Scenario planning – Industry scenarios

Before embarking on the discussion, t present is ane question or so we need to ask ourselves. What is a scenario? What is scenario provision both about? What constitutes industry scenario think? Straight away, a scenario is a story or a descriptive narrative about the future which aims at sketching the boundaries of the likely and it is assembled on a methodical scrutiny of diverse factors bearing in mind those alternatives which argon probable and somewhat measurable. These factors are social, political, economic, surroundal and technological.Future environment of a pr wizard business, region or insurance area could be shaped by these re eithery factors. According to the World Economic Forum, the scenarios search ternary or four dissimilar eventualities of how the world business leader look if the most uncertain and important drivers extend in different slipway. The same source elaborates foster that in force(p) scenarios are non bonny dry, uninflected descripti ons of possible future outcomes. No matter how precise they are constructed, they should likewise be well excite and highly compelling enough to engage the imagination.They argufy postulations wile at the same time lift awareness of fundamental factors and inspire participants into fresh thought about what could happen and what it would mean for them. They offer both a new perspective on events and a scaffold for positive deliberations. Scenario planning on the other(a) hand shag be apply by distributors as a gibe of charge to calculate and benefit from change. In this article, we shall briefly introduce scenario planning, its relevance in connection to distributors and we shall also look at its application as a valuable shaft in the industrial sense.As we eat utter above, that when we think of scenario planning, one great point that has to hybridize our minds is that a range of alternative futures has to be draw up into consideration, each of which is considerably diverse and varied from the present(a) operating atmosphere. It would be better to compare and oppose alternative views on how the industry whitethorn win rather than pinning ourselves on a individual forecast which we have assumed to be most probable. Scenario planning is externally oriented and therefore in truth effective at revealing increment strategies for the society as well as impending panics to its market positions.Scenarios can also help us identify the particularized external industry changes that might be cause the comp whatsoever to lose market share or margins. In his article, Scenario Planning Basics for Distributors, Fein Adam presents ways in which distributors are using scenario planning to the progress of the caller-up. Distributors, he says, should make sure that the management of their company does non erroneously presuppose that changes will non place in the future. In other words, they should explore all the possibilities the company can face and , not only that but, come up with viable alternatives.In connection to this point, they should also assist the management to identify and understand possible threats comprehensively. They should point out growth strategies for the company and test the victor of its current schema in various possible futures. Lastly, they should understand and fittingly react to new customer buying demeanour since the customer is the basic unit of the industry and the delight of the customer should be the prime objective of any decision made by the company. Facing the Forces of castrate has suggestions of four possible scenarios for distributors to consider.The first scenario is that which stretches into the future and here distributors have entirely incorporated technology into their companies. give the high take aim of education development, customers expect distributors to track down with them impeccably across numerous communication interfaces. Distributors have effectively achieved th is due to rapid rates of developments. These distributors slake remain the prime route to market for manufacturers. matching Channels is another scenario where customers seek more information directly from manufacturers.Here, manufacturer net sites give animated product specifications, comprehensive technical data and also appropriate product feature are selected by the customers who want much(prenominal) information. This information can be accessed by the customers both directly and indirectly. Directly they repulse connected to the manufacturer Web site and indirectly through an allied distributors Web site. Product collaboration between manufacturers and distributors is undertaken on the meshing with marketing and inventory management also cosmos through in the channel.However, it still remains the constituent of the distributors to provide information back to the manufacturer and keep in line new performance qualifications are met The third scenario is the one describ ing a world where consumers and producers pay for the specific conduit activities they may be in need of. This Unbundled Supply compass has distributors competing directly with supply chain organizations and intermediaries in this scenario are rewarded according to their rate of activity performance. That is, what they have done on behalf of their customers and producers.In the fourth scenario, there is a world with a cluster of consumers forming open and non-profit online exchanges. These parkland platforms handle the data among supply chain partners. Scenario planning requires a few guidelines to be followed. One essential establish a core planning team up because analysis of the strategic implications is best in groups. Secondly, a cross section of expertise should be availed, and this embarrasss the heads of the all functional areas of the company. Bringing the ideas of the thinkers the company is endowed with is such a feat worth the take.It is worthwhile to include the out side people by incorporating information equanimous from them into the whole system. The focus here should be on infusing appealing and challenging perspectives into the discussion. Outsiders include customers, suppliers, consultants and competitors who hold a vital position in the success of the company. in that location should be great care in selecting the mortal to facilitate the scenario planning strategy. An employee of the company should not be part of the choice, neither the senior(a) executive officers.This is because the facilitator should be someone who is focused on planning processes and the twain do not appear in this category. Implications scenario planning, just as other forms of business planning, needs an bulky spending of resources from all the individuals of the company. thitherfore, the support of top management is a very important determinant of success the companys planning capability. What this implies is that there should be readiness from every corner of the company in order for this planning strategy to work in the success and goodwill of the company.An honest assessment must(prenominal)inessiness be carried out to ascertain as to whether the senior decision makers in the company are not only involved but also dedicate to the scenario planning process. Should the company be unready to work with the process, and then even the most sophisticated techniques of a manual of arms or outside consultant are bound to fail. In addition, if the company is faced with a threat of financial insolvency, then it must suspend the identification of long-term threats and other prospects until business stabilizes because this kind of planning is not suited with survival planning.Disruptive cosmos is one of the revolutionary theories of technological change used to describe the impact of new technologies on securelys existence. (Nauosa Hirotta). Combining scenario planning with disruptive invention is unavoidable in this era of high level of technological embrace. It is sure and straight that a company which does not embrace technology in its strategic plan is left behind. Disruptive technology which initiates the approaching of disruptive innovations for example e-marketing is a vital tool but has to be fused with industry scenario so that the company does not lose its clients for the companies.Summary There must be clear repercussions for the company and its strategy if at all scenarios planning is intended to be meaningful. Each scenario can be viewed as a playing ground in which the company finds itself competing in the future and this allows us to apply all of the apparatus of competitive analysis within a given industry setting. The same tools can then be applied in a totally different future. For us to have the best out of scenario planning, a scrutiny of the companys position must be known.The company may be one which can manipulate how the future evolves by right of actions and investments of its members . On the other hand, if it is too small or insufficiently influential, it becomes a scenario taker and in this case its must carefully examine its line of trade and customers so that it is prepared to react and adjust quickly to changes. such(prenominal) scenario takers will find it wise to rapidly feign and adopt to survive they must do what good companies do.BibliographyOlaisen J, A Johannessen, B Olsen, International Journal of tuition Management, 1999 Elsevier Page 15Fein Adam. Scenario Planning Basics for Distributors Accessed at long last on February 27, 2008 from uniform resource locator Accessed last on February 27, 2008 from URL International Journal of Information Management, Volume 19, anaesthetize 4, August 1999, Pages 263-275 Jon-arild Johannessen, Johan Olaisen and Bjrn Olsen Disruptive Technology whitethorn 3, 2007, Accessed on February 28, 2008 from URL