with alternative scenarios to new strategies, business ......how to cope with the future –...

Strategic Foresight – With Alternative Scenarios to new Strategies, …

© Scenario Management International AG

Scenario Management International AG

Klingenderstr. 10-14, 33100 Paderborn

Telefon: 49(0)5251-150570, Email: [email protected]

Strategic Foresight –

With Alternative Scenarios to new

Strategies, Business Models and

Innovative Products

Jul-13

18. CCEC-Workshop „Technology-driven Change“

Ruhr-Universität Bochum

Institut für Unternehmensführung

Bochum, 20 June 2013

Dr. Alexander Fink

1


© Scenario Management International AGJul-13

Strategic Foresight –With Alternative Scenarios to new Strategies, Business Models and Innovative Products

A

B

C

D

E

How to cope with the future –

Scenarios as the third level of future management

Four steps of Scenario Development –

Example: Mobility in German conurbations 2030

From scenarios to strategies –

How to integrate uncertainty into strategic decisionmaking

From scenarios to strategic foresight –

How to use scenarios for innovation and early warning

Six success factors of Scenario Management –

and why we should become “cartographers of the future”

2



Walkman and Boomboxes are very popular and have a deep impact on youth

culture. VCRs and video rental stores are growing and Japanese companies are

dominating the entertainment industry.

The internet is used for research and public affairs only – it has no commercial

use and is not gaining any public face.

The world 30 years agoThe world 30 years ago

Volkswagen deletes the “Käfer” from its sales program. Mercedes-Benz is

successfully running a ‘revolution’ – the start of its mid-class-car ‘190’.

Eleven people look back on the first phases of their company ...

After the entry of Greece (1981), the European Community (EC) has 10

member states.

Sears, Roebuck & Co. and K-mart are the largest retailers.

Wal-mart is on the way of becoming a critical competitor.

The Cold War is in its end phase. The world is still divided into a Western and

an Eastern hemisphere, but Mikhail Gorbachev forced glasnost (openness) and

perestroika (restructuring) within the Soviet Union and its allies in the

“Warsaw Pact”.

The word “globalisation” is not contained in the German dictionary.

GDP per head in Korea is 2,370 US-$ (1986) – this corresponds to Yugoslavia,

Gabon, Venezuela and Lebanon.



In 1997/98 the Asian crisis terminates the expansion of the so-called “Tiger

states” and nearly leads the world into a global economic crisis. The word

„globalization“ is introduced into the German dictionary in 1996.

With the use of browser technology – especially Netscape – the growth of the

internet starts. Bill Gates is skeptical, but introduces its Internet Explorer in

sufficient time. Apple is close to bankruptcy – and makes a deal with

Microsoft.

The world 15 years agoThe world 15 years ago

The Cold war, the Soviet Union and the German subdivision are history.

Francis Fukuyama proclaims the „End of history“ – a world which strives for

capitalism and Western democracy.

Volkswagen is in a deep crisis. Ferdinand Piech – together with José Ignacio

López – drives a strong restructuring course. Within Daimler-Benz, Jürgen

Schrempp withdraws from the vision of an integrated technology company.

The EC becomes the „European Union“ with 15 member states – as seen in its

flag. Based on the Maastricht Treaty the European Economic and Monetary

Union (EMU) comes into force.

Wal-mart – the #1 in the USA – tries to conquer the discount-driven German

market, but withdraws from its strategy ten years later.

DVD-format is invented and developed by Philips, Sony, Toshiba and Panasonic

in 1995.



The world todayThe world today

Globalization is influencing nearly all aspects of business and daily life.

An average Korean earns 24.500 US-$ – as much as a Serbian, a Gabon, a

Venezuelan and Lebanese citizen - together!

Uncertainty is increasing. Global power is shifting towards newly

developing countries. The new multipolarity is symbolized by the further-

development of the G7-industrial states towards the „Group of the 20“.

Microsoft’s products are included in 70% of PC’s worldwide – but they are

rapidly loosing ground against other devices. The global market value of

Microsoft was rank #1 (2003-2007), but is now rank #9 (4th quarter 2012).

Today the EU has 27 member states including most Scandinavian countries, all

European members of the “Warsaw Pact” and even the Baltic states as former

Soviet republics. It also has an own currency.

At a revenue of 469 billion US-$ Wal-mart has become the world‘s biggest

retailer (and the worlds biggest company, too). If Wal-mart is seen as a national

economy it would be on rank 28 – before or South Africa, Denmark or Egypt.

After a few years, the „Käfer“ is back. It‘s now called „New Beetle“ and

competes with the A-Class and the „Smart“ of a company renamed Daimler

after forming a “world company” named “DaimlerChrysler”.

The internet is one of the most powerful inventions in world history, forming

several businesses and activities of our daily life – such as music or movie

downloads which are displacing traditional data or sound carrier.

5



How could we recognize upcoming change?



How to cope with complexity ...

»Worldwide demand for cars will never exceed one

million, primarily because of a limitation in the number

of available chauffeurs.«From an early market research study of Daimler Motor Company, 1901



Scenario-ManagementScenario-Management

A scenario is a description of a possible

situation in the future, that is based on a

consistent set of developments of the most

important and interconnected key factors.



Scenario-ManagementScenario-Management

A set of scenarios describes

the “window of possibilities”.




A

B

C

D

E











10



A scenario …A scenario …

is not a strategy.is not a strategy.



Scenario-study

Future mobility inGerman conurbations 2030



Three steps of Scenario creationThree steps of Scenario creation

Creation, analysis

and formulation

of scenarios

What are the possible

scenarios – and how does

the landscape look like?

1

3

42

5A

C B

DKF

A

B

CKF

Scenario

prognostics(Future projections)

How could these

key factors develop

in the future?

Scenario field

analysis(Key factors)

What are the

driving forces

in the scenario field?



Map of the future: Core dimensions

SCENARIO

1

SCENARIO

2

SCENARIO

3SCENARIO

4

SCENARIO

5

SCENARIO

7� Lower mobility

� Weak public transport

� Lower mobility

� Strong and innovative

public transport

� High mobility

� Weak public

transport

SCENARIO

6

� High mobility

� Strong and innovative

public transport



Map of the future

Complete GridlockTraditional individual mobility

reaches its limits whereas public

transport fails to close that gap

New Business ModelsRises in price of individual mobility facilitate the

advent of new mobility concepts

Rejection of MobilityChange in values, environmental

activism and innovative logistics lead

to a reduction of road and freight

traffic volume

Growth of the CentresPublic transport grows due to

rises in price for individual

mobility

Broad Growth of the

ConurbationsIntegration of cars into the extended

range of public transport facilities

Back to the roadsPredominance of traditional

individual mobility due to a

severe extension of

agglomeration areas

Growth of the suburbsMulti-faceted concepts in a privately

funded environment

SCENARIO

1

SCENARIO

2

SCENARIO

3SCENARIO

4

SCENARIO

5

SCENARIO

6

SCENARIO

7


© Scenario Management International AGJul-13 16

Scenario Formulation

Summary of the

core messages

Transfer of the

content of the

scenario into

creative formats

like “a story from

the future”

Elements of

the single

scenarios

Support of the

core messages

by suitable

pictures

Detection of

indicators which

would show the

scenario in an early

phase of appearance

Detailed and structured

description of the scenario



1

3

4

5

–

––

–

–

–

–

––

–

+

++

+

++

+

+

+––

–

2

Scenario Assessment and InterpretationScenario Assessment and Interpretation

KF

KF

Creation, analysis

and formulation

of scenarios

What are the possible

scenarios – and how does

the landscape look like?

Scenario

prognostics(Future projections)

How could these

key factors develop

in the future?

Scenario field

analysis(Key factors)

What are the

driving forces

in the scenario field?

A

C B

D

A

B

C

Assessment and

interpretation of

scenarios

What are the opportuni-

ties and threats – and what

are expected scenarios?




A

B

C

D

E











18



Scenario Management

Take opportunities /

Cope with threats

OPPORTUNITIES

THREATS

Solve current

problems!PROBLEMSStrategic analysis:

Where do we stand today?

The view ahead:

How could the future

look like?



Scenarios a wind tunnel for existing strategies

Jul-13 20



How to cope with scenarios ...

Interpretation of the different futures

All scenarios are equally ranked

Sce

na

rio

tra

nsf

er

Co

nsi

de

rati

on

of

sid

e

c on

dit

ion

s (=

Sce

na

rio

fie

ld)

Inclusion of expectations

Scenario Assessment

Evaluation of scenarios which are

near to the current situation, the

expected future and the preferred

future – as well as interpretation

(development paths etc.)

Expected future,

Development paths,

Change patterns

Scenario

Development

Development of a

set of vivid future images

as „thinking tools“

Future space with alternative

external scenarios

Re

fere

nce

to

de

cisi

on

fie

ld

Consequence analysis

Detection of consequences for

the decision field (company,

organization, ...) within certain

scenarios

Scenario specific and futre-

robust opportunities, threats

and strategic options

Jul-13 21

Scenario-based

Strategies / Decisions

Combination of strategic

options with the assessed

external scenarios

Strategically relevant scenarios (focused/

robust) and needs for strategic early warning



Scenario transferScenario transfer

Today

Scenario

3

Scenario

4

� Driving forces

� Changes

� Winners and losers

� Indicators

� Opportunities and threats

� Options / measures

Scenario

2

Scenario

5Scenario

1

Jul-13 22



Scenario

3

How to cope with the scenarios ...How to cope with the scenarios ...

Necessity for

strategic

early warning

Focused strategy

Concentration of strategic

measures on one specific

reference scenario

Today

Scenario

4

Scenario

2

Scenario

5Scenario

1




Future-robust strategy

Definition of a strategy that

copes with opportunities and

threats of a group of scenarios

Today

Scenario

3

Scenario

4

Scenario

2

Scenario

5Scenario

1

Necessity for

strategic allocation

of resources



RELEVANT SCENARIOS


Which scenario meets the expectations of the

future best?

SCENARIO EVALUATION

Scen. 1 Scen. 2 Scen. 3 Scen. 4 Scen. 5

Today

Scenario

3

Scenario

4

Scenario

2

Scenario

5Scenario

1



Strategic GuidelineStrategic GuidelineScenario

3

Scenario

4

Scenario

2

Today

Scenario

5Scenario

1

VISION

Strategic analysis



Strategic Guideline:Corporate / Business strategiesStrategic Guideline:Corporate / Business strategies

Today

VISION

Strategic

Competencies

Strategic

Positions

Priority fields of action

Strategic analysis

Jul-13 27



Two kinds of scenariosTwo kinds of scenarios

Strategy scenarios describe „the own futures“.

They represent our „window of possibilities“

Jul-13 28

External scenarios describe possible side conditions

for the activitiy of a company or an organization.



The way to strategy scenarios and a strategy mapThe way to strategy scenarios and a strategy map

Strategy map

How could our general

options be visualized in

an overlooking “map of

the future”?

Strategy scenarios

Which combinations

of future options

lead to consistent

strategies?

Future options

Which strategic

options do we have

regarding the

strategy elements?

Strategy elements

Which are the

main aspects

that define our

business strategy?

A B

C D

A B

C D

2

5

4

1

3

Target

markets

Product

portfolio

Jul-13 29



Development of a strategic guidelineDevelopment of a strategic guideline

o

+

–

+ +

– –

+

+

+ +

o

– –

+ +

–

+

+ +

+ – – – – o

+ +

– –

External

scenario 4

External

scenario 3

External

scenario 2

External

scenario 1

Strategy

scenario B

Strategy

scenario C

Strategy

scenario D

Strategy

scenario E

Strategy

scenario A

Jul-13 30

How suitable is

strategy scenario D

in an environment

described by

external scenario 2?

How suitable is

strategy scenario D

in an environment

described by

external scenario 2?




A

B

C

D

E











31



Strategic guideline: Implementation trapStrategic guideline: Implementation trap

Expected

Future

+Current

Strategy

CHANCES

& RISKS



Strategic guideline: New business developmentStrategic guideline: New business development

o

+

–

+ +

– –

+

+

+ +

o

– –

+ +

–

+

+ +

+ – – – – o

+ +

– –

External

scenario 4

External

scenario 3

External

scenario 2

External

scenario 1

Strategy

scenario B

Strategy

scenario C

Strategy

scenario D

Strategy

scenario E

Strategy

scenario A

Market

segment 1

Market

segment 2

Market

segment 3

Market

segment 4

Market

segment 5

Market

segment 6

Market

segment 7

Market

segment 8

Market

segment 9

� How could our market

frame develop?

� What could be future

customer needs?

� How could relevant

customer groups look

like in the future?o – + + +

o + + + – –

+ o + + + +

– + + – –

+ + – – o –

o + + + + – –

+ + o o + +

o – – – o

+ + – – + + –

� Could certain customer

groups profit from an

external development?

� Which are the market

segments that profit

from the strategically

relevant scenarios?



Strategic guideline: New business developmentStrategic guideline: New business development

o

+

–

+ +

– –

+

+

+ +

o

– –

+ +

–

+

+ +

+ – – – – o

+ +

– –

External

scenario 4

External

scenario 3

External

scenario 2

External

scenario 1

Strategy

scenario B

Strategy

scenario C

Strategy

scenario D

Strategy

scenario E

Strategy

scenario A

Market

segment 1o – + + +Market

segment 2o + + + – –Market

segment 3+ o + + + +Market

segment 4– + + – –Market

segment 5+ + – – o –Market

segment 6o + + + + – –Market

segment 7+ + o o + +Market

segment 8o – – – oMarket

segment 9+ + – – + + –

Product

scenario 1

Product

scenario 2

Product

scenario 3

Product

scenario 4

Product

scenario 5

Product

scenario 6

Product

scenario 7

� How could our product frame develop?

� What could be future technologies?

� How could relevant products / offerings

look like in the future?

o

+

+ +

+

+ +

+

–

–

+ +

+ +

o

– –

+ +

– –

+ +

+ +

+

+

o

– –

– –

o

– –

+

+

–

o

+ +

+

– –

+ +

+

– –

o

– –

� Which product concepts fit to certain

strategic options?

� Which are the products / offerings that fit

to our strategic guideline?



New business developmentNew business development

o

+

–

+ +

– –

+

+

+ +

o

– –

+ +

–

+

+ +

+ – – – – o

+ +

– –

External

scenario 4

External

scenario 3

External

scenario 2

External

scenario 1

Strategy

scenario B

Strategy

scenario C

Strategy

scenario D

Strategy

scenario E

Strategy

scenario A

Market

segment 1o – + + +Market

segment 2o + + + – –Market

segment 3+ o + + + +Market

segment 4– + + – –Market

segment 5+ + – – o –Market

segment 6o + + + + – –Market

segment 7+ + o o + +Market

segment 8o – – – oMarket

segment 9+ + – – + + –

o

+

+ +

+

+ +

Product

scenario 1

+ +

– –

+ +

–

–

– –

+ +

o

+

+

–

–

+ +

+ +

Product

scenario 2

+

o

+

+ +

o

o

+ +

o

– –

o

– –

+ +

– –

+ +

Product

scenario 3

– –

–

+ +

+ +

+

–

+ +

– –

+ +

+ +

+

+

o

– –

Product

scenario 4

+

+

o

–

– –

+

– –

o

o

– –

o

– –

+

+

Product

scenario 5

– –

+

+

– –

o

+ +

+ +

+

– –

–

o

+ +

+

– –

Product

scenario 6

o

o

+ +

o

+ +

o

+ +

o

–

+ +

+

– –

o

– –

Product

scenario 7

+

– –

o

+ +

–

– –

– –

o

+




A

B

C

D

E











36

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