Integrating strategic thinking and simulation in marketing strategy: Seeing the whole system

a r t i c l e i n f o In contexts where competition is intense, growth is rapid, innovation is abundant, local conditions are idio-syncratic, and technological options are increasingly complex, the marketing manager needs to understand the dynamic forces that influence the structure of the industry in order to assess the market strategic value. The problems are made even more difficult when much of the information available is qualitative, not quantitative. In order to reduce endless complexities and produce manageable simplicities, the study proposes a workable systems methodology and a holistic frame of reference that allows managers to focus on relevant issues and avoid the endless search for more details, while drowning in proliferating useless information. This paper presents two cases illustrating systems approaches to marketing strategy and decision-making. The purposes are to contrast a qualitative mapping theory building approach and a quantitative group model building approach to help client groups think systemically about marketing dynamics, and to draw out implications for research and practice in marketing strategy. In a complex environment both the system itself, considered as a subset of the environment, and the agents within the system influence the industry dynamics (Lane, 1995). Furthermore, time pressure, incomplete information, unknown feedback loops, organizational contexts , and selfish motivations strongly influence managerial decisions. Inadequate decisions and subsequent actions might lead to undesired results. The problems are made even more difficult when much of the information available is qualitative, not quantitative. Computer-based system modeling offers managers an alternative tool for decision support inquiry. A growing body of research evidence from cognitive science suggests that cognitive feedback (Eden, Jones, & Sims, 1983) can be used to enhance the quality of decision processes In the decision-making literature, cognitive feedback refers to giving subjects in a decision-making experiment information about the true implications of a decision they made, in order to teach decision-makers how to do better. In this context, the term cognitive feedback refers to information about the relations between variables rather than performance outcomes (Balzer et al., 1989). Model-aided inquiry can help decision-makers comprehend the dynamics of the market and the potential shortcomings of existing or potential management actions. Modeling thus holds the potential to reduce an organization's risk of propagating or perpetuating flawed decisions (Kleinmuntz & Thomas, 1987). Modeling projects also hold the potential to clarify areas where additional research is most likely to help managers improve their …