Scenario planning is a tool developed in the early 1970s by multinational oil companies in response to the unforeseen impacts of the oil price shocks. Led by Shell Petroleum, scenarios were developed in an attempt to model the impact of unforeseen events beyond the traditional 3-5 year strategic planning cycle.
Scenario planning is intended as a complement to normal strategic planning. While most strategies tend to have a life time of 3-5 years, business conditions can change dramatically during this time. Under Navigator's methodology, scenarios are used to model or predict uncertainties for time periods that usually extend from 3 - 10 years into the future.
The application of scenarios are a vital complement to strategic planning. They analyse and explore specific questions, enabling groups of managers and other stakeholders to improve their understanding of the strategic business environment, as well as the magnitude of changes faced by a company.
Some specific scenarios generated by Navigator on behalf of our clients include:
Impact and Chances of Cypriot Reunification
What are the main drivers and barriers to re-unification? What economic, political and social trends affect reunification? How much will reunification cost, and how will it be financed? What opportunities and threats will be generated? How should companies respond to emerging sectoral and economic changes and opportunities?
Impact of EU Accession in Cyprus and Lithuania
During the 2003-2004 pre-accession period, Navigator implemented scenario plans for customers in Cyprus, Lithuania and Ukraine on EU Accession. Questions dealt with included the long-term impact on competitiveness of accession? What role will migration, lifting investment barriers, market liberalisation, the Acquis Communautaire and the adoption of the Euro play for national companies? How should national companies prepare for competition in specific sectors?
Organisational and Strategic Change
How should a specific company change to assure competitiveness within a specific market/s and sector/s? What are the emerging competitive and technological threats and changes? How are markets and customers changing? In 5 years, how should the company operate to assure competitiveness? What are the key organisational and human resource changes that need to be made?
Regional Conflict in the Middle East
What could be the economic impact of a new regional conflict? What major threats exist to peace and stability, and what chance does each threat scenario have of occurring? What would be the impact on energy prices, tourism, food & merchandise trade and capital flows of a new conflict? How should regional multinationals and trading firms prepare for such events?
Real Estate Development in Cyprus
What is the future of the current real estate boom? What are the main drivers and barriers, and how can these be quantified? What are the "hard" demand sources, versus speculative demand, and what drives each demand source? What triggers would force a devaluation of real estate prices, and how can these be measured? What magnitudes of a slow-down could be quantified, and are there any historical examples which can be learned from? How will a potential slow-down affect banks, insurance companies, real estate developers and other key stakeholders?