In the highly dynamic business world we occupy, a crystal ball would be handy, but in the absence of a reliable one, business have found scenario planning and robust strategies offer some degree of future proofing. This PPT shows some of the underlying thinking, as well as the process behind these concepts, based on research from world renowned academics.

1. Scenario Planning
Fiona Urquhart, BA, MBA, MCIM,
MIPD, MIBC

2. Ruthless killer
Brain the size of my
fist for a body the size
of a bus

3. Both wiped out by climatic change
If they had done scenario planning, maybe
the world would have looked different

4. • Frog doesn’t notice change in temperature
because it is gradual
• Lulls him into sleep & death

5. Managing from the outside in (Gareth Morgan, 1988)
Increasingly hard to influence or change
Internal
environment
Industry
environment
Buyers, suppliers,
competition,
substitutes, new
entrants
External
environment
Sociocultural,
technological Economic,
Environmental,
Political, Legal, Ethical
You can’t read the label when you’re sitting inside the jar!

6. TOWS/SWOT
P
o
s
i
t
i
v
e
Internal
Strength
Weakness
Opportunity
Threat
External
N
e
g
a
t
i
v
e
Understanding the outside environment (hardest to change) first enables organisations to
create a flexible and responsive internal environment (easiest to change)

7. Understanding the environment
There are two ways to be fooled.
One is to believe what isn’t true
The other is to refuse to believe what is true
Kierkegaard

8. Keeping up to date: some questions to
ponder
• How do you keep up to date with information
in your chosen field?
• What can you do to limit and refine input
• Why do people resist knowledge?

9. Why scan?
• View of the future improves forecasting accuracy
and reduces uncertainty (Makridakis, S.,1978)
• Outside in & Proactive mindsets (Morgan,
G.,1986)
• Mega-marketing (Kotler,P.,1986) (strategic coordination of economic, psychological, political
and public relations skills to gain the co-operation
of a number of parties in order to enter or
operate in a given market)

10. Scanning the environment
• What to Scan (STEEPLE)
• Three goals- Understanding, intelligence, strategic thinking
(Fahey & Narayan , 1986)
• Prerequisites - commitment, review objectives, links to
strategy, culture, flexibility
• Four modes of scanning (Aguilar, 1967)
–
–
–
–
Undirected viewing
Conditioned viewing
Informal search
Formal search
• Dealing with weak signals (John Naisbitt)

11. Two Phase Research Process
Question
Design
Objectives
Qualitative
Research
Interpret
Final
Design
Survey Data
Collection
Initial
Analysis
Interpreta
tion
Final
Analysis
Action
Points

12. Sociocultural Issues
• Modernism, post modernism, post Fordism, post
materialism
• Class
• Income & Wealth
• Gender
• Life course stages
• Demography
• Lifestyles ( consumer
culture, neighbourhoods, institutions, friends and
colleagues, common activities)
• Ethnicity (Disadvantaged minorities, regional
variations, low employment rates)

13. Technological Issues
• Three types of force for technological change
– demand-led
– technology-led
– ideology-led
• Four categories:
–
–
–
–
Technological Revolutions
System changes (new technologies)
Radical changes (discontinuous events)
Incremental changes (low-level improvements)

14. Economics Issues
Micro-Economics Issues
• Takeovers, bankruptcy,
competition
• Transaction cost analysis
(downsizing, outsourcing,
contracting, make or buy)
• Labour costs
• To understand how the
industry operates
Macro- Economics
• GDP, unemployment rates,
price indices
• National income, output,
consumption, international
trade, inflation
• to understand how the
whole economy functions.

15. Politics
•
•
•
•
•
•
•
•
Prisoners dilemma
Tit For Tat
Zero sum games
Pay-off matrices
Voter theory
Press & PR influencing political environment
Pressure Groups
Lobbying

16. Interpreting environmental scanning
information
• Look at all the post it notes you have
gathered, and decide whether the changes
they identify will be important or unimportant
and certain or uncertain
• Place them in the relevant quadrant of the
matrix on the next slide
• The quadrant of interest is the
Important/Uncertain one. Important/Certain
should be addressed by short term planning

17. Importance/ Uncertainty matrix
Unc ertain
I
m
p
o
r
t
a
n
t

18. Formulate scenarios
• In groups, select six or seven post it notes from
the Important/Uncertain sector.
• These may all relate to one area of the
environment, or may involve a combination of
these areas.
• Now, imagine what the world would be like if all
these aspects coincided.
• Give your picture of the world a descriptive title
e.g. Fortress Europe, “Grey” Domination etc.
• As a group describe your scenarios to the entire
audience

19. Stages of scenario planning
•
•
•
•
•
Decide on drivers for change
Bring drivers together in a framework
Produce initial (7-9)mini scenarios
Write the scenarios
Identify issues arising

20. TOWS
• Now, looking at your scenario, draw up a
summary of the threats & opportunities for
your organisation
• What strategies would enable you to ward off
threats?
• What strategies would enable you to exploit
opportunities fully?

21. Corporate strategy V Robust Strategy
Corporate Strategy
• Objectives
– Optimising performance
• Characteristics
– Short term
– Single Focus
• Outcomes
– Effectiveness
– Commitment
• Recipients of benefits
– Individual profiteers
Robust strategy
• Objectives
– Ensuring Survival
• Characteristics
– Long Term
– Divergent coverage
• Outcomes
– Comprehensiveness
– Understanding
• Recipients of benefits
– Stakeholder communities

22. Generic strategies
Forecasting/
Scenario
forecasting &
Robust
Strategies
Budgeting &
Corporate
Strategy
Compare
& Steer
Generic
Strategies

23. Key Turning Points: Business School
MOST
IMPORTANT
Government funds
masters education
Demise of
MBA
Requirement for
ongoing education
recognised by
managers
Managers want
networking club
LEAST
IMPORTANT
Microsoft enters
‘edutainment’ business
LEAST LIKELY
MOST LIKELY

24. Integrating Scenario Planning with Corporate Strategy
Isolate Turning Points
Decide Robust Strategies
Test Against Corporate Strategy
Decide Strategic Changes
Translate to Action

25. Generic Robust Strategies
• Customer Franchise
• Rule of 123 ( brand leader has a share double that of the second brand,
and triple that of the third)
• Branding, segmentation, positioning
• Opinion Leaders/peer pyramid
• Relationships with Customers
– CRM
– Service
– complaints
• Relationships with Competitors
– Collaborators & Cartels
• Inner marketing
– Stages
– Managed suggestions
– Culture

26. References
• Fahey, L., & Narayanan, V. K. (1986). Macroenvironmental Analysis for
Strategic Management (The West Series in Strategic Management). St.
Paul, Minnesota: West Publishing Company.
• Aguilar, F.J., Scanning the business environment,Macmillan, 1967
• Marketing Strategy: The Challenge of The external Environment, David
Mercer (The Open University 1988)
• Riding the cutting edge of change, Gareth Morgan, (San Francisco: Jossey
Bass 1988)
• Philip Kotler, 'Megamarketing', Harvard Business Review (March–April
1986)
• Makridakis,S. & Wheelwright, S.C.,Forecasting: methods and
applications, Wiley, 1978