IP U6

 

                        Futuring and Innovation CS875 Unit 6 - Individual Project

                                           Colorado Technical University

                                             Professor: Cynthia Calongne

                                              Sunday, January 7, 2024

 

  

 

 

 

 

 

Scenario planning encourages risk management over risk release, it may also be beneficial ​to an institution's​ approach to risk management. Institutions are unable to recognize when they are taking on too much risk or, conversely, when they are not taking on enough risk if they cannot extend goals using a variety of approaches. An institution can determine if ​it has​ attained a superb ​ratio between the risk, it can​ ​tolerate and the performance it​ aspires for by having the capacity to evaluate various results. For instance, ​in 2006, it would have been​ highly feasible to create a plan for ​the US housing market​ that included a scenario ​in which the​ decade-long rise in home ​prices​ would pause for a certain amount of time. Considering the decreasing number of conscientious purchasers and the availability of quality. It was clear that this plan was working by the beginning of 2007. Any business that had created such a plan may have avoided the worst effects of the subsequent financial crisis. The system technique was a part of the blueprint process until recently. Nonetheless, this method is being used by many organizations for both functional and tactical decision-making. According to Chesbrough (2010), action leads to the competitor's success and triumph inside the organization.  

A strategic management technique known as scenario-type planning offers an organized method for foreseeing and responding to uncertainties in the future corporate environment, hence fostering planning and innovation for change. In contrast to conventional forecasting, which frequently uses linear forecasts derived from historical data, scenario planning entails developing credible future possibilities. Through this approach, companies are encouraged to explore a variety of potential futures and go outside the box of preconceptions. 

Key Aspects 

Anticipation of Uncertainties  

Scenario planning ​helps organizations identify potential disruptions, challenges, and​ ​opportunities that​ might ​arise​ in the future. By considering various scenarios, ​companies can better prepare for unexpected events and make informed decisions​. 

Strategic Flexibility 

The process of developing scenarios allows organizations to create flexible strategies. Instead of ​a one-size-fits-all​ approach, scenario planning enables the formulation of adaptable strategies that can be adjusted based on the unfolding circumstances. 

Innovation Stimulus 

By exploring alternative futures, scenario planning stimulates innovative thinking. It encourages teams to brainstorm creative solutions and consider new approaches to address challenges and capitalize on opportunities. 

​​Enhanced Decision-Making​ 

​​Scenario planning provides decision-makers with a​ more comprehensive understanding of the complexities of the business environment. This, in turn, enables better decision-making as leaders are better equipped to assess risks and make strategic choices aligned with the organization's goals. 

Organizations utilize scenario-type planning as a strategic planning technique to create adaptable long-term strategies. Because of the accelerating pace of change and unpredictability in the corporate world, it is especially pertinent. Instead of depending just on one projected future, businesses may consider several potential futures and prepare for them by using scenario planning. 

Kodak is one instance of a business that did not carry out enough scenario-type planning. Once a pioneer in photography, Kodak could not predict or adjust to the emergence of digital photography and the demise of film. Kodak stuck to its old film business and took a while to embrace digital photography, even though it invented the first digital camera. This lack of flexibility and forethought resulted in Kodak's 2012 bankruptcy. 

Planning for change is facilitated by scenario-type planning, which gives businesses the opportunity to think through a variety of potential outcomes. When companies think about how they could react to various events, this can inspire creativity and innovation. Because they have anticipated and prepared for all scenarios, it also makes firms more robust and flexible. 

Scenario planning may be used to foresee and get ready for future problems and changes in terms of innovation endeavors. Finding innovative prospects ​and making​ ​sure these​ innovations ​are in line with the​ organization's strategic direction may both be beneficial. 

The social effects of change should also be included in the scenario plan. This entails considering potential effects on various stakeholders, such as workers, clients, and the public. Organizations may ensure their strategies are morally and socially responsible by considering these effects. 

To sum up, scenario-type planning is an effective tool for creative and strategic planning. By anticipating and preparing for a variety of potential futures, it fosters resilience and flexibility in companies. To be morally and socially conscious, corporations must, nonetheless, also consider how their intentions will affect society. 

​​What forces are involved, and what impacts do they make​? 

Forces Involved 

Technological Advances:  

Industries can be disrupted, and new possibilities might be created by rapid technological advancements. For instance, the emergence of digital platforms and the fall of print media were caused by the internet's transformation of the newspaper business. 

Shifting Customer Tastes:  

Industries are susceptible to major impacts from changes in customer attitudes and behavior. The difficulties facing the newspaper industry were exacerbated by customers' choice for online news consumption over conventional print. 

Regulatory Changes:  

Regulation changes may have a significant impact on some businesses. For example, modifications to content distribution policies or data protection legislation may affect companies and call for strategic reorganizations. 

Impacts 

Financial Implications:  

A reduction in revenue, a loss of market share, and more competition are just a few of the financial effects that can result from forces like technological disruption and shifting customer preferences. 

Operational Changes:  

Organizations may need to undergo operational changes to adapt to new realities. This could ​involve shifts in​ distribution channels, ​changes in production​ processes, or the adoption of new ​technologies​. 

Market Dynamics:  

Forces at play can alter market dynamics, leading to the emergence of new competitors, changes in customer demographics, or the creation of entirely new markets. 

3. An appropriate illustration or a model can be! 

The "2x2 matrix," also known as the "Scenario Matrix," is a popular tool for scenario planning. Plotting two major uncertainties on the axes yields four quadrants in this matrix, each of which represents a distinct scenario. Teams may more easily see and evaluate several possible futures with the aid of this visual depiction, which facilitates the development of scenario-specific tactics. 

This matrix may include uncertainty related to "Consumer Preference for Print vs. Digital" and "Pace of Technological Advancements" in the context of the newspaper industry. Then, each quadrant would stand for a different scenario, such as "Digital Disruption," "Print Dominance," "Hybrid Transition," and "Technological Stagnation." This strategy helps companies prepare for various possible outcomes by helping map out prospective problems and opportunities. 

 

 

 

 

 

 

                                                    Reference:

 

Chesbrough, H., & Rosenbloom, R. S. (2002). The role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin‐off companies. Industrial and corporate change, 11(3), 529-555.

Chermack, T. J. (2011). Scenario planning in organizations: how to create, use, and assess scenarios. Berrett-Koehler Publishers.

Strategic Planning Supports ED Automation. (2004). Health Management Technology, 25(11), 34-34, 36. https://coloradotech.idm.oclc.org/login?url=https://www.proquest.com/trade-journals/strategic-planning-supports-ed-automation/docview/195648795/se-2

Chesbrough, H. (2010). Business model innovation: opportunities and barriers. Long range planning, 43(2), 354-363.