How To Think About the Future - Scenario Forecasting

A growing number of businesses use scenario forecasting to look into the future. But forecasting experts say that asking the right questions about the future may be more valuable than finding answers.

If you could see the future, what would it be? Great economic prosperity, another depression, or something in between? What will cause the next radical transformation of society?

An increasing number of business people are using a technique called "scenario forecasting" to think about these questions. They often begin the process with the expectation that they will learn how to look into the future. They soon learn that answering questions about the future isn't nearly as useful as learning how to ask them.

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Strategic Marketing Plan

The information for this article was derived from many sources, including Michael Porter's book Competitive Advantage and the works of Philip Kotler. Concepts addressed include 'generic' strategies and strategies for pricing, distribution, promotion, advertising and market segmentation. Factors such as market penetration, market share, profit margins, budgets, financial analysis, capital investment, government actions, demographic changes, emerging technology and cultural trends are also addressed.

There are two major components to your marketing strategy:

• how your enterprise will address the competitive marketplace
• how you will implement and support your day to day operations.

In today's very competitive marketplace a strategy that insures a consistent approach to offering your product or service in a way that will outsell the competition is critical. However,.........
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The Marketing Mix and 4 Ps

What is marketing? The definition that many marketers learn as they start out in the industry is:

Putting the right product in the right place, at the right price, at the right time.

It’s simple! You just need to create a product that a particularly group of people want, put it on sale some place that those same people visit regularly, and price it at a level which matches the value they feel they get out of it; and do all that at a time they want to buy. Then you’ve got it made!

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Net Present Value - NPV

The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.

NPV analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.

Formula:

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Issues Workshops (Scenarios Analysis Continue)

The third stage of developing scenarios analysis is "Issues Workshops"
These workshops have the overall purpose of forcing the teams' thinking into the future by:

• testing the areas of the 'natural agenda' that are likely to have a crucial role in shaping the future
• understanding the limits to which key factors may be stretched
• debating key issues about which conflicting evidence has emerged in the interviews
• identifying and exploring the potential interaction between key factors emerging from the synthesis
• drawing out the implications for the client organization of the threats and opportunities emerging from the process, leading to the identification of strategic option
• identifying further areas where additional research is needed

The number of Issues Workshops needed will depend on the scope and complexity of the interview material. Issues Workshops are usually focused on related groups of issues under a generic heading, e.g. economic performance, marketing, culture, environment, technology, human resources, trading restraints, etc.

It is useful to plan the sequence of workshops so that the external issues lead on to market issues and both end with internal issues, e.g. starting with economic issues and finishing with internal self-renewal.

The fourth stage of developing Scenarios Analysis will be covered in next post.

Delivered Duty Paid (Incoterm 2000 continue)

Delivered Duty Paid (DDP) means that the seller pays for all transportation costs and bears all risk until the goods have been delivered and pays the duty.

Delivered Duty Unpaid (Incoterm 2000 continue)

Delivered Duty Unpaid (DDU) means that the seller pays for all transportation costs and bears all risk until the goods have been delivered, but does not pay for the duty.

Delivered Ex Quay (Incoterm 2000 continue)

Delivered Ex Quay (DEQ) means the same as DES, but the passing of risk does not occur until the goods have been unloaded at the port of destination.

Delivered Ex Ship (Incoterm 2000 continue)

Delivered Ex Ship (DES) is an Incoterm. Where goods are delivered ex ship, the passing of risk does not occur until the ship has arrived at the named port of destination and the goods made available for unloading to the buyer. The seller pays the same freight and insurance costs as he would under a CIF arrangement.
In order words, DES requires the seller to deliver goods to a buyer at an agreed port of arrival. The seller remains responsible for the goods until they are delivered.

Delivered At Frontier (Incoterm 2000 continue)

Delivered At Frontier (DAF) can be used when the goods are transported by rail and road. The seller pays for transportation to the named place of delivery at the frontier. The buyer arranges for customs clearance and pays for transportation from the frontier to his factory. The passing of risk occurs at the frontier.

Synthesis, Desk Research and Feedback (Scenarios Analysis Continue)

This is continuous of second stage of developing Scenarios Analysis that I have mentioned in previous post.
After finishing the first two parts of second stage, we have to follow up with the following steps to finish up the second stage.

• Synthesis

The report containing the material sorted under the 'natural agenda' is examined to:

• identify the higher order issues underlying the interview scripts;
• pull out conflicting views on issues (for further exploration);
• find memorable quotations to use in workshops and reports;
• reveal significant gaps in the material (for further interview or research).

The process of synthesis will also begin to reveal the relative importance of different issues in the minds of respondents. This pattern should not be taken "at face value" but may indicate where further evidence is needed or where challenge should be directed.

• Desk Research
  

It will often be useful to use a range sources, working from the clients' information base or external data via the web, to establish some reference points relating to trends in the external world and the competitive environment.

• Feedback

The result of the first stage will discussed with the clients in order to clarify arrangements for the first conference/workshop, the Issues Workshop. This workshop will examine the issues identified so far, and modify or prioritize the factors considered.

This is the end of second step. I will cover up the third stage of developing Scenarios Analysis; Issues Workshops, in next post.

Carriage and Insurance Paid To (Incoterm 2000 continue)

For Carriage and Insurance Paid to (CIP), the passing of risk occurs when the goods have been delivered into the custody of the first carrier. This means that the buyer bears all risk and any additional costs occurring after the goods have been so delivered.It is the same as CPT except that the seller also pays for the insurance. Seller is required to obtain insurance only on minimum cover, additional coverage is responsibility of buyer or must be agreed between seller and buyer. Under CIP seller is also required to clear the goods for export.

Carriage Paid To (Incoterm 2000 continue)

Carriage Paid To (CPT) can be used for all modes of transport including multimodal transport. The seller pays for the freight to the named point of destination. The buyer pays for the insurance. The passing of risk occurs when the goods have been delivered into the custody of the first carrier.

Cost, Insurance and Freight (Incoterm 2000 continue)

Cost, Insurance and Freight (CIF) is a common term in a sales contract that may be encountered in international trading when ocean transport is used. When a price is quoted CIF, it means that the selling price includes the cost of the goods, the freight or transport costs and also the cost of marine insurance. CIF is identical in most particulars with CFR, and the same comments apply, including its applicability only to conventional maritime transport. In addition to the CFR responsibilities, the seller under CIF must obtain in transferable form a marine insurance policy to cover the risks of transit with insurers of repute. The policy must cover the CIF price plus 10 per cent and where possible be in the currency of the contract.

In a contract of sale, the cost of the goods, the insurance, and the freight to the destination are included in the contract price. Unless there is something in a CIF contract to indicate the contrary, the seller completes the contract when the merchandise is delivered to the shipper, the freight to the point of destination is paid, and the buyer has been forwarded the Bill of Lading, invoice, insurance policy, and receipt showing payment of freight.

Cost and Freight (Incoterm 2000 continue)

Cost and Freight (CFR) means that the seller pays for transportation to the port of shipment , loading and freight. The buyer pays for the insurance and transportation of the goods from the port of destination to his factory. In order words, under CFR, the seller does not have to procure marine insurance against the risk of loss or damage to the goods during transit. The passing of risks occurs when the goods pass the ship's rail at the port of shipment which means that this term cannot be used for airfreight or land transport and also is inappropriate for most containerised sea shipments - the term CPT is the appropriate one for these.

Diagnosis, or Identifying the Focal Issue (Scenarios Analysis Continue)

Having finished the first stage which is Project Startup, we are now ready to go to second stage which is “Diagnosis, or Identifying the Focal Issue”.

Basically we can break down five parts in this stage. Let me go through each part individually.

1. Interviews

After the client has specified the scope of the scenarios, the foundation of the process is interviews of respondents, and for the likelihood that they will have meaningful insights into the forces shaping its future. The interview should encompass all the important constituencies within the client organization and reach external participants whose contribution may be important both individually and as a whole.

2. Analysis

Once a small number of interviews have been completed the issues within the material will be brought out and ordered for further processing. This is done by preparing 'trial agenda' of issues, ordered within three main areas:

• external issues
• the business interface
• internal issues

Each item in the ‘trial agenda’ will be numbered so that interview scripts can be broken down into the appropriate item number. When the ‘trial agenda’ has been stabilized it becomes the ‘natural agenda’ for the study.

When all the interview scripts have been marked up, they can be sorted by computer to produce a breakdown of the interview material under ‘natural agenda’ heading. When sorting, all the respondent names are removed to ensure that views are not attributed to individual.

The above are pretty much in deep about the first two parts of second stage of developing SScenarios Analysis. The rest three parts will be covered in the next post. Thank you again for visiting Zephyr Free Online Learning Center. Hope to see you again.

Free Aongside Ship - FAS (Incoterm 2000 continue)

Free Alongside Ship (FAS) means that the seller pays for transportation of the goods to the port of shipment. The buyer pays loading costs, freight, insurance, unloading costs and transportation from the port of destination to his factory. The passing of risk occurs when the goods have been delivered to the at the quay at the port of shipment.

Free Carrier - FCA (Incoterm 2000 continue)

Free Carrier (FCA) requires the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. Costs for transportation and risk of loss transfer to the buyer after delivery to the carrier. It can be used for all modes of transportation including multimodal transport, such as in shipping containers where the ship's rail plays no relevant part in determining a shipping point.

Project Startup (Scenarios Analysis Continue)

In previous post, I have mentioned steps to develop Scenarios Analysis. In this post, I will go in detail about the first step which is Project Startup. This stage is the most crucial stage for the success for project. Here are the matters which should be included in this stage:

• Appointment of an Advisory Board in the the client organization to discuss the project as it proceeds: and in addition the formal reporting requirement for budget and progress. These should be documented and copied to all team members.
• Defining scope of the project (topic, time scale).
• Appointment of Project Manager, a Client Manager and a Technical Consultant with separate roles - for budget and time scale, to keep the client informed, and to advise on methods.
• A realistic timetable needs to be set depending on the time available from team members, reporting requirements, Board meetings, etc.
• Agree a format for exchange of documents, Powerpoint slides, etc., and categorise information sources already to hand (hard copy, web portals, data sources).
• A one-day walk through of the stages of the project for the entire team to ensure that everybody understand about each coming up stage of the project.
  

Free on Board (Incoterm 2000)

Free on Board (FOB) means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays freight, insurance, unloading costs and transportation from the port of destination to the factory. The passing of risks occurs when the goods pass the ship's rail at the port of shipment. Internationally the term specifies the port of loading, e.g. "FOB New York" or "FOB Vancouver". There are two kinds of FOB; "FOB shipping point" and "FOB destination," to distinguish when the title of goods passes from the seller to the buyer.

Under the terms of "FOB shipping point," the title of the goods passes to the buyer at the shipping point. Similarly, under the terms of "FOB destination", the title of the goods passes to the buyer when the goods arrive at their destination.

The distinction is important because it determines who pays for the shipping costs of the merchandise: whoever holds the title to the merchandise at the time of its shipping pays for its transportation costs unless otherwise noted (e.g., freight prepaid or freight collect). Also, it is important that if the shipment is damaged while traveling the owner must file the freight claim.

Thats pretty much in brief about Free on Board (FOB). Explanation of other incoterm 2000 will be covered in coming up posts. Thank you again for visiting Zephyr Free Online Learning Center.

Ex Work (Incoterms 2000 Continue)

Ex Work (EXW) means that the seller X has the goods ready for collection at his premises (Works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. In the other words, the seller will not take any responsibility to deliver the products sold out of his own premises. The buyer will have to come to seller premises to pick up the product they have bought. This term requires that the buyer must be able to carry out export formalities in the country of supply, these days almost impossible.

Explanation of Free on Board (FOB) is coming up in next post. Thank you for visiting Zephyr Free Online Learning Center.

Incoterms 2000

Incoterms are international rules that are accepted by governments, legal authorities and practitioners worldwide for the interpretation of the most commonly used terms in international trade. They either reduce or remove altogether uncertainties arising from differing interpretations of such terms in different countries.
The scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold, but excluding "intangibles" like computer software.
Each Incoterm is referred to by a three-letter abbreviation. There are 13 Incoterms as below:

1. Ex Work (EXW),
2. Free On Board (FOB),
3. Free Carrier (FCA),
4. Free Alongside Ship (FAS),
5. Cost and Freight (CFR),
6. Cost, Insurance and Freight (CIF),
7. Carriage Paid To (CPT).
8. Carriage and Insurance Paid To (CIP),
9. Delivered at Frontier (DAF).
10. Delivered Ex Ship (DES),
11. Delivered Ex Quay (DEQ),
12. Delivered Duty Unpaid (DDU), and
13. Delivered Duty Paid (DDP).

Detailed explanation of each incoterm will be covered in coming up posts. Thank you for visiting Zephyr Free Online Learning Center. Hope to see you again.

Overall Steps for Scenarios Analysis

In previous post, I have mentioned about what Scenarios Analysis and how it is useful. In this post, I am going to mention about general steps to develop Scenarios Analysis.

Genrally there are five steps to develop Scenarios Analysis.
1. Project Startup,
2. Diagnosis, or Identifying the Focal Issue,
3. Issues Workshops,
4. Development of Scenarios, and
5. Investigation, Development and Evaluation of Options.

I will post detail of each step in next posts. It will help us more understanind of developing Scenarios Analysis. Thank you again for visiting Zephyr Free Online Sharing. Hope to see you again.

Scenarios Analysis

Scenarios Analysis is a tool to reduce the risk which can occur in the future. It gives you a set of possible future. It is not giving you one snap shot future forecast. It is not forecasting tool. People normally do forecasting assuming a certain variable. But I would say nothing is certain in this uncertain world. What if something go wrong in the future? What will happen to your future? Scenarios Analysis is the tool that help you cope with variation of those variable. Scenarios Analysis can be used in several fields. It is not restricted to business use only. You can use to War Game, Political Campaign, Disaster Planning, Financial Management and so on. There is almost nothing that Scenarios Analysis cannot work on.Ok let me stop here for a while. I will post about steps of Scenarios Analysis in another post.Thank you for visiting. Hope to see you again.