Online Content

1. Milling, Peter M., "Learning and Understanding Innovation Dynamics: A Gaming Approach"

Type:
Document
Date Created:
1991
Collection:
System Dynamic Society Records
Collecting Area:
University Archives
Collection ID:
ua435
Parent Record(s):
23d738ba88f8333bc39725f9cb5bd0b8, 5d7e83a7ca6c4cd9ab0ccc8a805a7aa7, and d1cfc0fcedb4f6334f34d1ca11dcf292
Thumbnail Path Ss:
/downloads/jd473d364?file=thumbnail
System Modified Dtsi:
2020-01-02T18:46:41Z
Description:
Innovation management is a special task in several respects. Its success is essential for the survival of the firm. It deals with highly dynamic processes, and it requires a viable strategy from the very outset. Analyses of innovation dynamics have shown that market forces usually do not allow the search for a gradual approach towards a successful strategy. Frequently technology advances rapidly and the market changes so fast that no second try is possible.In such a situation, the artificial reality of a management simulator provides a powerful environment to learn about the system under investigation. It allows deeper insights into the problem situation. In its virtual world, it alleviates the development of an improved understanding of the intrinsic aspects, and leads to a better feeling for possible reactions of the market.The paper presents the coarse structure of an Innovation Management Simulator (IMS). The players represent four competing companies. At the beginning of the simulation, all offer a comparable product, no firm holds a competitive advantage. Among other policies, they can -through resource allocation for research and development - create additional, non substituting products. The product life cycles with their time patterns of profits and sales, market shares, etc. are endogenous variables, influenced by the players’ actions.The decision to develop and launch a new product and the choice of the time for market entry are strategic variables of the players. Further decisions are required to budget product and process development, pricing and advertising, capacity allocation, personnel recruitment and financing. The game is played on a quarterly basis. The decisions are fed into a System Dynamics model, and the results provide the input for a new round of decision making.