Page 173 - 100 Great Business Ideas: From Leading Companies Around the World (100 Great Ideas)

'it (.11.11 . 10 writing con be used ill solving several tvp".,,1 1 , 101)
!ems. It is illost often used in preparing alternative strate-
gies for various possible future conditions. Typically the sce-
nario forecasts involve analyzing the organization's internal
and external environments for information about its projected
strengths and weaknesses, its future opportunities and
threats (SWOT). The firm is interested in building up
strengths and overcoming weaknesses in order to take ad-
vantage of opportunities and mitigate threats. Internally, the
firm studies factors such as its technology, functional prow-
ess, resources, capabilities, employees, and management.
Externally, it examines factors such as competitors' antici-
pated actions, the expected economy, and the changing na-
ture of customer's buying practices.

Three to five key drivers of the company's future are deter-
mined—for example, changing demographics or technology.
Future scenarios are then forecast on the basis of the likely
impact of these key drivers on from five to ten key factors
such as market share, customer responses, buying patterns,
the economy, and research and development needs. Each
scenario focuses on one or two drivers. For example, if
changing technology is seen as critical to a firm's future, a
scenario is depicted in which the likely impact of changing
technology on the key factors is described. Other scenarios
are created using another key driver. Thus, the impacts of
an aging population could be described in terms of the same
factors—market share, customer responses, buying patterns,
the economy, research and development needs, and so on.
Figure 5.3 presents a typical summary of four scenario fore-
casts. These four scenarios were created by Norwegian Oil
& Gas in an attempt to understand the future need for oil
and gas, and hence their need to drill for oil and gas. From
these scenarios, they developed a R & D strategy for oil and
gas exploration. Note how the drivers often result in the
titles of the scenarios. The scenario writers identify oppor-
tunities (and threats) and determine what the company needs
in the way of increased strengths and reduced weaknesses
to take advantage of those opportunities. Strategies are de-
termined on the basis of this SWOT analysis.54