One of the core functions of competitive intelligence is determining how your competitor will react to your actions in the marketplace. Most “war gaming” exercises use Western-based decision theories to develop hypotheses about potential competitor behavior in different scenarios. These exercises, therefore, at their cores, are about how individualistic cultures react to threats or make decisions.
Aaker and Maheswaran (1997) examined how individualist and collectivist cultures react to information cues (such as word-of-mouth comments) and are then persuaded by these cues. They discovered the following:
Individualistic cultures – individuals tend to make their decisions based on their personal traits, such as levels of aggressiveness, need for control, etc. When the decisions are made, these people tend to use information cues as “sources of reflected appraisal, standards of comparison, or sources of feedback that are used to verify the correctness of their decision.”
Collectivist cultures – individuals tend to make their decisions based on their social relations, or the “good of the group.” Information cues are used to identify the likes, preferences and needs of the group, which then leads to the decision that best fits the group. These cues are essentially considered diagnostic, in that they identify (or diagnose) the best course of action. Individual traits or needs are subjugated to the desires of the group.
While competitive intelligence war games are an extremely valid exercise when evaluating competitor moves, in a global environment, the underlying cultural differences should be carefully considered.
Aaker, J., & Maheswaran, D. (2007). “The effect of cultural orientation on persuasion.” The Journal of Consumer Research. 24 (3), pp. 315-328.