- Organizational Alignment
- Strategic Development
- Strategic Analysis & Planning
- Business Simulation
To test a proposed critical strategy: Competitive response to current and potential future consolidation of major Tier 1 Aerospace Airframe Manufacturers and Suppliers.
The largest of the Aerospace firms, referred to as Tier 1s, supplying to the airframe manufacturers, were consolidating. These Tier 1s were acquiring / partnering in unprecedented ways resulting in a rapidly changing competitive landscape in the industry. AlliedSignal Aerospace, a Tier 2 supplier to the Tier 1s and airframe manufacturers, had the goal of interacting effectively and maintaining their strategic position with the newly integrated Tier 1s while maintaining the ability to deal directly and more profitably with the airframe manufacturers.
The leadership team at AlliedSignal Aerospace had developed a strategy for making alliances with certain Tier 1 and competitor Tier 2 companies, acquiring two Tier 2 companies and as many Tier 3 companies as possible.
Collaborating with the Strategy Department, ECI designed and conducted a three phase “war game” business simulation to test their proposed strategy, uncovering flaws in the analysis, unintended consequences, and hypothetical potential surprise moves from competitors. The war game simulation was based seven years in the future, on the assumption that the plan was executed successfully, creating a future history of the company. The war game was hosted in a confidential location over a ten day period. All AlliedSignal Aerospace strategic business unit presidents plus 16 high potential directors participated, including the president of the company during summation. A divisional CEO-level leadership team analysis of the first two phases was facilitated to review and revise the proposed strategy based on the outcome of the business simulation.
Phase 1: The results of the proposed strategy test revealed critical nodes in the strategic decision process for AlliedSignal Aerospace. A number of minor business issues arose if competitors were to behave as expected. However, through ECI’s structured cross-examination process it was discovered that if certain competitors took paths that were not in line with their historical norms, it could be advantageous to their competitive positions and cause major commercial damage to the company.
Phase 2: The future history strategic exercise revealed that successful execution of the strategy could not be accomplished on the originally proposed timeline and that there were two significant areas of unintended consequences. The first was the isolation of one of AlliedSignal Aerospace’s business units, and the other was the probable further consolidation at the Tier 2 and Tier 3 levels of suppliers that would be the most likely reaction by competitors to the AlliedSignal Aerospace strategy.
Phase 3: The participants revamped their strategy to mitigate some of the competitors’ possible reactions. They also added a divestiture strategy that, essentially, took advantage of the probable isolation of one of their business units. The company’s aggressive acquisition and alliance program remained the core of their business strategy.