Strategic planning-- scenarios b.v.l.narayanaSptm/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 tion integrati on competit ion Resource fight Tax incentive Policy control Globaliza tion ++?_+__ integrati on --+/-+ competit ion +++/-- 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

IDEAS OBSERVE SEARCH COLLABORATE Thanks – any questions