Scenario Planning Process

• Stage 1 : Orientation (Define Focal Issued)

• Stage 2 : Exploration (Define Driving Force)
• Stage 3 : Scenario Creation (Define strategies,
action, & changes)
• Stage 4 : Option Consideration (Compare each
scenario)
• Stage 5 : Integration (Develop early warning
signal)
 ABOUT THE COMPANY
• United Parcel Service (UPS) as the world’s largest
package delivery company, the headquarter is
located in Atlanta – Georgia.
• It operates primarily in US & delivers more than
15 million packages a day to about 6.1 million
customers in 200 countries around the world &
emphasizes the ability to provide service to
almost any one in the world at any address.
• The competitors are Federal Express (FedEx), DHL
International, and United States Postal Service.
STRATEGIC PLANNING AT UPS 1997
FOCAL ISSUE : The future of UPS’s global business in an ever-changing
competitive environment
DIFINE DRIVING FORCES - AXES OF UNCERTAINTY :
UPS managers representing different functions and generally reporting
to a Management Committee member, discussion over driving forces
and critical uncertainties.
• The vertical axis : Demand Characteristics
• Horizontal Axis : Market Environment
• Market Environment : Varies from international to local and regional
factors
• Demand characteristics: Vary from traditional consumers to pro-
sumers
They produced various scenarios with a complete picture of ever
changing and dynamic competition.
STRATEGIC PLANNING AT UPS 1997
RESULT OF THE MEETINGS
Tangible and intangible solutions, change in the company’s purpose
from serving the package-delivery needs of customers to enabling
global commerce.
SCENARIO CREATION - Defining themes for future:
• Proactive shift directly to the end consumer, eliminating usage
barriers
• Leveraging this end-consumer positioning to win additional
business-to-business customers within the demand chain
• Focus on customer solutions that integrated goods movement and
financial and information services
• Identification of opportunities to be selectively captured across
entire demand chains, with integrated solutions between companies
• Maintenance of a global growth perspective.
STRATEGIC PLANNING AT UPS 1997
Four Strategic Imperatives :
• Winning Team : Attracting and developing a
highly skilled, diverse, and aligned global
workforce
• Value-Added Solutions : providing customers
with value-added services combining movement
of goods, information, and funds
• Customer Focus : Building customer loyalty and
expanding UPS’s services worldwide
• Enterprise Excellence : Creating an environment
of high-quality service and value
STRATEGIC PLANNING AT UPS 1997
OPTION CONSIDERATION OF FOUR SCENARIOS :
1. Tangled Paths (Prosumers & Regional / National)
• Highly competitive business environment
• Strong regional and national regulations
• Desire for more variation in products
2. Regressive World (Traditional Consumers & Regional /
National)
• Strong regional and national regulations
• More traditional supply chain, competitive landscape, and set
of consumers
STRATEGIC PLANNING AT UPS 1997
3. Global Scare Prevails (Prosumers & Global)
• Slow adoption of new technology due to stable demand
• More traditional consumers and industry consolidation
4. Brave New World (Traditional Consumer & Global)
• Deregulated globalized marketplace
• Mass customization of goods and services to proactive consumers
• New forms of competition and virtual organizations’ alliances and
business web
The results in 2004 : Roughly 60% of the characteristic of the scenarios
were the same as in 1997. The other 40% were what’s interesting
unpredictable. Some of the hypotheses developed in 1997 such as
industry consolidation and continue growth of the internet had become
reality.
 SCENARIO PLANNING 2017
The Horizon 2017 session was similar to the 1997 session in format and process, with
three important variations.
FOCAL ISSUE : The future of UPS world market and major regional markets in 2017
DEFINE DRIVING FORCES - These axes formed the framework for four scenarios :
• The upper-left quadrant was the ‘Company City´ future dominated by large
corporations, with a growing middle class and the proliferation of powerful,
integrated supply- focused Technologies.
• Lower-left quadrant described a ‘Bordered Disorder´ world, with a highly
regulated, protectionist environment with slow growth in developing nations,
guarded intellectual property and technology, and an increase in security threats
and environmental and financial-shocks.
• Lower-right quadrant, ‘Connected Chaos´ defined a future full of global unrest ,
‘amoral´ commerce, and informal connectivity that was difficult for governments to
control.
• Upper-right quadrant, called ‘Networks without Borders,´ defined a highly
connected, stable world with low barriers to market entry and fast-moving
technologies aimed at consumers.
 SCENARIO PLANNING 2017
SCENARIO CREATION & OPTION CONSIDERATION :
1. Company City (Harmonious,Aligned,Free,Fluid,Borderless &
Traditional,Proprietary,Incremental)
• Extremely competitive environment leads to consolidation
• Business partners to be carefully chosen
• Education, health, & financial support for workforce
• Global trend, socially responsible company
2. Bordered Disorder (Chaotic,Fragmented,Restricted,Frictionladen,Bordered
& Traditional,Proprietary,Inc
• Competitive advantages from efficiency, cost management, & security
• Regional political relationship necessary
• Brand focus on security & trust with local flavor
• Workforce shortages, more unionism
 SCENARIO PLANNING 2017
3. Network without borders (Proactive,Open,Collaborative &
Harmonious,Free,Fluid, Borderless)
• Maintenance of close ties with dynamic markets
• Focus on confederations, collaborations, & alliances
• Nimble & agile brand
• More diverse, global workforce
4. Connected Chaos (Proactive,Open,Collaborative
&Chaotic,Fragmented,Restricted,Bordered)
• Demand will be uneven & difficult to forecast
• Modular & adaptable technology for local needs
• Portfolio is localized by regional & segment needs, but experience in
uniform globally
• Decentralized decision making with local accountability
 EARLY WARNING SIGNAL 2017
1. Company City (Harmonious,Aligned,Free,Fluid,Borderless
& Trad’l,Proprietary,Incremental)
• More lax enforcement of anti trust laws
• Fewer trade restrictions / tariffs
• Increase in company sponsored migration

2. Network without borders (Proactive,Open,Collaborative &

Harmonious,Free,Fluid, Borderless)
• Increasing rates of literacy
• Growing global virtual communities
• Increasing adoption of EFT
• Freer movement of people
 EARLY WARNING SIGNAL 2017
3. Bordered Disorder
(Chaotic,Fragmented,Restricted,Frictionladen,Bordered &
Traditional,Proprietary,Incremental)
• Bilateral trading agreement rescinded
• Volatile currency valuation
• Retreat to regional economies
• Increase in number of refugees

4. Connected Chaos (Proactive,Open,Collaborative

&Chaotic,Fragmented,Restricted,Bordered)
• Global institutions under increased attack
• Resurgence of nationalistic cultures
• More trade restrictions / tariffs
• More guest worker programs