Simulation | 2008

Strategic Innovation Simulation: Back Bay Battery

by Willy C. Shih and Clayton Christensen

Abstract

This online simulation allows students to play the role of a business unit manager at Back Bay Battery Company who faces the dilemma of balancing a portfolio of investment strategies across products in the rechargeable battery space. Players have to manage R&D investment tradeoffs between sustaining investment in the unit's existing battery business versus investing in a new, potentially disruptive battery technology. The student must also decide which market opportunities to pursue, each of which offers the student varying levels of market intelligence and differing short- and long-term payoff prospects. Students manage the investment portfolios over eight simulated years. Throughout the simulation the student is forced to address a number of challenges including timing and level of investment across both mature and new businesses, choices regarding market opportunities and inherent product performance characteristics, requirements to meet constraining financial objectives and constant trade-offs between investment options, all in the context of uncertain market information. The entire simulation can be played in 1.5 seat hours. A Facilitator's Guide contains an overview of simulation screens/elements as well as a comprehensive Teaching Note. Hardware requirements: Computer with minimum 1024x768 screen resolution, high speed internet connection (DSL / cable modem quality), Windows 2000, XP, or Vista / Macintosh operating systems, Internet Explorer 6+ / Firefox 2.0+ web browser with javascript and cookies enabled, Flash Player 9+ browser plug-in (Users with earlier versions of Flash will be notified automatically and given the option to upgrade. This is a free browser plug-in), Microsoft Excel (optional). Learning objective: 1. Best opportunities for new products are not visible early on. New applications can appear unattractive, but often represent best long-term opportunity. 2. Timing and level of R&D spending is difficult to gauge. 3. Assessing emerging market opportunities is difficult using standard approaches. 4. Balancing dual requirements for simultaneously investing in core business and innovation is challenging. 5. Constraining financial criteria and an organization's impatience for growth can make innovation difficult. Subjects covered: Competitive strategy, Military R&D, Operations, Product evolution, Simulation. Geographic: United States. Industry: Batteries

Keywords: Competitive Strategy; Disruptive Innovation; Growth and Development Strategy; Innovation and Management; Investment; Product Development; Research and Development; Battery Industry;

Citation:

Shih, Willy C., and Clayton Christensen. "Strategic Innovation Simulation: Back Bay Battery." Simulation and Teaching Note. Watertown, MA: Harvard Business School Publishing, 2008. Electronic. (2656-HTM-ENG.)