- New product design in a high-technology marketplace
Our client was an intending provider of new telecommunications services to
both consumers and business, and wanted to prioritize different bundles of
product features for launch and early phase operations. The key challenge
was that the market environment was highly uncertain: technology
capabilities were advancing, customer preferences were changing as the
technology changed, new competitors were emerging, and falling costs meant
new market segments were becoming adopters.
We created a simulation model of the marketplace, using data from a conjoint
survey to map the customer preference landscape. The model enabled the
exploration of alternative market development scenarios (market
trajectories), under different assumptions as to technology, competitors,
and demand. The relative advantages and disadvantages of different
product-feature bundles in terms of market share, penetration of key target
segments, costs of provision and growth of revenues, were then assessed
under these different market trajectories. This analysis then enabled the
adoption of a segment-specific deployment plan for product-features, which,
on balance, best met the multiple criteria of the client.
- Upstream supplier offer design
Our client was a provider of a processed food commodity to western consumer
marketplaces, using agricultural commodities purchased in the developing
world. They wished to increase the number and diversity of raw material
suppliers in order to reduce the risk of disruptions in the supply network.
In order to attract new suppliers, a range of alternative purchase offers
were proposed, aimed at attracting different supplier-segments against
various offers from competing purchasers.
A multi-agent model of the supplier eco-system was created, with software
agents representing different suppliers and competing purchasers. Supplier
agents in the model were able to compare and assess independently the
competing purchase offers they received from downstream purchasing agents,
who were in turn able to modify their offers as the market evolved.
Calibrated with information collected from focus groups of suppliers and a
market research survey, the model also allowed for networks of influence
between suppliers. The analysis undertaken with the model then supported
the selection of a subset of offers, which would be successful in attracting
target suppliers and robust against competing offers.
- Timing of technology transition
Our client was an existing provider of telecommunications services to both
consumer and corporate customers. The launch of a new infrastructure
technology would mean that the company could provide many additional
services to existing customers and attract new customer segments. The
company had therefore already decided in principle to transfer its
operations to the new technology. The crucial question, however, was
timing: transition too soon, and the company would not be able to take best
advantage of falling equipment prices; transition too late, and the company
may lose potential customers to competitors already operating with the new
After an analysis of the technological, operational, competitive and
customer-demand factors likely to influence the success of the transition,
we constructed a simulation model to explore alternative future development
scenarios in this business environment. The model enabled an impact
analysis of alternative transition-timings, the advantages and disadvantages
of each alternative, along with a business case/RoI analysis for selected
alternatives. The main value of the model was in reducing the complexity
of the decision landscape, so that the company's executives could quickly
understand the consequences of the main alternative timings in sharp relief,
and then choose between these alternatives using standard RoI criteria.