You’ve probably heard the term ‘generative AI’ excessively this year. Tools such as ChatGPT, DALL-E 2, Midjourney, and Stable Diffusion allow anyone to create websites, generate advertising strategies, and produce videos promising competitive advantage as well as strategic business model innovation.
At The Value Department (TVD), we have a strong focus on exploring ways to assist our clients in making strategic decisions faster and capitalizing on the benefits of emerging AI technologies. Recognizing the significant impact it brings, we are constantly looking ahead and developing next-generation strategy services to cater to their evolving needs.
So how exactly does AI apply to strategy development? Can machines really automate it, or can they augment it?
A McKinsey survey 1 reveals the limited adoption of AI in strategy. Only 7 percent of respondents to the survey about the use of AI say they use it in strategy or even financial planning, whereas in areas like marketing, supply chain, and service operations, it’s 25 or 30 percent.
Indeed, we understand that strategic decisions carry substantial implications for organizations. While AI may not directly determine the optimal strategy, it can certainly assist executives in the foundational elements of strategy development.
Incorporating AI at the strategy development stage has the potential to significantly enhance outcomes. Here are a few examples:
Data Analysis and Insights
AI can play a crucial role in analyzing vast amounts of data from various sources, including market trends, customer behavior, and competitor intelligence. By leveraging AI-powered analytics, organizations can gain deeper insights and uncover hidden patterns that inform strategic decision-making.
Scenario Planning and Risk Assessment
AI can assist in scenario planning by simulating various what-if scenarios based on different market conditions, regulatory changes, or industry disruptions. This enables organizations to assess risks and identify potential opportunities, leading to more robust and adaptive strategies.
Competitive Intelligence and Market Monitoring
AI-powered tools can continuously monitor and analyze competitor activities, market trends, and consumer sentiment. By harnessing AI to gather real-time data and perform competitive intelligence, organizations can proactively respond to market dynamics and gain a competitive edge.
Strategy Optimization and Execution
AI algorithms can optimize strategic choices and identify the most effective courses of action. Through machine learning and predictive modeling, organizations can refine and adapt their strategies in real time based on evolving data, market conditions, and customer preferences.
Resource Allocation and Optimization
AI can assist in optimizing resource allocation across different initiatives and projects. By analyzing data on cost, resource availability, and performance metrics, organizations can make more informed decisions on how to allocate their resources effectively and achieve strategic objectives.
What’s next?
Wondering if your industry or organization could strategize with AI-powered tools?
In our next blog, we will deep dive into industries that can benefit the most.
And yes, a generative AI tool has supplemented our critical thinking for this blog. I’m sure you know which one!
Chanmeet Kaur
Driven by curiosity and thrive for results.
