Using hybrid modelling to simulate and analyse strategies

Abstract

Purpose This paper aims to explore the applicability and strengths of proposing the three-paradigm hybrid simulation (HS) approach to developing and analysing strategies. The objective of the modelling effort is to conceptually illustrate its use in strategic planning by combining with the threat-opportunity-weakness-strength (TOWS) matrix, which builds a bridge between strategic management with the operations research community. The authors also aim to introduce a modelling framework to help model designers to apply HS to their own business issues. Design/methodology/approach The paper presents a process to develop a HS model associated with the development of strategies using the TOWS matrix. Findings After developing the model and testing four strategies, the best option for the supermarket to increase market share and sales is implementing the strength–opportunity strategy, which involves online shopping to adapt to the digital world. Research limitations/implications First, some modelling assumptions are used to simplify the development process, but they need further validation. Second, the real data collection is limited. Third, the personal learning edition of the simulation software is not a comprehensive version and has some limitations. Practical implications The hybrid model and the scenario planning introduced, in this study, could allow decision makers to rehearse the potential strategy before actual implementation. The framework is easy to implement to other business and industry. Originality/value This study links HS with strategic management, which has not been performed previously and evaluates the capability of HS in strategic planning. The functionality of the modelling platform has been tested for simulating a completely dynamic system.