ScenarioPlanning

The strategic thinking of modern business organizations has been shaped by militant strategists since the beginning of organized warfare scenario analysis. Sun Tzu hinted at indirect business strategies when Sun Tzu asserted winning scenario analysis example without fighting is the highest of skill on the battleground. Sun Tzu’s thoughts about the factor of terrain, if we were to take that into the context of companies competing today, translates to scenario analysis example, industry structures, market positions, and competitive forces.

Various sized companies almost always go through different challenges and thus, take on different strategies to managing their business strategy scenario analysis example. Some businesses companies may be in the nascent growth stages, whereas more established conglomerates are in the sustain phase. A small to medium business may be more entrepreneurial in its approach to business growth strategy and its operations can often be more nimble and lean.

Skimming the market introduces the new product or service at a relatively high price scenario planning. Penetration pricing is to introduce a product or service at a minimal starting entry price, usually less than existing substitutive products in the market. As more the landscape becomes more competitive and increase supply, pricing will naturally decline. This scenario planning allows the business to rapidly capture share of the market and top line growth by appealing to the majority of the market. This scenario planning allows the organization to maximize its profit margin by getting the highest amount consumers are willing to pay. Price skimming is often called riding down the scenario planning curve.

Strategy development has evolved through 5 key phases since the early 1900s scenario planning. Business strategy development started with a focus on financial planning in the 1950s, moving to long-term planning in the 1960s, to scenario planning in the 1970s and eventually to a focus on scenario planning in the present day. In the current day, the strategic development theme is on integrating strategic planning and execution with a stress on the primary notions of core competencies, strategy planning and execution, and balance scorecard analysis. A lot of competitive scenario planning is also hinged on ideas in the 1970s, where the focus was around thinking strategically to out maneuver competition and the scenario planning business frameworks of alternative strategies, portfolio analysis, and the BCG Growth Share Matrix were developed. There are several types of scenario planning challenges that can be derived from the teachings of Mintzberg and Bower scenario analysis. In the strategy development process, framing the type of strategic challenge is considered one of the most critical activities. Defining strategic intent involves setting objectives, defining business battlefields, and defining the required scenario planning. One noteworthy strategic challenge is the existence of ambiguity, in regards to both the challenge and strategy development approach.

Reference: http://learnppt.com/powerpoint/67_Scenario-Planning.php http://www.mckinseyquarterly.com/The_use_and_abuse_of_scenarios_2463