DB FPX 8415 Assessment 4 Scenario and Alternative Futures

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Capella University

DB-FPX 8415 Strategic Decision Making

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Date

Scenario Planning Frameworks

Scenario planning frameworks serve as objective tools designed to formulate tactical solutions (Tighe, 2019). These frameworks are utilized to anticipate an organization’s future, effectively revealing potential environmental changes over time. Additionally, scenario planning is crucial for organizations to develop multiple strategies to mitigate unforeseen outcomes. A synthesis matrix has been developed based on four scenario-building frameworks, organized horizontally by four authors and vertically by key points. It is important to note that not all sources address every key point, resulting in some empty spaces. This matrix facilitates a clear evaluation of the differences among the four frameworks, enabling the selection of the most suitable one for planning the future of the pharmaceutical industry.

Part 1: Scenario Synthesis

Day & Schoemaker (2005)
Godet & Roubelat (1996)
Hussain et al. (2017)
Ramirez et al. (2017)

Synthesis Main Points

Evaluates the necessity for change within your company by recognizing and understanding early weak signals.
Identifies and evaluates strategic options through four criteria: relevance, consistency, likelihood, and transparency.
Analyzes your company’s historical limitations using road mapping and scenario planning.
Rather than forecasting your company’s future, focus on assessing its strengths and reframing perceptions.

It is common for businesses to employ scenario planning to explore alternatives for their future. This process identifies and applies various scenarios to business contingencies, enabling management to make informed decisions. Whether it involves assessing company needs by recognizing weaknesses early (Day & Schoemaker, 2005) or evaluating strategic options based on criteria like relevance and consistency (Godet & Roubelat, 1996), scenario planning is a valuable approach for exploring and preparing for future possibilities.

DB FPX 8415 Assessment 4 Scenario and Alternative Futures

Understanding your organization’s limitations and utilizing road mapping (Hussain et al., 2017) can enhance its effectiveness in chaotic environments. Strategic planning can be approached in various ways. Instead of focusing solely on predicting the future, it is beneficial to concentrate on your organization’s strengths to reshape perceptions (Ramirez et al., 2017). Ultimately, scenario planning consists of two main components: selecting a logical scenario and anticipating potential outcomes.

Understanding the Signals Early

Defines the vision for your company by asking pertinent questions and learning from past experiences. It is crucial to recognize and not overlook warning signs. In today’s business landscape, understanding the “what ifs” is vital. Organizations can achieve this by enhancing their peripheral vision (Day & Schoemaker, 2005) or by identifying key variables and posing the right questions (Godet & Roubelat, 1996). An organization may choose to create a roadmap instead of a scenario (Hussain et al., 2017). Rather than merely predicting “what ifs,” a company can reshape its strategy by actively exploring plausible scenarios (Ramirez et al., 2017).

Strategic Scenario Planning

Examines the needs and capabilities of the company. Once the scope is established, asking the right questions aids in determining how to address and guide the vision. It promotes the identification of key variables and participation in future workshops. This process involves experts analyzing the company and providing insights on new growth opportunities, integrating scenario planning with technology road mapping to reveal practical limitations. Formulating hypotheses and asking the right questions are crucial steps in defining prospective thinking.

Strategic scenario planning is vital for any business aiming to navigate various uncertainties (Ringland, 2010). To achieve a clear peripheral vision during scenario planning, a company must ask open-ended questions, ensuring precise responses (Day & Schoemaker, 2005). Furthermore, when identifying and evaluating strategic options, involving experts for analysis and reporting on potential opportunities is essential (Godet & Roubelat, 1996). Learning from past mistakes to prevent their recurrence (Hussain et al., 2017) and focusing on reasonable rather than likely weak signals (Ramirez et al., 2017) are also effective strategies for scenario planning.

Scenario Planning and Technology Road Mapping

Encourages the identification of blind spots from the past, including technological, political, and societal changes. It leverages the strengths of both scenario planning and technology road mapping. While it does not promote scenario planning in a hypothetical sense, it acknowledges the potential overestimation of technological change. Both scenario planning and technology road mapping are essential areas to explore when planning for a company’s future. However, they are not always utilized together when testing assumptions. Some scenario planning approaches advocate for technology road mapping (Day & Schoemaker, 2005). Additionally, some organizations use technology road mapping to address their limitations while benefiting from scenario planning (Hussain et al., 2017). Companies may perceive technological change as overestimated, emphasizing the importance of reframing and perception instead (Ramirez et al., 2017).

Scenario Planning to Address Uncertainty

Enhancing your company’s vision involves recognizing warning signs early. To mitigate uncertainties, it is essential to analyze the market to anticipate and address potential issues. By integrating these approaches, your company can develop a ‘radar’ system to monitor uncertainties over time. It is crucial to identify factors that are unlikely to change. While uncertainty cannot be completely eliminated through unrealistic predictions, it can be reduced, allowing decisions to be made based on hypothetical future scenarios.

Learning to navigate the possibilities of uncertainties through scenario planning can significantly reshape an organization’s future (Ringland, 2010). This approach can provide a company with a head start in seizing opportunities or addressing threats (Day & Schoemaker, 2005). Additionally, it can assist in reducing or anticipating uncertainties (Godet & Roubelat, 1996) and help address past limitations (Hussain et al., 2017). Ultimately, scenario planning enables a company to make informed decisions aimed at improving areas of concern (Ramirez et al., 2017).

DB FPX 8415 Assessment 4 Scenario and Alternative Futures

To determine the most suitable scenario planning framework for the future of the pharmaceutical industry, the synthesis matrix mentioned above was created. The top header lists the authors, while the side columns outline the main points from each author regarding scenario planning. This matrix serves to organize and categorize the various perspectives presented by each source, facilitating the selection of the most appropriate framework. Upon evaluating the four sources, it became clear that certain frameworks were more effective than others.

Companies operating in rapidly changing environments may require well-developed peripheral vision, unlike those in more stable settings (Day & Schoemaker, 2005). Additionally, organizations that ask the right questions should focus on identifying key variables and participating in future workshops (Godet & Roubelat, 1996). Moreover, companies that learn from their past mistakes can potentially avoid repeating them in the future (Hussain et al., 2017). Finally, organizations that concentrate on reasonable possibilities rather than likely outcomes may be able to sidestep certain challenges (Ramirez et al., 2017).

When applied correctly, these frameworks can effectively guide a company through both short-term and long-term changes. While no framework guarantees successful recovery in the future, the appropriate selection of scenario methods can empower a company to manage its responses to unforeseen events. By increasing awareness of potential outcomes, leaders can begin to identify warning signs of challenges, allowing them to plan and respond effectively (Tighe, 2019).

Part 2: Scenario Framework for the Pharmaceutical Industry

As a consultant tasked with conducting a decade-long forecast for MiracleDrugs, it is recommended to utilize Day & Schoemaker’s framework. After reviewing the industry discovery summary, the best approach to managing uncertainty involves defining the scope, asking the right questions, and learning from past experiences. Once the vision is established, relevant questions can be posed to facilitate forward-thinking (Day & Schoemaker, 2005). Key questions might include:

Is resource allocation adequate?- Do we require new leadership to elevate the company?- Are our employees sufficiently skilled?- How can we learn from our past mistakes?- What is our current situation?Once these questions are addressed, the scenario framework can be implemented. For any organization, analyzing its history can serve as a valuable learning tool when applied effectively (Day & Schoemaker, 2005). By examining the history of the pharmaceutical industry, leaders can identify the most and least effective incentives. Understanding past successes and failures can provide insights into why certain incentives performed better than others. Acknowledging history is essential for illustrating a company’s trajectory and measuring its success (Tighe, 2019).

Is the company experiencing growth or decline? Has it achieved the objectives set a decade ago? Integrating information from the defined scope, asking the right questions, and leveraging past experiences will inform the planning process for setting decade goals. Comprehensive planning is crucial for preparing for the future, whether that involves enhancing current practices, implementing significant changes, or maintaining the status quo. Given the rapid evolution of the pharmaceutical industry, Day & Schoemaker’s framework is highly recommended.

DB FPX 8415 Assessment 4 Scenario and Alternative Futures

The complexities of the fast-evolving pharmaceutical industry further support this recommendation. By identifying the gaps between the current state and the desired state of generic pharmaceutical and medicine manufacturers, leaders can begin to strategize on how to address these discrepancies in response to uncertainties. Research indicates that revenue in the Generic Pharmaceutical Manufacturing industry has declined over the past five years (Kennedy, 2021). In addition to falling revenues, the generic industry faces several other challenges (Stockman, 2021). Some of these issues include the fact that “Generic drugs significantly contribute to the rapid rise in overall drug costs” (Kennedy, 2021, para. 7). Additionally, many organizations within the pharmaceutical sector encounter challenges such as shifts in pricing structures, reduced patent protections, increased litigation, and more. For instance, the U.S. pharmaceutical supply chain is currently grappling with shortages, escalating costs, and inconsistent access to essential medications, largely due to a heavy reliance on a limited number of manufacturers to fulfill demand (Kennedy, 2021). While existing laws and regulations govern the pharmaceutical industry, some companies could benefit from enhanced awareness regarding how to prepare for uncertainties.

Furthermore, utilizing road maps in the pharmaceutical industry can assist in identifying and organizing uncertainties. Road maps illustrate the supply chain process and highlight specific areas that require improvement. Industry experts note that there is a persistent issue with shortages within the supply chain (Kennedy, 2021). The lack of alternative manufacturers to fill gaps when supplies dwindle exacerbates these shortages. Given this unfortunate situation, the pressing question is: what actions can leaders take now to prevent future shortages?

DB FPX 8415 Assessment 4 Scenario and Alternative Futures

By analyzing historical data, leaders can examine the fluctuations in the supply chain and develop road maps to identify more effective solutions to supply chain challenges (Stockman, 2021). Understanding the supply chain process is crucial for learning how to respond to potential crises and address the “what ifs.” Despite advancements in technology, the pharmaceutical industry continues to face persistent challenges. The supply chain remains volatile, particularly during crises (Kennedy, 2021). Some companies even outsource their production needs, which can create complications when supply chains do not meet expected demands, necessitating last-minute adjustments. Road maps are essential for this industry, as they can address ongoing supply chain issues and highlight specific areas for improvement that leaders should consider.

In conclusion, while a scenario framework is not a definitive solution, it can effectively guide a company through uncertainties when applied correctly. By contemplating future possibilities, a company can better position itself to confront upcoming challenges. For the pharmaceutical industry, implementing a scenario planning framework to project the next decade could potentially help resolve the supply chain issues many companies face. Additionally, road mapping and learning from past experiences can keep organizations prepared for the future. Therefore, it is suggested that Day & Schoemaker’s framework is the most suitable for planning the future of the pharmaceutical industry.

References

Day, G. S., & Schoemaker, P. J. H. (2005). Scanning the periphery. Harvard Business Review.

Godet, M., & Roubelat, F. (1996). Creating the future: The use and misuse of scenarios. Long Range Planning, 29(2), 164-171.

Hussain, M., Khattak, Z., Rizwan, A., Latif, K., & Shim, E. (2017). Scenario planning and the technology roadmap: A combined approach. Asian Social Science, 13(4), 1-13.

Kennedy, R. (2021). Industry outlook: 2021 generic pharmaceutical manufacturing industry in the US – Market research report.

Ramirez, R., Mukherjee, M., Vezzoli, S., & Maki, L. (2017). Scenarios as a scholarly methodology to produce “interesting research.” Futures, 96, 10-20.