The document summarizes UPS's scenario planning process in 1997 and 2017. In 1997, they identified 4 scenarios based on axes of uncertainty around market environment and demand characteristics. In 2017, they identified 4 new scenarios based on axes of harmonious vs chaotic markets and traditional vs open technologies. For each scenario, they considered strategic options and identified early warning signals to monitor changes.
The document summarizes UPS's scenario planning process in 1997 and 2017. In 1997, they identified 4 scenarios based on axes of uncertainty around market environment and demand characteristics. In 2017, they identified 4 new scenarios based on axes of harmonious vs chaotic markets and traditional vs open technologies. For each scenario, they considered strategic options and identified early warning signals to monitor changes.
The document summarizes UPS's scenario planning process in 1997 and 2017. In 1997, they identified 4 scenarios based on axes of uncertainty around market environment and demand characteristics. In 2017, they identified 4 new scenarios based on axes of harmonious vs chaotic markets and traditional vs open technologies. For each scenario, they considered strategic options and identified early warning signals to monitor changes.
The document summarizes UPS's scenario planning process in 1997 and 2017. In 1997, they identified 4 scenarios based on axes of uncertainty around market environment and demand characteristics. In 2017, they identified 4 new scenarios based on axes of harmonious vs chaotic markets and traditional vs open technologies. For each scenario, they considered strategic options and identified early warning signals to monitor changes.
Download as PPTX, PDF, TXT or read online from Scribd
Download as pptx, pdf, or txt
You are on page 1of 14
Scenario Planning Process
• Stage 1 : Orientation (Define Focal Issued)
• Stage 2 : Exploration (Define Driving Force) • Stage 3 : Scenario Creation (Define strategies, action, & changes) • Stage 4 : Option Consideration (Compare each scenario) • Stage 5 : Integration (Develop early warning signal) ABOUT THE COMPANY • United Parcel Service (UPS) as the world’s largest package delivery company, the headquarter is located in Atlanta – Georgia. • It operates primarily in US & delivers more than 15 million packages a day to about 6.1 million customers in 200 countries around the world & emphasizes the ability to provide service to almost any one in the world at any address. • The competitors are Federal Express (FedEx), DHL International, and United States Postal Service. STRATEGIC PLANNING AT UPS 1997 FOCAL ISSUE : The future of UPS’s global business in an ever-changing competitive environment DIFINE DRIVING FORCES - AXES OF UNCERTAINTY : UPS managers representing different functions and generally reporting to a Management Committee member, discussion over driving forces and critical uncertainties. • The vertical axis : Demand Characteristics • Horizontal Axis : Market Environment • Market Environment : Varies from international to local and regional factors • Demand characteristics: Vary from traditional consumers to pro- sumers They produced various scenarios with a complete picture of ever changing and dynamic competition. STRATEGIC PLANNING AT UPS 1997 RESULT OF THE MEETINGS Tangible and intangible solutions, change in the company’s purpose from serving the package-delivery needs of customers to enabling global commerce. SCENARIO CREATION - Defining themes for future: • Proactive shift directly to the end consumer, eliminating usage barriers • Leveraging this end-consumer positioning to win additional business-to-business customers within the demand chain • Focus on customer solutions that integrated goods movement and financial and information services • Identification of opportunities to be selectively captured across entire demand chains, with integrated solutions between companies • Maintenance of a global growth perspective. STRATEGIC PLANNING AT UPS 1997 Four Strategic Imperatives : • Winning Team : Attracting and developing a highly skilled, diverse, and aligned global workforce • Value-Added Solutions : providing customers with value-added services combining movement of goods, information, and funds • Customer Focus : Building customer loyalty and expanding UPS’s services worldwide • Enterprise Excellence : Creating an environment of high-quality service and value STRATEGIC PLANNING AT UPS 1997 OPTION CONSIDERATION OF FOUR SCENARIOS : 1. Tangled Paths (Prosumers & Regional / National) • Highly competitive business environment • Strong regional and national regulations • Desire for more variation in products 2. Regressive World (Traditional Consumers & Regional / National) • Strong regional and national regulations • More traditional supply chain, competitive landscape, and set of consumers STRATEGIC PLANNING AT UPS 1997 3. Global Scare Prevails (Prosumers & Global) • Slow adoption of new technology due to stable demand • More traditional consumers and industry consolidation 4. Brave New World (Traditional Consumer & Global) • Deregulated globalized marketplace • Mass customization of goods and services to proactive consumers • New forms of competition and virtual organizations’ alliances and business web The results in 2004 : Roughly 60% of the characteristic of the scenarios were the same as in 1997. The other 40% were what’s interesting unpredictable. Some of the hypotheses developed in 1997 such as industry consolidation and continue growth of the internet had become reality. SCENARIO PLANNING 2017 The Horizon 2017 session was similar to the 1997 session in format and process, with three important variations. FOCAL ISSUE : The future of UPS world market and major regional markets in 2017 DEFINE DRIVING FORCES - These axes formed the framework for four scenarios : • The upper-left quadrant was the ‘Company City´ future dominated by large corporations, with a growing middle class and the proliferation of powerful, integrated supply- focused Technologies. • Lower-left quadrant described a ‘Bordered Disorder´ world, with a highly regulated, protectionist environment with slow growth in developing nations, guarded intellectual property and technology, and an increase in security threats and environmental and financial-shocks. • Lower-right quadrant, ‘Connected Chaos´ defined a future full of global unrest , ‘amoral´ commerce, and informal connectivity that was difficult for governments to control. • Upper-right quadrant, called ‘Networks without Borders,´ defined a highly connected, stable world with low barriers to market entry and fast-moving technologies aimed at consumers. SCENARIO PLANNING 2017 SCENARIO CREATION & OPTION CONSIDERATION : 1. Company City (Harmonious,Aligned,Free,Fluid,Borderless & Traditional,Proprietary,Incremental) • Extremely competitive environment leads to consolidation • Business partners to be carefully chosen • Education, health, & financial support for workforce • Global trend, socially responsible company 2. Bordered Disorder (Chaotic,Fragmented,Restricted,Frictionladen,Bordered & Traditional,Proprietary,Inc • Competitive advantages from efficiency, cost management, & security • Regional political relationship necessary • Brand focus on security & trust with local flavor • Workforce shortages, more unionism SCENARIO PLANNING 2017 3. Network without borders (Proactive,Open,Collaborative & Harmonious,Free,Fluid, Borderless) • Maintenance of close ties with dynamic markets • Focus on confederations, collaborations, & alliances • Nimble & agile brand • More diverse, global workforce 4. Connected Chaos (Proactive,Open,Collaborative &Chaotic,Fragmented,Restricted,Bordered) • Demand will be uneven & difficult to forecast • Modular & adaptable technology for local needs • Portfolio is localized by regional & segment needs, but experience in uniform globally • Decentralized decision making with local accountability EARLY WARNING SIGNAL 2017 1. Company City (Harmonious,Aligned,Free,Fluid,Borderless & Trad’l,Proprietary,Incremental) • More lax enforcement of anti trust laws • Fewer trade restrictions / tariffs • Increase in company sponsored migration
2. Network without borders (Proactive,Open,Collaborative &
Harmonious,Free,Fluid, Borderless) • Increasing rates of literacy • Growing global virtual communities • Increasing adoption of EFT • Freer movement of people EARLY WARNING SIGNAL 2017 3. Bordered Disorder (Chaotic,Fragmented,Restricted,Frictionladen,Bordered & Traditional,Proprietary,Incremental) • Bilateral trading agreement rescinded • Volatile currency valuation • Retreat to regional economies • Increase in number of refugees
4. Connected Chaos (Proactive,Open,Collaborative
&Chaotic,Fragmented,Restricted,Bordered) • Global institutions under increased attack • Resurgence of nationalistic cultures • More trade restrictions / tariffs • More guest worker programs