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 are objective tools designed to facilitate tactical decision-making (Tighe, 2019). These frameworks are utilized to anticipate an organization’s future, revealing potential environmental changes over time. Additionally, scenario planning is crucial for ensuring that an organization develops multiple strategies to mitigate unforeseen outcomes. A synthesis matrix has been created based on four scenario-building frameworks, organized horizontally by four authors and vertically by key points. It is important to note that some sources may not address all key points, resulting in some empty spaces. This matrix aids in clearly evaluating the differences among the four frameworks, allowing for 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 need for change within your company by recognizing and understanding weak signals early on.
• Identifies and assesses strategic options using four criteria: relevance, consistency, likelihood, and transparency.
• Analyzes your company’s past limitations through road mapping and scenario planning.
• Rather than attempting to predict your company’s future, focus on assessing its strengths and reframing perceptions.

It is common for businesses to utilize scenario planning to explore alternatives for their future. This process involves identifying and applying various scenarios to business contingencies, enabling management to make informed decisions. Whether it involves evaluating your company’s needs by recognizing weaknesses early (Day & Schoemaker, 2005) or identifying and assessing strategic options based on criteria such as relevance, consistency, likelihood, and transparency (Godet & Roubelat, 1996), scenario planning serves as a valuable approach for exploring and preparing for potential outcomes.

Understanding Your Organization’s Limitations

Recognizing your organization’s limitations and employing road mapping (Hussain et al., 2017) can enhance its effectiveness in chaotic situations. Strategic planning can be achieved through various methods. Instead of focusing solely on predicting your organization’s future, emphasize its strengths to reframe perceptions (Ramirez et al., 2017). Ultimately, scenario planning consists of two primary components: selecting a logical scenario and forecasting potential outcomes.

Recognizing Signals Early

Establishes what your company’s vision should be by asking the right questions and learning from past experiences. It is essential to notice and not overlook warning signs. In today’s business environment, understanding the “what ifs” is crucial. One approach an organization can take is to enhance its peripheral vision (Day & Schoemaker, 2005). Another method involves 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 the “what ifs,” a company can reshape its strategy by actively exploring plausible scenarios (Ramirez et al., 2017).

Strategic Scenario Planning

Strategic scenario planning involves assessing the company’s needs and capabilities. Once the scope is established, asking the right questions is crucial for determining how to address and shape the vision. This process encourages the identification of key variables and participation in future workshops. It includes expert analysis of the company, which provides insights on new growth opportunities, and integrates scenario planning with technology road mapping. By combining these two approaches, organizations can uncover practical limitations. Formulating the right questions and developing a hypothesis are vital steps in fostering prospective thinking.

Strategic scenario planning is critical for any business aiming to navigate various uncertainties (Ringland, 2010). To achieve a clear peripheral vision during scenario planning, a company must pose open-ended questions, ensuring that the responses are precise (Day & Schoemaker, 2005). Additionally, when identifying and evaluating strategic options, it is beneficial to involve experts who can conduct analyses and report on potential opportunities (Godet & Roubelat, 1996). Learning from past mistakes to prevent their recurrence (Hussain et al., 2017) and focusing on reasonable possibilities rather than likely outcomes (Ramirez et al., 2017) are also effective strategies for scenario planning.

Scenario Planning and Technology Road Mapping

This approach promotes road mapping and the identification of past blind spots, including technological, political, and societal changes. It leverages the strengths of both scenario planning and technology road mapping. While it does not solely advocate for scenario planning, it emphasizes the importance of hypotheticals. The impact of technological change is often overestimated. Both scenario planning and technology road mapping are essential areas to explore when planning for a company’s future, although they are not always utilized together when testing assumptions. Some scenario planning frameworks encourage the integration of technology road mapping (Day & Schoemaker, 2005). Additionally, organizations may use technology road mapping to address their limitations while benefiting from scenario planning (Hussain et al., 2017). While companies may perceive technological change as overestimated, they should focus on reframing their perceptions instead (Ramirez et al., 2017).

Scenario Planning to Reshape Uncertainty

This process enhances your company’s vision by recognizing warning signs early. Reducing uncertainties involves analyzing the market to anticipate and mitigate them. By combining both methods, your organization can create a ‘radar’ to monitor uncertainties over time and identify factors that are unlikely to change. While uncertainty cannot be entirely eliminated through unrealistic predictions, it can be reduced, allowing decisions to be made based on hypothetical futures.

Learning to explore the possibilities of uncertainties through scenario planning can significantly reshape an organization’s future (Ringland, 2010). It can provide a company with a head start in seizing opportunities or addressing threats (Day & Schoemaker, 2005). Additionally, it can help a company reduce or anticipate uncertainties (Godet & Roubelat, 1996) and assist in overcoming 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 above was created. The top header lists the authors, while the side columns outline the main points from each author regarding scenario planning. The purpose of this matrix is to organize and compare the different perspectives presented by each source, facilitating the selection of the best framework. After evaluating the four sources, it became clear that certain frameworks stood out.

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). Furthermore, companies that learn from their past mistakes can potentially avoid repeating them in the future (Hussain et al., 2017). Lastly, organizations that concentrate on reasonable possibilities rather than likely outcomes may be able to sidestep certain challenges (Ramirez et al., 2017).

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

Part 2: Scenario Framework for the Pharmaceutical Industry

As a consultant tasked with conducting a ten-year outlook for MiracleDrugs, it is recommended to utilize Day & Schoemaker’s framework. After reviewing the industry discovery summary, the most effective way to manage uncertainty is by clearly 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 considerations 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?After addressing these critical questions, the scenario framework will be implemented. For any organization, analyzing its history can serve as a valuable learning tool when applied effectively (Day & Schoemaker, 2005). By examining the historical context of the pharmaceutical industry, leaders can identify both 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 pertinent questions, and leveraging past experiences will inform the planning process for setting long-term 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 particularly well-suited for this purpose.

DB FPX 8415 Assessment 4: Scenario and Alternative Futures

The complexities inherent in 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 address these discrepancies and respond strategically to uncertainties. Research indicates that revenue in the Generic Pharmaceutical Manufacturing sector has declined over the past five years (Kennedy, 2021). In addition to falling revenues, the generic industry faces several challenges (Stockman, 2021). Some of these issues include:

“Generic drugs are a major driver of the rapidly increasing cost of drugs overall” (Kennedy, 2021, para. 7). Furthermore, many organizations in the pharmaceutical sector encounter difficulties such as shifts in pricing structures, reduced patent protections, increased litigation, and more. For instance, the U.S. pharmaceutical supply chain currently grapples with shortages, rising costs, and inconsistent access to essential medications due to a heavy reliance on a limited number of manufacturers to meet demand (Kennedy, 2021). While existing laws and regulations govern the pharmaceutical industry, some companies could benefit from greater awareness in planning for uncertainties.

Lastly, utilizing road maps in the pharmaceutical industry can help identify and organize uncertainties. Road maps illustrate how the supply chain operates and highlight specific areas that require improvement. Industry experts note that there is a persistent issue with shortages in the supply chain (Kennedy, 2021). With no alternative manufacturers available to fill gaps when supplies dwindle, shortages remain a significant concern. The pressing question is: what can leaders do 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 better solutions for supply chain challenges (Stockman, 2021). Understanding the supply chain process is essential for preparing to address potential crises and responding to “what if” scenarios. Despite advancements in technology, the pharmaceutical industry continues to face ongoing 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 anticipated demands and require last-minute adjustments. Road maps are crucial for this industry, as they can address persistent issues within the supply chain and identify 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, employing a scenario planning framework to project a decade into the future could help address the supply chain issues many companies face. Additionally, road mapping and learning from past experiences can keep organizations prepared for what lies ahead. Therefore, it is believed that Day & Schoemaker’s framework is the most suitable choice 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.

DB FPX 8415 Assessment 4 Scenario and Alternative Futures

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

Ringland, G. (2010). Scenario planning: Managing for the future (2nd ed.). John Wiley & Sons Ltd.

Stockman, F. (2021). The generic drug industry has a dirty secret. Retrieved from https://www.nytimes.com/2021/08/06/business/generic-drug-shortage-pharmaceuticals.html

Tighe, L. (2019). Building the future: Scenario planning for sustainable development. Harvard Business Review.