INTRODUCTION

Background of Business Strategy Formulation

Think of making a business plan like playing a game of chess. Every step a company takes is planned to stay ahead of competitors and avoid problems, just like a chess player thinks about their next move. In the past, companies would use their gut feelings, past experiences, and market research to decide what to do next, much like a ship’s captain would use stars and maps to find their way. This planning is a set of instructions to help businesses grab opportunities and handle tough times (Brynjolfsson & McAfee, 2014) [5].

The Emergence and Significance of AI in the Business Realm

Now, there’s a new player in the game: Artificial Intelligence (AI). AI used to be something we only read about in science fiction, but it’s now a big part of the business world, changing the old ways of making strategies. As explained by Brynjolfsson and McAfee in their book ”The Second Machine Age,” machines are now not just doing tasks for us; they’re also thinking, learning, and making predictions. AI helps businesses understand patterns in huge amounts of data and predict future market trends really well (Agrawal, Gans, & Goldfarb, 2022) [1]; (Bughin et al., 2017) [6]. As Davenport and Ronanki noted in 2018, companies are using AI not just in theory but in real-life situations to solve problems and change how they plan for the future (Davenport & Ronanki, 2018) [11].

Objective and Scope of the Research

So why are we interested in this? We’re like explorers, wanting to figure out how AI is changing the usual ways of doing business. This research is about getting a full picture of how AI is changing the game in business planning. We’re looking at important studies, like the book ”Prediction Machines” by Agrawal, Gans, and Goldfarb, to understand AI’s role in modern business (Agrawal, Gans, & Goldfarb, 2022) [1]. We’ll look at how some companies are using AI to get ahead and also consider the challenges and ethical issues that come with this new technology (O’Neil, 2017) [24]; (West, 2018) [23]. This research is an exciting journey into the world of business strategy enhanced by AI.