Strategic planning--scenarios

1. Strategic planning--scenarios b.v.l.narayana Sptm/rsc/brc

2. 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

3. 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

4. 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

5. 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,

6. 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

7. 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

8. Scenario analysis-IR • Trends • Maturation of consumer • Growing competition • Growing economy • Globalization • Desegregation of services and manufacture • Increasing technological sophistication • Increasing use of ICT

9. 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

10. 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

11. 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

12. 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

13. Scenario analysis-IR Index -- + positive; - negative; ? Not known

14. 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

15. 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

16. 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,

17. 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

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