The Business Environment Week 4
Scenario Planning Working with Government NGOs
• In an uncertain business environment, companies seek to Limit risks that emerge from external influences in the future
• Identify ____________________________opportunities
• Scenario planning is a useful tool to achieve these two objectives
• Scenario planning can mitigate some of the mistakes businesses may make in planning….
What is Scenario Planning?
• “A discipline for rediscovering the original entrepreneurial power of creative foresight in a time of accelerated change, increasing complexity and genuine uncertainty”
• “Making choices today with an understanding of how they might turn out tomorrow”
• Creation __________________________________________ ___ scenarios that extrapolate present external issues and trends that are anticipated to be important to the company in the future
• Extrapolation occurs along several dimensions:
o Economic factors
o Political factors
o Legal factors
o Social factors
o Technological factors
o Natural Resource factors
• Our course is a scenario planning session
o We build a plausible scenario of the five year future for Canadian business, week by week, factor by factor
Example of Scenario Planning - Shell Oil early 1973
• Undertook scenario planning exercise
• Two main scenarios
o 1.‘business as usual with small changes for next five years’
o 2. ‘massive oil price increases because of OPEC’
• Managers made action plans based on both scenarios
• When OPEC price spikes started, Shell was prepared
How Does Scenario Planning Work?
• Evaluate future external environment for the company
• Identify major issues and trends that could impact the company, as a way of focusing
• Develop a small number of future scenarios that could face the company
• Identify what company would do if these scenarios occurred
• Identify what the company can do now to prepare in...