Modeling growth strategy in a biotechnology startup firm

Morecroft, J. D. W., Lane, D. C. ORCID: https://orcid.org/0000-0001-6658-7041 and Viita, P. S. (1991) Modeling growth strategy in a biotechnology startup firm. System Dynamics Review, 7 (2). pp. 93-116. ISSN 0883-7066

Abstract/Summary

The top managers of a biotechnology startup firm agreed to participate in a system dynamics modeling project to help them think about the firm's growth strategy. The article describes how the model was created and used to stimulate debate and discussion about growth management. The paper highlights several novel features about the process used for capturing management team knowledge. A heavy emphasis was placed on mapping the operating structure of the factory and distribution channels. Qualitative modeling methods (structural diagrams, descriptive variable names, and friendly algebra) were used to capture the management team's descriptions of the business. Simulation scenarios were crafted to stimulate debate about strategic issues such as capacity allocation, capacity expansion, customer recruitment, customer retention, and market growth, and to engage the management team in using the computer to design strategic scenarios. The article concludes with comments on the impact of the project.