ScenarioAnalysis

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The strategic thinking of modern business organizations has been built upon a platform of militant strategists since 400BC when Sun Tzu wrote the Art of War scenario planning. Sun Tzu preached to know and attack the enemy’s strategy. In Sun Tzu’s Art of War, he wrote about five fundamental factors in military strategy and each of these factors relates to a popular concept of business strategy. 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, value propositions, and industry forces.

Various size organizations naturally experience different challenges and thus, undertake different approaches to managing their business strategy scenario analysis example. A global organization may employ a more structured strategic management model, due to its larger size and scope of operations. A small to medium business may be more entrepreneurial in its approach to business growth strategy and its operations are often much more nimble and lean.

Skimming the market introduces the new product or service at a relatively higher price point scenario planning. Then, with time, as competition increase, the pricing is driven down by competition. As more competitors enter and increase product supply, pricing will naturally decline. This scenario planning allows the company to quickly maintain share and sales volume by appealing to the price sensitive consumers. Price skimming strategy allows the company to maximize its profit margin by charging the highest price consumers are willing to pay for the product. Price skimming is often named riding down the demand curve.

Business strategy development has gone through several key stages since the early 1900s scenario planning. Changes to strategic mindset represent a changing landscape, emerging business leaders, and emergence of disruptive technologies and changes. In the current day, the strategic development theme is on integrating strategic planning and execution with a stress on the key concepts of core competencies, strategy planning and execution, and balance scorecard analysis. Much of growth strategy is also hinged on ideas in the 1970s, where the core theme was around thinking strategically to beat competition and the scenario planning business frameworks of alternative strategies, portfolio analysis, and the BCG Growth Share Matrix emerged. There are various types of strategy development challenges that can be derived from the teachings of Mintzberg and Bower scenario analysis. There is the strategic challenge of aligning execution context, so that scenario planning can be truly realized. Defining a strategic intent includes setting objectives, developing relevant battlefields, and choosing the required core competencies. One significant scenario planning challenge is developing top down intervention fueled by revised strategic intent.

Citation(s): http://learnppt.com/powerpoint/67_Scenario-Planning.php