Strategic planning-scenarios
b.v.l.narayana
Sptm/rsc/brc
Definitions
• Scenario analysis
– is a process of analyzing possible future
events by considering alternative
possible outcomes (scenarios).
– Brings into planning interaction effects
of various uncertainties
– Allows identification of patterns duly
including subjective interpretations
– Forces consideration of alternatives
Scenario analysis
• Benefits
– Useful in conditions of high uncertainty
– Useful to avoid past mistakes
– Enables consideration of multiple and new
alternatives
– Improves quality of strategic thinking
– Facilitates communication of ideas
– Facilitates incorporation of multiple divergent
ideas
– Allows creation of a dynamic planning system
Scenario analysis
• Process
– Knowledge about business scenarios
• Things are known
• Things which we do not know about
– Aim is to circumscribe the possible
outcomes of uncertainties
– Aim to identify possible futures in terms
of fundamental trends and uncertainties
Scenario analysis
• Process
– Define scope
• Time frame, scope of analysis-markets, tech
• Identify changes in past –same time frame
– Stake holders-customers, suppliers, government
– Basic trends –PEST analysis
– Key uncertainties –affecting your interests—PEST
» The relationships amongst these factors
• Construct initial scenarios
– Club all positive and negatives separately or by
preparedness, likelihood,
Scenario analysis
• Process
– Check for consistency and plausibility
– Develop learning scenarios
• Identify themes strategically relevant and organize
outcomes and trends by it
• Name the scenario
– Research further on learning scenarios
– Develop quantitative models
– Identify decision scenarios
• Converge to scenarios used to test strategies
Scenario analysis
• Process
– Is an iterative process
– Scenarios are useful if
•
•
•
•
Describe generically different futures
Are relevant
Internally consistent
Describe a state of relative equilibrium
– Create
• Signposts for reality checks at points of time
• Identify hedging strategies –adjust uncertainty
• Identify shaping strategies- key to target
achievements
Scenario analysis-IR
• Trends
– Maturation of consumer
– Growing competition
– Growing economy
– Globalization
– Desegregation of services and
manufacture
– Increasing technological sophistication
– Increasing use of ICT
Scenario analysis-IR
• Trends
– Increasing demand for leisure
– Increasing emphasis on religion
– Growing conflicts
• Internally
• Internationally
– Increasing willingness to pay
– Growing Government regulation—size,
managing conflicting public demands
Scenario analysis-IR
• Trends
– Increasing homogenization of
distribution of industries
– Increasing concerns for environment
and sustainable development
– Changing power equations among
governments—trade, technology,
finance transfers
– Emphasis on de-urbanization
Scenario analysis--IR
• Uncertainties
– Globalization versus protectionism
– Competition –
• value chain migration or differentiation• In house or outsource
– Compete or collaborate among modes
• At customer level, policy level
– TAX BENEFITS –CONTINUE OR NOT
– Evolution of construction agencies
• Numbers, skills, technology
– Evolution of HR—skills , numbers
– Financial flows
• national., international
Scenario analysis-IR
• Three possible options—learning
– Globalization versus localization
– Competition –
• integration versus fragmentation
• Modal competition versus collaboration
• Competition for resources
– Government regulation
• Tax, Financing,
• Policy interventions
Scenario analysis-IR
Globaliza integrati
tion
on
Globaliza
tion
integrati
on
competit
ion
+
competit
ion
Resource Tax
Policy
fight
incentive control
+?_
+
_
_
-
-
+/-
+
++
+/-
-
+/-
-
Resource
fight
Policy
control
Index -- + positive; - negative; ? Not known
Scenario analysis --IR
• Impact outcomes possibilities
– Resource fights –costs, inability to deliver
services
– Tax incentives- loss to increase- impact bottom
line
– Globalization –increased integration, niche
segregation, networks, skills transfer
– Policy control—increase to decrease
– Competition –lobbying for policy to extreme
competition
– Integration – value segmentation to value
chain integration
Scenario analysis--IR
• Final impact possibilities
– Size of organization –
• mega to niche
• Single to networks
– Economic growth
• Low to high
• Isolated to globalised
– Competition
• Intense –innovation driven to collaborative
networks
Scenario analysis-IR
• Scenarios
– Globalised , large, value chain integrated
– Globalised , networked , value chain integrated
by collaboration
– Localized, large, value chain integrated
– Localized, networked, value chain integrated
– Mix , niche-value chain segregation,
independent
– mix, value chain networked,
Scenario analysis--IR
• Time frame—20 years
– Sign posts—
• every five years for major shifts
• Every year for impact assessment
– Hedging strategies
• Collaborate
• Develop capacities—line, training, asset production,
vendors
• Earn through non capacity mechanisms
– Shaping strategies
• Get into value chain integration
• Policy framing and lobbying representation
OBSERVE
Thanks –
any
questions
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