes Is It Here To Stay? A Roundtable Discussion of the Inter-Group Interaction Interactive Tools Used in Applying Financial Concepts Strengthening Essential Skills through a Finance Exercise: Calculation of Beta A Model of Currency Exchange Rates Understanding Currency Exchange Rates: A three-part Exercise Student Experiences in the World Intercollegiate Business Game Competition Student Experiences in the International-Collegiate Business Policy Game Competition Using Boards of Directors in Simulation Environments: Comments From Board Members Sharing Best Practices: Teaching Smarter, Not Harder Star Power: A Simulation for Understanding Power and Empowerment The Marketing Game: A Marketing Principles Simulation Alexander Islands: GSSM Tiny Business Simulator on the WWW Putting Strategy into Strategic Business Games Industry Analysis, Porter's Five Forces Model and Strategic Group Maps in the Business Strategy Game Simulation The Use of Concept Mapping to Improve Student Performance and Understanding of Strategic Management Concepts: A Comparison of Techniques Transformational thinking in the Organizational Behavior Course: The Use of Metaphor as an Assessment Tool Creation of a Virtual Learning Community for the Global Virtual Enterprise Project Inter Institutional use of Educational Resources: Joint Use of Management Simulation Games Business Insights: Theory and Practice with the Aid of a Business Simulation Progress: An Experiential Exercise in Development Marketing The ABC's of teaching the Theory of Constraints to Undergraduate Business Students Demonstrating Principles of Organizational Purchasing Behavior through an Experiential Exercise The Virtual Manager: A Different Simulation for Managing Complexity When the Rules are changing and Chaos Breeds Innovation: Recapturing the Value of Constructive Thinking and Play in Simulation Training The Pitfalls, and Potential, of Actual Events as Problem Drivers Using Business Games to teach Environmental Awareness and Green Management: The International Experience with the ENSIM Game A Review of my ABSEL-Related Work Simulation of Government: A Workshop Using GEO Creating Internet-Based Games Using Perl and JavaScript Who's on First? Exploring the Concepts of Problem-Based Learning, Experiential Learning, and Lifelong Learning Students Learn Customer Service and Selling while Conducting Research So You Want to Run an NFL Football Team–An Honors Interdisciplinary Project Supervised Internship: The Employer's Perspective Using Computer Assisted Simulation to Teach International Business Strategy: A Case of the Multinational Management Game (MMG) Multi-Cultural Experiential Learning: A Computer Simulation in China An Appreciative Stance on Diversity as We Move into the 21st Century: A Timeline Exercise to Identify Key Experiences in Good Work Relationships between Black and White Peers A Day in the Life of an Interactive, Real Time, and Internet Delivered Course: A Demonstration Comparing Internet Search Engines: An Experiential Learning Exercise Total Enterprise Simulations and the Internet: Assessing Student Perceptions and Preferences Teaching Accounting Information Systems in a Practicum Format Providing Experiential Learning in Accounting through a Field Study Payroll Project A Spreadsheet Based Business Simulation Game Computer-Behavioral Simulations Training for Project Managers Simulation Scenarios - Rationale and Illustration