Note: This post applies to both (a) business planning and the firm’s flexibility to change as needed and (b) personal planning and YOUR flexibility to change as necessary. In either case, we must be able to adapt to an uncertain future.
Scenario planning involves planning for the future by understanding that different marketplace outcomes may occur in response to any strategy and that each possible marketplace outcome must be planned for to avoid the worst case scenario.
Here’s a simple example: Suppose that a major soda company introduces a new non-carbonated cola beverage into the marketplace. These are just a few scenarios that are possible:
The sales of the new beverage meet expectations and do not cannibalize the sales of other company products. Overall company revenues and profit rise.
The sales of the new beverage meet expectations, but slightly cannibalize the sales of other company products. Overall company revenues and profits rise slightly.
The sales of the new beverage meet expectations, but greatly cannibalize the sales of other company products. Overall company revenues stay the same, and profits fall somewhat due to the investment in the new item.
The sales of the new beverage do not meet expectations and do not cannibalize the sales of other company products. Overall company revenues rise very little, and profits fall a lot due to the investment in the new item.
The premise of scenario planning is to anticipate the possibility of each of these outcomes occurring and have in place a pre-planned framework (contingency plan) to deal with each scenario.
Recently, Shardul Phadnis, Chris Caplice, and Yossi Sheffi wrote an article for the MIT Soan Management Review titled “How Scenario Planning Influences Strategic Decisions.” The authors reached three major conclusions:
“The use of multiple scenarios is not necessarily an antidote for overconfidence.One should not assume that simply using multiple scenarios to evaluate a long-range decision will help alleviate the negative effects of decision makers’ overconfidence in their own judgment.”
“Scenarios influence judgment — and their content matters.More than half the judgments in our studies changed after single-scenario evaluations. Scenario users became more favorable of investing in an element — either by increasing confidence in their original recommendation to invest, decreasing confidence in their original recommendation to not invest, or changing their recommendation to favor the investment — when they found the element useful in a scenario.”
“The use of multiple scenarios can nudge executives towards more flexible strategies.Executives often choose strategies optimized for a particular environment. While such strategies may perform well in the environment envisioned at the time of their implementation, they may not be easily adaptable to new opportunities or in response to unexpected threats. Under such circumstances, evaluating strategic decisions using multiple scenarios can help executives appreciate the importance of choosing more flexible assets or approaches — even if doing so is not the most optimal choice for present-day conditions.”
What is it? Ransomware is malware. The hackers demand payment, often via Bitcoin or prepaid credit card, from victims in order to regain access to an infected device and the data stored on it.
Why does it matter? Because of the ease of deploying ransomware, criminal organizations are increasingly relying on such attacks to generate profits.
Who does this affect? While home users have traditionally been the targets, healthcare and the public sector have been targeted with increasing frequency. Enterprises are more likely to have deep pockets from which to extract a ransom.
When is this happening?Ransomware has been an active and ongoing threat since September 2013.
How do I protect myself from a ransomware attack? A variety of tools developed in collaboration with law enforcement and security firms are available to decrypt your computer.
Sanders adds: “For those who have been infected, theNo More Ransomproject — a collaboration between Europol, the Dutch National Police, Kaspersky Lab, and Intel Security — provides decryption tools for many widespread ransomware types.
Here are a couple of informative infographics byLogRhythm:
Get involved in university life — “Besides meeting new people you can learn new skills, particularly if you are involved in organizing events or take on a leadership role in the society.”
Ask career services for professional advice — “Many people wait until they have nearly finished their courses, but it is better if you can work with it [career services] from your first year. It can help you choose a suitable career and advise what employers are looking for in a new recruit. Make sure you get advice on your resume and attend a session to practice your interview skills.”
Keep a record — “You will have a record of your grades but you also need to be able to tell employers the skills you have developed and how you use them.”
Get good grades — “While high grades aren’t everything, many organizations still ask for your GPA.”
Volunteering — “Companies like employing people who have given their time for free as it shows you are prepared to help others to try to make a difference. If you don’t have time to volunteer every week you may be able to help out on a special project.”
Work experience — “Many students work part-time, and gaining work experience as part of your degree really improves your employment opportunities. Whether it is a short internship or a 12-month sandwich placement you will be gaining hands-on, practical experience.”
Networking — “It’s not what you know it’s who you know. Attend careers fairs and company presentations to speak to the people involved in recruiting graduates. Also create a professional social media profile. LinkedIn is the largest network though there may be others specific to the industry you want to enter.”
Understand the graduate job market — “Each organization has its own approach to recruitment, so research the company and tailor your application. Timing your applications and fitting them around your exams/coursework is important.”
Be flexible and mobile — “If you are prepared to move, you will increase the number of jobs for which you can apply.”
Be confident — “If you get through to the later stages of interviews, remember you have earned the right to be there. The company has seen potential in you and wants to find out more. There is a job out there for everyone; you just need to be persistent to find the right one for you.
“When done right, networking is an incredibly valuable investment of every professional’s time and effort. It helps us make meaningful business connections, get feedback, and advance our careers. And best of all, it pays significant dividends over time. So why does it seem so unpleasant sometimes? It can feel fake, it’s exhausting, and frankly, standing alone in a sea of unknown faces with nametags and cheese plates can be utterly painful.”
According to Kolowich, here are common networking mistakes that people make:
“You’re waiting to build your network until you need it most.”
“You aren’t keeping up your personal brand.”
“You’re afraid to attend networking events by yourself.”
“You don’t follow up with personal messages.”
“You ask the same questions everyone else is asking.”
“You dominate networking conversations.”
“You don’t venture outside your existing network.”
“You don’t ask for anything, or you ask for too much.”
You probably know that first impressions matter; that’s why you learned to look people in the eye and firmly shake their hands. But the art of successfully interviewing for a job is probably not something that you discussed over the dinner table. Just because you got in the door to interview for a job opportunity and put on a suit doesn’t mean that you’re a shoo-in for a job. There’s an art to a successful interview. Unfortunately, not knowing what to do during this crucial time make the difference in landing the job of your dreams.
Perhaps you know some of what it takes to successfully interview. You’ve likely done a little research on the company—but have you plotted out how you’re going to get to the location? How about questions: Sure, you might meet a human resources contact, but do you have the names of every other person who will be in the room? It never hurts to think through, practice, and make all the right steps in a job interview, and this graphic byAiken Cloudcan help.
by Joel R. Evans and Barry Berman, the Zarb School of Business
This is the sixth in our series of six columns on hints for price-setting by small firms. How wouldyourespond to these questions?
How are prices displayed? There are various options for displaying prices, depending on the pricing philosophy (such as a prestige image versus discounting): The home page of a Web site can present an image that is appropriate for the pricing strategy (limited stating of prices, emphasis on sale prices, etc.) Exterior store windows can show prices for selected sale items and/or highlight a store’s orientation (“Service that is a cut above the rest,” “The best brands at the best prices,” etc.). A small firm can compete by featuring selected sale items; but these prices must be promoted to shoppers so that they are aware of the good values at local stores. Interior store displays can emphasize or de-emphasize prices. To emphasize prices, a retailer can use large in-store signs that show prices of given items, promote a particular color price tag to indicate particularly good bargains, leave items in cartons, and have plain displays (such as dump bins) and fixtures. To de-emphasize prices, a retailer can use only small price tags that are attached directly to merchandise or have salespeople responsible for communicating prices (as done in upscale apparel stores and jewelry stores); there would be no overt references to prices in the store and the atmosphere would be stylish.
What payment method(s) do you accept? Until about 20 years ago, large firm were the most apt to accept credit cards. They saw the value of them and got good terms from issuers. Many chains even developed their own cards to stimulate more customer loyalty. Today, things have changed; and all types of firms (big and small, general merchandise and food, bricks-and-mortar and online, etc.) now accept credit and/or debit cards. Why? Issuers have lowered fees, credit cards are widely advertised and easier for firms to process, more consumers than ever before actively use credit/debit cards and consider if given cards are accepted prior to entering Web sites or stores (hence, the success of the Visa campaign against American Express), smaller firms can use PayPal which is any easy way for them to accept multiple cards, and cash payments don’t work online. In choosing whether to accept credit and/or debit cards, a seller should consider: Are prices of individual items high? Is the total customer bill (the sum of the individual items bought on one shopping trip) high? Am I interested in increasing the impulse purchases shoppers make? Do competitors accept credit/debit cards? If the answer to any of these questions is yes, credit cards should be accepted.
Do you understand both of these terms? Elastic demand? Inelastic demand? With elastic demand, shoppers perceive firms in the same category (such as gas stations, supermarkets, or pharmacies) to be rather similar. These firms must always be sure that their prices are competitive or they will lose business. With inelastic demand, shoppers perceive firms in the same category to be dissimilar, due to their locations, product assortments, customer service, etc. These firms can set premium prices since their unique characteristics encourage many customers to be brand/store loyal.
What do you think about everyday low pricing? This approach has enabled Walmart to maintain a discounter image, attract a steady stream of price-conscious shoppers, reduce advertising expenditures, and run less frequent sales. However, for the typical firm, the better phrase is really “everyday fair pricing.” This means that each seller must strive to set its REGULAR PRICES in a way that appeals to the chosen customer market and that fairly reflects the merchandise, customer service, ambience, etc. offered by that firm. From the customer’s vantage point, prices must be perceived as fair – every day.
We hope that as you think more about the way that prices are set (and that you do so at least once or twice a year), and that you will peruse our series on this topic and see the “big picture” of pricing.