Chp 6: Forecasting and scenarios

Question 1

What are the four responses that Aaker and McLoughlin suggested in their strategic uncertainty matrix (strategic importance vs urgency)?

Answer 1

1. High I, High U: Analyse in detail and develop a strategy to deal with the uncertainties
2. High I, Low U: Monitor, analyse and consider contingent strategies
3. Low I, High U: Monitor and analyse
4. Low I, Low U: Monitor

Question 2

What are the three key areas for managers to focus on when identifying trends and forecasts?

Answer 2

1. Megatrends - large scale changes (PESTEL) which affect other activities
2. Inflexion Points - moments when trends shift in direction, which will likely invalidate forecasts
3. Weak Signals - advanced signs of future trends, can be helpful in identifying inflexion points

Question 3

What are the below statistical forecasting techniques?

Time series analysis
Regression analysis
Econometrics
Leading indicators

Answer 3

• Time series analysis - identifies seasonal or cyclical patterns
• Regression analysis - aims to identify correlation between different variables
• Econometrics - studies the interrealtionship between economic variables
• Leading indicators - indicators which change before market demand changes

Question 4

What are three types of judgemental forecast?

Answer 4

1. Jury forecasts - a panel prepares a consensus forecast
2. Think tank - experts speculate about possible future events and courses of action (relatively unstructured)
3. Delphi method - experts respond anonymously to a questionnaire, group results are shared back and experts continue to repsond anonymously until a consensus is reached

Question 5

What are the five steps of scenario planning?

Answer 5

1. Define the scope and major stakeholders that drive change
2. Identify key drivers for change - shows areas of uncertainty (using PESTEL)
3. Construct initial scenarios - check for consistency and plausability
4. Identify the implications and impacts - identify any additional information needed to fill scenario gaps
5. Develop strategies

Question 6

Foresight doens’t aim to predict the future (like forecasting), but instead aims to identify a range of possible outcomes based on an understanding of current trends. Toacheve this, organisations need to imporve what five competences?

5 C’s

Answer 6

1. Communication
2. Concentration - on long term outcomes
3. Coordination - different groups harmonise R&D
4. Consensus - agreeing future research priorities
5. Commitment - to research and tech advances

Question 7

What are the following foresight techniques?

Scenario Planning
Issues Analysis
Delphi Technique
Role Playing
Cross-impact Analysis
Morphological Analysis
Visioning

Answer 7

• Scenario Planning - planning possible scenarios
• Issues Analysis - assess using an importance-urgency matrix
• Delphi Technique - anonymous consensus amongst experts
• Role Playing - role play a potential future situation and analyse actions taken
• Cross-impact Analysis - analyse the interdependencies between events
• Morphological Analysis - a matrix of components (of scnearios/strategy/product) is created, this is then used to create further strategies/products
• Visioning - a desired, future state is determined and a strategy to achieve it