There are many different methodologies for assessing the future environment of an enterprise. But it is quite difficult to anticipate the future development successfully. Three examples illustrate this problem: • “In 1943 Thomas Watson, who was then chairman of IBM, forecast a world market for about five computers.
• In 1970, Ken Olsen, founder of Digital Equipment Corporation, said no one needed to have a personal computer at home. (Of interest is that Ken´s company was purchased by Compaq - one of the leaders in home computers).
• In 1981, Microsoft´s founder Bill Gates said that 640K would be enough memory for anyone. (Microsoft was also slow to take advantage of the early Internet - releasing Internet Explorer in August 1995, well after Netscape Navigator, which had taken a dominant lead in the early browser market.)”
These examples show that it can have disadvantageous consequences to rely on one apparently safe forecast. Scenario planning is a technique that allows to operate in planning with more than one possible future. This treatise describes the very interesting methodology of scenario development and demonstrates how to use it in an eight step procedure. Concluding, it shows how the oil company Shell had a remarkable success in the 1970s by using scenario planning and gives an assessment of this remarkable technique.
Inhaltsverzeichnis (Table of Contents)
- 1. INTRODUCTION
- 2. WHAT IS SCENARIO ANALYSIS
- 2.1. TERM "SCENARIO"
- 2.2. THE CONCEPT OF SCENARIO ANALYSIS
- 2.3. ACCURACY
- 3. HOW TO DO IT
- 3.1. THE SCENARIO MODEL
- 3.2. EIGHT STEP PROCEDURE
- 3.3. NUMBER OF SCENARIOS TO GENERATE
- 3.4. TIME HORIZON
- 4. SHELL'S SCENARIO EXPERIENCE
- 5. SUMMARY
- REFERENCES
- BOOKS
- WEBSITES
- APPENDIX 1
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper focuses on scenario development as a strategic marketing tool. It aims to explore the concept of scenario analysis, its implementation, and its application in real-world scenarios, particularly as exemplified by Shell's scenario planning experience.
- The concept and application of scenario analysis in strategic marketing
- Steps and procedures involved in developing effective scenarios
- The role of key driving forces and uncertainties in scenario development
- The importance of accuracy and time horizon in scenario analysis
- Real-world examples of successful scenario planning, using Shell as a case study
Zusammenfassung der Kapitel (Chapter Summaries)
- Chapter 1: Introduction - This chapter serves as an introductory overview of the paper's topic: scenario development. It provides a general context for the discussion and sets the stage for the subsequent chapters.
- Chapter 2: What is Scenario Analysis? - This chapter delves into the core concept of scenario analysis, explaining its purpose, key characteristics, and theoretical underpinnings. It explores the term "scenario" itself and examines the accuracy of scenario analysis.
- Chapter 3: How to do it - This chapter provides a practical guide to developing and implementing scenario analysis. It outlines the scenario model, a step-by-step procedure, and considerations for the number of scenarios and their time horizon.
- Chapter 4: Shell's Scenario Experience - This chapter explores Shell's successful application of scenario planning, demonstrating how scenario analysis has been effectively utilized in a real-world business context.
- Chapter 5: Summary - This chapter summarizes the key findings and insights discussed throughout the paper. It offers concluding remarks and emphasizes the significance of scenario development as a strategic marketing tool.
Schlüsselwörter (Keywords)
The paper focuses on key terms and concepts such as scenario analysis, strategic marketing, scenario development, driving forces, uncertainties, accuracy, time horizon, and Shell's scenario planning experience. It provides insights into the practical application of scenario analysis and its role in decision-making and strategic planning.
Frequently Asked Questions
What is scenario planning in strategic marketing?
Scenario planning is a technique that allows organizations to operate with more than one possible future in mind, rather than relying on a single, potentially inaccurate forecast.
Why is relying on a single forecast risky for businesses?
Historical examples, such as IBM's 1943 forecast of a tiny world market for computers or Bill Gates' 1981 comment on memory limits, show that even industry leaders can fail to anticipate future developments accurately.
What is the eight-step procedure for scenario development?
The eight-step procedure is a systematic methodology used to identify key driving forces and uncertainties to generate plausible future scenarios for strategic decision-making.
How did Shell use scenario planning successfully?
The oil company Shell achieved remarkable success in the 1970s by using scenario planning to anticipate and prepare for changes in the global oil market, making it a classic case study in business strategy.
What are key driving forces and uncertainties in this context?
Driving forces are the underlying trends (economic, social, technological) that shape the future, while uncertainties are the unpredictable factors that could lead to different outcomes.
- Quote paper
- Birgit Boldt (Author), 2003, Scenario Development, Munich, GRIN Verlag, https://www.grin.com/document/20548
