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Applications: Our Solution Fits
For the past decade, Priiva has focused on the application of Game Theory modeling techniques to strategic decision making. They have experience providing strategic support to companies dealing with diverse issues including stakeholder and partner management, mergers and acquisitions, labor-management contract negotiations, environmental affairs and regulations, competitive positioning, corporate and government affairs, and large-scale litigation. The principals have experience in hundreds of cases and the following represents a selection of typical engagements.
>> New Product Introduction
Priiva worked with the senior management of a large multinational manufacturer who was considering a geographic expansion and product line extension into an adjacent market. Initially, the client considered entering the adjacent market through an alliance with a selected competitor.
The Priiva process was used to determine the likely responses to that market entry strategy by the client's customers, regulators, and competitors. In this case, the analysis showed that market entry with the chosen partner would cause other players to expand capacity unilaterally and would severely damage market profitability. The analysis also showed that a better long-term strategy was for the client to partner with the market leader, rather than with the competitor they had initially targeted.
By implementing the strategy recommended by Priiva, this client was able to accurately predict limited expansionary moves from competitors. This in turn allowed them both to limit market over-capacity and to solidify their competitive position in the market.
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>> Mergers and Acquisitions (Industry Consolidation)
Priiva worked with the senior management of a large player in the information technology field. Although the firm was gaining market share, other large firms were entering the market space with potentially disruptive technology.
The Priiva process was used to model the overall industry structure including current competitors, potential new entrants, and customers. Although potential acquisitions were identified, the team was surprised to learn that no immediate consolidation would occur. They learned the current competitors and potential new entrants were fearful of initiating a cascading auction for several players in the market space.
Having this insight allowed the client time to build value in the market space, as well as time to acquire several smaller players to prepare for the inevitable consolidation.
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>> Labor Contract Negotiations
Priiva has worked on a variety of cases in the field of labor contract negotiations. These have included many specific contract negotiations as well as longer time-horizon labour strategies (e.g. 10 years).
For the single contract cases, we typically work with the corporate bargaining team to model all the key aspects of both a settlement scenario and a work stoppage scenario. For the longer-term strategy, we engage the senior executive team to model key labour issues expected and identify key potential crisis periods. In this manner, management can prepare operationally for potential work stoppages in the future.
In each case, clients have reported greater insights as a result of both the process and the specific results. In many cases, the results have been unexpected and the fullness of time has confirmed the excellent predictive properties of the Priiva approach.
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>> Regulatory Affairs
Priiva was contracted by a multinational resource company to assist them in developing a negotiation strategy with various levels of government toward the goal of establishing a new Greenfield operation. As a result of the model building exercise and subsequent analysis, the client team was able to quickly determine the key players and lever points in the negotiation and to optimize their negotiation process accordingly. The client team used the process to quickly guide the negotiations to a successful conclusion.
The client was particularly impressed by the process' ability to uncover a hidden enemy - a player they had considered helpful in achieving their goals prior to the analysis. By learning the nature of this player at an early stage in the process, the client was able to develop effective mitigation strategies for diminishing that player's influence over the negotiation process prior to actually undertaking negotiations.
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