Elite Company Scenario Planning
Planning is an organized way for institutions or organizations to perceive about the future (Oppenheimer, 2016). Several people within the executive come up with some scenarios concerning how the future will look like and how this may alter an issue that cushions them. The steps to scenario planning procedure are; identifying objectives and scope, identifying and analyzing key compellers, collection and analysis of data, scenario development, application and maintaining and updating of results. Elite electronics Company is a company that has been experiencing high growth until the COVID-19 pandemic arose.
Identifying objectives and scope
What is the problem that is being analyzed?
What is the extreme that the company is trying to foresee?
What are the greeter external concerns that are likely to affect our scenarios?
What are the internal compellers that need be considered?
What risks are concerned with the scenario?
Is the important information, technology and skills available to develop and sustain plans about the scenario?
Elite hardware scenarios are based on the number of orders and how capable it is to accomplish the orders effectively within the next year. Now that the pandemic’s bad side was not predictable, the elite company decided to come up with significant events for every two weeks in predicting hindered accounts and the decreased capacity to accept goods by the retailers. The company suddenly lost orders from many customers who were operating retail shops. The rate at which infections occur and nationwide lockdown have directly affected sales. Measures put by the ministry of health, such as observing one to two meters, means that the company has a reduced ability to serve its customers. Suppliers, on the other hand, are also affected since they need to be tested before continuing with shipments. This means that there is a delay in product transportation and receiving of materials. The company tries to talk to retailers and customers and control reports from industries and government data to be on the better side of the pandemic impacts. However, the company is faced with uncertainties about its future, and hence, new sources of finance need to be sorted for it to sustain itself.
Work approach about the scenario planning
Activities not to consider
Avoid coming up with scenarios before deciding on the issues
Avoiding the development of many scenarios
Avoiding the development of the best scenario
Avoid paying attention to one scenario
Avoid concentrating on a scenario that has failed to work.
Activities to consider
Ensuring that each scenario shows an organized view concerning the future
Paying attention to material differences between scenarios
Clearly defining assumptions, forming relationships between drivers and restricting the number of scenarios formed
Protect commitments from top management, choose team members and orchestrate scenarios around important issues to be addressed and analyzed.
Shoe KPIs, and reinvigorate scenarios and bring up to date assumptions regularly.
Identifying key compellers
.Scenario 1: In 1 year time, the company will be able to expand its branches with more than ten offices in Europe
.Scenario 2: The Company continues to run its business paying attention to exportations of electronic products to Europe, and the market won’t be altered.
. Scenario 3: flights are barred from taking place, and therefore the company has to search for other markets.
Collection of data and analysis
The data collection is based on historical records, projections about the future, views on likely disruption sources, evaluation of the relationships between important drivers and future alternative hypotheses (Ramírez, 2016). The supply of electronic equipment is highly predictable in the short run. There will be more supply of electronic equipment in the following year. However, due to disruptions on supply and capacity to ship raw materials, the company is faced with uncertainties as to how the future may seem. The delay in transportation of products, observation of social distancing, and government restrictions on customer capacity. This trend is likely to change due to and supply to reduce. The company is faced with a decision to increase the firm size to accommodate more clients and also to increase the products in-store.
The first scenario is based on the assumption that the company has links with external markets and that any disruption in transporting the products can be discussed for the business to continue thriving. The company has safety materials such as protective equipment just in case a pandemic arises such as a deadly infectious disease. With this, the chances of retraining the business from the operation are quite minimal. In the past, when some parts of the globe experience Ebola, the company was able to use the protective equipment and therefore allowed to continue exporting the products. To know whether this scenario is developing, the company should have established at least five offices in Europe to check the progress of the scenario in six months. The global gross domestic product should rise by at least 2% as a measure of this scenario’s progress.
In the second scenario, the company assumes that the exportations will continue taking place even in the course of disruption by a pandemic. It is equipped with protective tools and that it can negotiate with Europe and continue exporting electronic products. Since the strategy is firm, the market won’t be altered, and it will continue exporting its products to Europe. In case the transportation is hindered for any reason, the company has established links with East African countries to continue exporting its products. The market size should not drop by more than 3% even in the event of a global pandemic to test whether the market has significantly changed or not. The number of electronic products exported should be maintained such that the cost of transportation does not surpass the returns to sustain the market demands.
In the last scenario, since the flights are barred from taking place, the company has to search alternative markets apart from Europe to continue running its business. The company had initially established links with other outlets; Uganda Tanzania and Zambia. Since Europe is not accessible at the moment, the company will sell its products locally and to the other three countries. However, to know whether the volume of exports has not reduced, the company will compare the amount that was initially being exported to Europe to that currently exported to Uganda, Tanzania, Zambia and locally. To test this, the countries must sign documents to acknowledge acceptance to trade with the company and that road transport necessitated since flights are no longer taking place. With that, it will have tested that it can have other alternative outlets that it can trade with apart from Europe.
Application of scenarios
Scenario 1, the company conducts all the sums together with aligning the mechanisms and policies to test whether the development of the scenarios can work (Gaižauskienė, 2018). The company adjusts its investment priorities and changes its expectations of performance. The negotiation with the European government as well as funding the establishment of the offices is done.
Scenario 2, the company continues to conduct its business paying attention to the exportation of electronic products so that the market is not changed. The company pays attention to significant export changes such as drop and rise of volume of exports to check if it is trying to sustain its market demands.
The company finds it hard to transport the products with other mentioned outlets after flights are barred. Road transportation in east African countries is poor and therefore the company cannot serve its outlets and also the risk of attack and theft of goods is very high in association with road transport. Due to that, the company increases the cost of the advertisement in the local market to increase the amount of local demand. It also negotiates with Europe to come up with ways they can allow flights to resume specifically to transport electronic products and continue operating the business. Elite electronic company wins both local and European markets, hence sustaining the demand but unable to trade with Uganda, Tanzania and Zambia.
Maintaining and updating
Due to increased uncertainties in the current easily changeable environment, it is quite difficult to foresee the risks associated with plans. The company treats scenario planning as so important and therefore adds it to its management (Gaižauskienė, 2018). Therefore, the company is able to establish an alteration in the current notions on which mechanism and plans are constructed. The company can also change its form of operations to keep in trend the already planned activities. When the assumptions that were made when the plan was being conducted changes, the company has to put aside the assumptions and come up with new ways of fulfilling the plan. The changed plan is then brought to date. Updating scenarios has its importance whereby the executive can go back to the initial scenario and develop an insight into what succeeded and what failed, and this provides an important to future uncertainties. It also helps to do away with dangers and chances of occurrence that have developed in the course of original scenario development. The company, therefore, revisited the data collected and analyzed initially and analyzed the effects of the material alteration in the scenarios on the current and plans. To effectively do this, the company put into consideration the fact that the relationship between the important compellers and the outcomes changes. The increased reliance on government support to finance the business operations is now difficult as the globe is struck with a pandemic and therefore brought much of lending to a standstill. The company changed this by establishing other sources of income for investment such as cutting down on labor costs; reducing the wages ant the size of the labor force.