Business Dynamics for Strategic Development

摘要

This paper examines the role of system dynamics in corporate strategic development. A framework for strategic development is introduced based on an analogy with feedback control. The strengths and limitations of the analogy are discussed. The basic framework is then extended to include strategic rehearsal as a 'virtual feedback process' at the corporate level to test and modify strategic initiatives before and during implementation. System dynamics is one effective way to provide such virtual feedback. An example is given based on a modelling project for a company in fast-moving consumer goods. The purpose of the project was to investigate the strategic implications of a new product launch in a highly competitive industry. There is a description of how the model was conceptualised with the management team and a review of simulations that were helpful in assessing the strategic initiative. The paper concludes with comments on the insights from the project.