The major driving forces of scenario planning can be categorized into four categories as follows:
1. Social Dynamics:
Social dynamics in broadest terms incorporate major demographic trends like, age-mix, income, education and lifestyles and even the change in the value systems. To take an example lifestyle changes now shift customers’ perceptions to more value-added products and services.
Customers are now more informed, and they can question the company’s products and services, when they fail to meet their expectations. Change in the income level also (particularly when it is on the higher side) makes customers to indulge in premium-priced products and services, with more disposable income being available in their hands.
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2. Economic Issues:
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Both macro- and micro-economic trends influence the scenario plans. Macro- economic trends shape the economy as a whole. With more global interrelatedness, failure of one major multinational or transnational organization (like, Lehman Brothers) has a catastrophic effect on many organizations and also the whole world economy. Recent global meltdown and its effects are now an important issue for us to consider. Similarly micro-economic issues like, modus operandi of competing organizations could also spark the need for change and could be a basis for scenario planning.
3. Political Issues:
Political beliefs and ideologies of the ruling parties and the strong oppositions, legislative and regulatory changes, etc., could also be the basis for scenario plans for an organization. The US policy on outsourcing particularly of the Government elect, will now be the major issue for the Indian outsourcing business and so also for the IT-enabled Sectors (ITES).
4. Technological Issues:
New emerging technologies influence the business per se. With the development of Plasma and LCD technology, conventional CTVs have now become almost obsolete. Similar changes in the CDMA and GSM technology have revolutionized the mobile phone industry.
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In many other areas, changes in the technology have also influenced the change in their product or service-mix. Organizations that understood and gauged such changes beforehand, could develop their appropriate action plans to change and accordingly could emerge as the winners. Those who failed to do so have languished behind.