Strategic Outcome:
These are simple low-risk strategies about product positioning and demographics (also termed as adapter strategies). Level one adapter strategies should try to make radical changes in the way the industry works and create value-added products and business processes. Although, being an innovator helps to counter level one uncertainty it increases amount of uncertainty for others in the industry.
Examples of Uncertainty: Typical market cycles
Level 2 - Uncertainty Level: Low - Moderate
Forecasting Situation: Alternative Future Forecast
Potential Tools:
Managers must develop a set of discrete scenarios wherein particular attention should be paid to the likely paths the competition might take to reach the alternative future
Estimation of the competitors' strategies
The input cost variation for a company's products/services
Strategic Outcome:
Market “shapers” or business leaders emerge to prevent competitors from creating excess capacity and reduce margins. Before an upswing in demand they would create capacity or consolidate their position through Mergers and Acquisitions.
Examples of Uncertainty: Regulatory Framework
Level 3 - Uncertainty Level: Moderate - High
Forecasting Situation: Future Range
Potential Tools:
Scenarios (not more than 5 most probable scenarios) that provide a number of outcomes are developed.
Strategic Outcome:
Shapers try to lead the market and take it into a different direction through improved, technology, products or service.
Examples of Uncertainty: Entering a new market / geographic region
Level 4 - Uncertainty Level: High
Forecasting Situation: Ambiguity
Potential Tools:
Aim to procure as much information about specific issues as possible.
Anticipate the evolution of the market in the future
Analyze key attributes of all companies that failed and succeeded in that market
Strategic Outcome:
The shaper should provide vision to the industry as there are no potential products developed yet; no knowledge about competition, demand and technological standards is available yet. Companies should create a high degree of leverage and evaluate all the options rigorously and regularly.
Examples of Uncertainty: Transitional and emergence after an economic/ technological/ regulatory shock
|