"War game" pits MBA students in wireless Internet battle

In high-tech news this week, there were a few radical changes in business strategy.

AT&T and Google forged a multibillion-dollar deal to undercut a new online joint venture by Microsoft, Liberty Media, Sprint Nextel's Xohm WiMAX division and Clearwire (though the announcement was marred somewhat by the two partners immediately disagreeing about the deal's details).

Meanwhile, Paul Allen's Vulcan Capital apparently made the winning bid for the vital Block C in the federal 700Mhz spectrum auction, paving the way for a scheme to offer WiMAX wireless broadband to a nationwide alliance of regional cable companies, letting them bundle television, Internet, voice and wireless services.

For its part, Intel announced it would package its new Atom processor for handsets with a WiMAX chipset -- as it did earlier with its Centrino Wi-Fi platform for laptops -- and happily sell it to anyone.

The reason you haven't heard about any of this is because it all unfolded in a small auditorium Tuesday afternoon at the American Academy of Arts and Sciences in Cambridge, Mass., where MBA students from four business schools proposed some imaginative strategies in a "war game" to decide the future of the wireless Internet.

The annual game is the fourth of its kind, sponsored by Fuld & Co., a Cambridge consulting firm specializing in competitive intelligence for global clients. One technique the company specializes in is "war gaming," which uses a combination of two analytical methodologies, both developed by Harvard Business School's Michael Porter: the Five Forces Model, to analyze an industry and the companies in it, and the Four Corners Analysis, to examine in detail an individual's company's drivers, assumptions, current strategy and capabilities.

This year, a squad of MBA students showed up from four schools. Each was randomly assigned one of four companies. Their task was to analyze its current strategy, then propose and defend changes as needed for a future strategy, in response to a fictional but more-or-less plausible "disruptive event" proposed by the war game's sponsors.

In this case, the disruption was a fictional joint venture -- dubbed Crystal -- by Microsoft/Yahoo, John Malone's Liberty Media, Sprint's Xohm division, and Craig McCaw's Clearwire, creating a "vertically integrated media company with a totally wireless backbone" and "BladeRunner," an alternative to Google’s Android open software stack for application development. Funding would be from the Abu Dhabi Investment Authority.

A team of judges, assessing insight, accuracy, creativity and foresight, scored the students' first-round analysis and their second-round response to Crystal, and offered a brief critique at the end of the nearly eight-hour event.

AT&T was represented by students from Harvard Business School; Google, by the University of Chicago's Graduate School of Business; Intel, by Northwestern University's Kellogg School of Management; and Vulcan Capital, by MIT's Sloan School of Management. Lacking in-depth industry knowledge, the students relied in part on a thick briefing book put together by Fuld, in part on their fertile imaginations and in part on some quick thinking as they made their case and their defense in front of their rivals and the judges.