Scenario and Alternative Futures
Question
Overview
Executives regularly make decisions in the face of uncertainty. When planning the future of the organization, how should leaders make assumptions for the near or long term? Scenario planning is a technique for identifying forward-looking alternative realities in which the organization can sustain itself.
A scenario is defined by Godet and Roubelat (1996, p. 8) as a "description of a future situation and the course of events which allows one to move forward from the original situation to the future situation." Scenario frameworks are used for preparing for alternative futures but not as a vehicle for forecasting the future.
Business scenarios are used as analytic tools to inform strategic decisions. A business scenario is a view of a possible competitive environment based on a set of assumptions about important uncertainties that face the business and industry and may affect organizational performance. For example, decisions on competitive strategy such as new product development are based on projections of product and market conditions.
Using frameworks, companies can create scenarios, allowing leaders and managers to be more cognizant of the external environment and status of their company. Scenarios can be of three major categories: (1) exploratory, starting from past trends leading to a likely future; (2) anticipatory or plausible built on different definitions of the future, desired or feared (the Oxford method); and (3) probabilistic stance (best case/worst case) (Godet & Roubelat, 1996; Ramirez et al. (2017).
This assignment gives you the opportunity to evaluate the four scenario-building frameworks presented in the assigned readings and apply the frameworks to plan for the future of one segment of the pharmaceutical industry. You will use the Scenario and Alternative Futures Template to complete your assignment.
Instructions
Industry Segments
Choose one of the following industry segments for this assignment:
United States name-brand pharmaceutical manufacturers develop prescription and over-the-counter products that are used to prevent or treat illnesses in humans or animals. Name-brand drugs and medication have patent protection. This industry does not include nutritional supplement or cosmetics manufacturers. In 2020 the industry size was $205 billion in revenue (Kennedy, 2021, 32541a).
United States generic pharmaceutical and medicine manufacturers develop prescription and over-the-counter drug products that are used to prevent or treat illnesses in humans or animals. Generic drugs are produced and distributed without patent protection, and industry operators are not significantly engaged in the research and development of new drugs. The industry does not include manufacturers of nutritional supplements or cosmetic beauty products. In 2020 the industry size was $58 billion in revenue (Kennedy, 2021, 32541b).
Part 1: Scenario Synthesis
The first portion of your assignment requires you to evaluate the following four scenario frameworks by critically assessing their main ideas or constructs and synthesizing the research findings. You will evaluate the research of Day & Schoemaker (2005), Godet & Roubelat (1996), Hussain et al. (2017), and Ramirez et al. (2017) using the Scenario Synthesis Matrix (Table 1) section of the Scenario and Alternative Futures Template [DOCX]. Remember, as in all of the course assignments, all assigned and researched articles should be entered into your Capstone Literature Matrix.
Day, G. S., & Schoemaker, P. J. H. (2005). Scanning the periphery. Harvard Business Review, 83(18), 135–148.
Godet, M., & Roubelat, F. (1996). Creating the future: The use and misuse of scenarios. Long Range Planning, 29(2), 164–171.
Hussain, M., Tapinos, E., & Knight, L. (2017). Scenario-driven road mapping for technology foresight. Technological Forecasting and Social Change, 124, 160–177.
Ramirez, R., Churchhouse, S., Palermo, A., & Hoffmann, J. (2017). Using scenario planning to reshape strategy. MIT Sloan Management Review, 58(4), 31–37.
The matrix is a synthesis, not a summary. A synthesis requires different main points or arguments presented by the authors from each of the scenario articles on their respective scenario frameworks. Complete the following steps:
Evaluate and identify the main points of each article.
Populate the first column of the synthesis matrix with the main points.
Work down the column from article to article. How does each article relate to the main points identified? Note: some articles may not cover all of the main ideas listed. Leave the field blank if the article does not address that main point.
Complete the final column: your synthesis.
Provide an introduction to the matrix and the process steps you followed. The matrix itself will be followed by a written summation of your findings on scenario constructs and frameworks and their application.
Part 2: Scenario Framework for Pharmaceutical Industry
You are a consultant hired to facilitate a meeting of executives at MiracleDrugs to conduct a decade-futures look. As the consultant, review the industry discovery summary of your research in the IBISWorld industry database that you previously provided to the client. Complete the following for this section:
Identify which scenario framework from Part 1 you will use to facilitate the meeting and explain why you chose this one over the others.
Identify five current state pharmaceutical industry trends or performance indicators essential to begin developing 10-year scenarios.
Based upon the selected framework, create five trigger questions for the executive team to use in creating 10-year pharma scenarios.
Remember to choose the name-brand pharmaceutical industry as discussed in US Industry (NAICS) Report 32541A or the generic pharmaceutical industry using US Industry (NAICS) Report 32541B.
Trigger questions are provocative prompts for creating innovative solutions to problems. "What if" is a great way of asking trigger questions that would shake up or change the industry.
Justify your selection and include the current industry outlook based on your research. To help you in your analysis, take the time to review the Day and Schoemaker (2005) article Scanning the Periphery, which offers valuable insights on the skill sets needed for futures thinking.
Note: You will need a minimum of three references in addition to the assigned readings. Add any new references to the Capstone Literature Matrix [XLSX] and include the Excel document with your assignment submission.
Your assignment should include the following headings:
Introduction.
Part 1: Scenario Synthesis.
Part 2: Scenario Framework for Pharmaceutical Industry.
Conclusion.
References.
Review the assignment scoring guide to ensure that you meet all criteria before submitting your assignment.
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Solution
Scenario and Alternative Futures
When
faced with uncertainty, executives regularly make decisions through the
scenario planning technique. Scenario planning is a mechanism of denoting the
realities of forward-looking alternatives, leading to organizational
sustainability. Companies used business scenarios as analytic instruments to
inform business choices. Business scenarios also view potential competitive
domains based on assumptions about uncertainties that face the industry and
business, which may influence organizational performance. This research
evaluates the scenario-building frameworks highlighted in the assigned readings
by critically examining their main ideas and constructs and identifying which
scenario framework is suitable for facilitating a pharmaceutical meeting.
Part 1: Scenario Synthesis
|
Godet & Roubelat,
(2003) |
Hussain et al. (2017) |
Your
Synthesis |
|||
|
A |
Although the past is not the most
accurate predictor of the future, it can illuminate blind spots in a company
or industry. |
All who proclaim to predict the
future are liars. |
Scenario planning is a modern
foresight technique used in technology strategy growth. |
Instead of predicting the future,
enterprises need to bolster their capabilities to deal with uncertainty. |
In life, it is not the most
intelligent of species, nor the strongest who flourish, but the ones most welcoming
to change. |
|
B |
Research indicates that people filter
and ignore vast amounts of information that reach their senses. |
The future is not written anywhere. So
it has to be constructed. |
Technology road mapping typically
assumes a single scenario or a straight-line projection and can become less critical
in the face of sudden, systemic, or volatile change. |
A novel approach to scenario planning
can help organizations restructure their long-term strategies by developing
several plausible scenarios. |
A scenario planning technique can be essential
and credible if transparent, coherent, likely, and relevant. |
|
C |
Almost all surprises have discernible
antecedents. |
Even though the world is
diversifying, the trajectory of change is unknown. |
Scenario planning does not entail
predicting the future; it entails preparing an organization for many
prospective futures. |
Instead of tying the company's future
to a strategy geared to a single set of events, numerous senior executives believe
that intelligent management benefits from a deeper understanding of the
current prospects afforded by multiple views regarding possible futures. |
Scenario planning can be utilized in
inter-organizational domains. |
|
D |
In assessing the current landscape,
managers should separate signals from noise. |
A pre-active, anti-fatalistic, and
pro-active attitude is essential in the accelerating speed of change, the
uncertainties of the future, and the increasing complexity of interactions
and phenomena. |
Scenario planning presents a chance
to envision plausible future states and thus helps develop risk-reduction
strategies to avoid potential threats and take advantage of opportunities. |
Scenario planning became prominent
after the Second World War and gained popularity in the corporate realm in
the late 1960s and 1970s. |
Knowledge is gained with
scenario-planning activities. |
|
E |
Companies in unique, quickly changing
environments need well-developed peripheral vision. |
In modern society, anticipation is
imperative. |
Although scenario planning is
extensively used in organizational strategy development, there are numerous
instances of its application in different contexts like specific technologies
or industries. |
While various approaches to scenario
planning have risen since the Second World War, the Oxford scenario planning
mechanism is based on probability by identifying the part of the uncertainty
that is unpredictable. |
There are no one scenario planning
technique but various construction methods (some sophisticated, some simplistic). |
Part 2: Scenario Framework for Pharmaceutical Industry
Pharmaceutical
manufacturers (like MiracleDrugs) create over-the-counter and prescription
products to treat or prevent ailments in animals or humans. Hence, these
companies need to conduct a decade-future look because future events can catch
these companies by surprise and cripple their operations. For example, in 2020,
Moderna and Pfizer revealed preliminary outcomes from the phase three coronavirus
vaccine examinations to be at least 95% effective in preventing the illness.
AstraZeneca also reported its vaccine to be highly effective. With these briefings,
the scope of uncertainties narrowed for business executives as they saw a
potential end to the crisis.
However, Schwartz (2020) says
that many questions remain in his almost 50 years of scenario planning. Like
the researcher, the world had never witnessed the uncertainty that arose from
the COVID-19 outbreak. Hence, leaders require guidance on how to plan for the
future. The sales teams of many companies have been monitoring the numerous
uncertainties surrounding COVID-19 since March 2020 (Schwartz, 2020). As a
result, they have formulated various scenarios that highlight a selection of possible
critical outcomes and helped show this range of possibilities for leaders to
consider. Considering potential effects and uncertainties can help any
organization make transparent choices during significant change.
Identify
Which Scenario Framework from Part 1 you Will use to Facilitate the Meeting
The Oxford
Scenario Planning Approach (OSPA) is what I will use to facilitate the
executive meeting. How may the Oxford Scenario Planning Approach (OSPA) assist
in navigating COVID-19's volatility, unpredictability, novelty, and confusion?
Admittedly, it has been beneficially employed by several businesses, scientific
and intergovernmental organizations, and non-governmental organizations
(Ramirez & Lang, 2020). However, it has been emphasized that when pandemic
situations have been conducted, even in recent years, they have not been
quickly adopted and transformed into policy.
According to
Ramirez and Lang (2020), this has a lot to do with one of the OSPA's basic
principles: one must begin the scenario design process by establishing the
intended user and usage. This is much too often not followed. Suppose one does
not initially ascertain the user and purpose, and there is no obvious user or
purpose. In that case, the scenario set will be (unsurprisingly and unhappily)
ineffective and unacted upon (Ramirez & Lang, 2020). The pandemic's nature
influences how scenario planning might be more successfully undertaken in its
midst - both to grasp how things could be after it passes to prepare for and
aid with recovery and to deal with it urgently as it develops.
Identify
Five Current State Pharmaceutical Industry Trends or Performance Indicators
Essential to Begin Developing 10-Year Scenarios
1.
Clarity
on the Difference Between Scenario and Contingency Planning
Typically,
contingency planning entails limiting risk – it may be an extreme and terrible
danger. One determines the significance of risk and then makes a contingency
plan if the dangerous circumstance materializes. A good example is purchasing a
fire extinguisher or preparing an army (Ramirez & Lang, 2020). This is in
contrast to scenario planning, which is concerned with predicting future
hazards and discovering new possibilities, partnerships, and communities. Thus,
scenario planning highlights possible incidents that may need the
implementation of a contingency plan.
2.
Paying
Attention to Anchoring
Anchoring determines
one's more outstanding or lower judgments based on previously supplied external
data. This is sometimes advantageous. However, the pandemic's severity
highlights a predisposition toward 'anchoring bias' — a state of mind
captivated by the present circumstance (Ramirez & Lang, 2020). Scenario planning
assists in overcoming anchoring by including fresh, diverse voices and freeing
the power of dissent to enhance the quality of judgment calls.
3.
Stretch
Plausibility
Well-off
individuals in leadership positions have personally experienced the uncertainty
(TUNA) associated with the outbreak. Thus, the plausibility of any given
scenario set may now be extended and made more complicated – and therefore more
illuminating and valuable – than it could even a few years ago.
4.
Considering
Shorter Time Horizons
Non-linear change
and the speed at which exponential change occurs are well-known concepts. As a
result, the longer-term has reduced, allowing for scenarios to be performed
over shorter periods (Ramirez & Lang, 2020). Scenario sets are valuable
because they allow leaders to look at the world through the eyes of a few
fictitious characters, and that viewpoint is what makes them so effective.
5.
Moving
Online and Adapting the Duration of Sessions
The scenario set
can be produced online as people become more isolated, with day-long workshops
trimmed and sessions redesigned. As a result, more scenario set iterations can
also be expected.
Five
Trigger Questions for the Executive Team to use in Creating 10-Year Pharma
Scenarios
I.
Is
the Burden of Chronic Illnesses Soaring?
Chronic illnesses
such as diabetes are becoming more prevalent worldwide. In addition, as
increased longevity compels many nations to raise the retirement age, many
individuals will be working at the onset of these illnesses (White, 2007). As a
result, chronic illness treatments' social and economic worth will increase
proportionately. Still, MiracleDrugs Company will have to lower its pricing and
depend on the volume sales of such goods since many nations would be unable to
pay them otherwise.
II.
Are
Healthcare Payers and Policy-Makers Increasingly Influencing or Mandating What
Doctors can Prescribe?
As treatment
regimens increasingly replace individual prescription judgments, Pharma's
target audience becomes more concentrated and potent, affecting its sales and
marketing strategy. As a result, the corporation will have to compete for its
funds more aggressively, partner with healthcare payers and providers, and
enhance patient compliance.
III.
Is
Pay-for-Performance on the Rise?
A rising number of
healthcare payers are assessing the pharmacoeconomic value of various
medications. In addition, the widespread use of electronic medical records will
provide them with the outcomes data they need to establish best medical
practices, terminate products that are more costly or less effective than
similar therapies, and compensate for treatments based on their results (White,
2007). Thus, MiracleDrugs Company will need to demonstrate that its medications
are practical, cost-effective, and superior to other means of intervention.
IV.
Are
the Boundaries Between Various Forms of Healthcare Blurring?
With medical
advancements, the primary care industry is also growing. The self-medication
market increases as more prescription medications are made available over the
counter. As a result, the demands of patients are evolving (White, 2007). Patients
will need more thorough information if treatment shifts away from the doctor
and towards extra care or self-care. In addition, a shift from the hospital to
primary care necessitates new services like home delivery for patients.
V.
Are
Governments Starting to Focus on Prevention Instead of Treatment?
The company can
expand its portfolio due to this shift in focus. First, however, it will need
to rehabilitate its reputation since healthcare professionals and patients will
not trust the company to deliver such services unless they are confident it is
acting in their best interests.
Current
Industry Outlook
The Brand Name Pharmaceutical
Manufacturing business has had multiple new medicine releases throughout the
five years to 2021, with over 50 new active ingredients introduced in 2019.
According to Informa PLC research, the number of new medication releases in
2019 was more than twice that of 2016, with many new drug launches targeting
rare illnesses and cancer (Kennedy, 2021). Due to increased pricing scrutiny,
generic competition, more significant market rivalry among brand-name
producers, and rising research and development (R&D) costs, several
manufacturers have changed their strategic emphasis to more profitable
therapeutic areas, such as rare illnesses and cancer.
Consequently,
several operators redirected their pipelines toward rare illnesses. However, low
prescription numbers might be countered by high per-unit costs and the benefit of
orphan medication exclusivity in the United States and the European Union. In
addition, several branded pharmaceutical companies have extended their product
portfolios to include biologics.
According
to EvaluatePharma, biologic pharmaceuticals' worldwide sales contribution is
expected to increase from 23.0 percent in 2014 to 27.0 percent in 2020
(Kennedy, 2021). However, biologics growth is projected to be dampened by the
expanding market for generic biosimilars, which are biologics that have
previously been authorized by the US Food and Drug Administration (Kelleher et
al., 2020). Despite increased competition from biosimilars, the market is
predicted to rise at a compound annual growth rate of 2.9 percent to $207.0
billion during the five years to 2021 (Kennedy, 2021). This includes a rise in
income of 10.3% and 8.1 percent in 2020 and 2021, respectively, as a direct
outcome of the coronavirus pandemic.
Strategic
relationships with the federal government in vaccine development helped the
business, resulting in revenue growth. Revenue is expected to expand at an
annualized rate of 2.8 percent to $237.3 billion during the next five years
until 2026 (Wilcock, 2020). Numerous industry participants are predicted to
increase biologic medication sales volumes while simultaneously increasing the
pricing of specialty pharmaceuticals. Investments in research and development will
likely increase as many pharmaceutical companies expand their drug pipelines
with specialist medicines and orphan medications, which often have a smaller
disease population and need fewer clinical trials. Profitability is also
predicted to improve over the next five years.
Conclusion
Although the
peripheral vision complexity can defy simple recipes, this research has
revealed that MiracleDrugs and other Big Pharma can strengthen such vision. Like
being cognizant that an unexpected outflow of a tide is a sign of an incoming
tsunami, identifying early warning signs can determine the fate of a company.
If MiracleDrugs portrays an excellent peripheral vision, it can gain an
incredible advantage over its competitors by acting on plausibilities more
efficiently. Of course, it takes the ability to do this perfectly, but as the
environment shifts more rapidly and becomes uncertain, the benefits from
peripheral vision can be more significant than ever before. As Charles Darwin
said, the species that survive are most welcoming to change.
References
Day, G. S., & Schoemaker, P. J.
(2005). Scanning the periphery. Harvard business review, 83(11),
135. https://www.researchgate.net/profile/Paul-Schoemaker-2/publication/31769140_Peripheral_Vision_Detecting_the_Weak_Signals_That_Will_Make_or_Break_Your_Company_GS_Day_PJH_Schoemaker/links/588688a0a6fdcc6b791939e7/Peripheral-Vision-Detecting-the-Weak-Signals-That-Will-Make-or-Break-Your-Company-GS-Day-PJH-Schoemaker.pdf
Godet, M., & Roubelat, F.
(1996). Creating the future: the use and misuse of scenarios. Long
range planning, 29(2), 164-171. https://www.sciencedirect.com/science/article/pii/0024630196000040
Hussain, M., Tapinos, E., &
Knight, L. (2017). Scenario-driven roadmapping for technology foresight. Technological
Forecasting and Social Change, 124, 160-177. https://www.sciencedirect.com/science/article/pii/S0040162517305851
Kelleher, K., Kumar, K., Patel, P.,
& Schrader, U. (2020). Pharma operations: the path to recovery and the next
normal. https://www.mckinsey.com/~/media/McKinsey/Industries/Pharmaceuticals%20and%20Medical%20Products/Our%20Insights/Pharma%20operations%20The%20path%20to%20recovery%20and%20the%20next%20normal/Pharma-operations-The-path-to-recovery-and-the-next-normal-vF.pdf
Kennedy, S. (2021). Brand name
pharmaceutical manufacturing in the US. IBISWorld Industry Report
32541a.
Ramirez, R., & Lang,
T. (2020). The Oxford Scenario Planning Approach in the era of COVID-19.
Saïd Business School. https://www.sbs.ox.ac.uk/oxford-answers/oxford-scenario-planning-approach-era-covid-19
Ramirez, R., Churchhouse, S.,
Hoffman, J., & Palermo, A. (2017). Using scenario planning to reshape
strategy. MIT Sloan Management Review, 58(4), 31. https://search.proquest.com/openview/27d54ad979f5570e5d3d176d45d46ab6/1?pq-origsite=gscholar&cbl=26142
Schwartz, P. (2020). With
vaccines on the horizon, here's how business leaders can plan ahead. World
Economic Forum. https://www.weforum.org/agenda/2020/11/vaccines-on-the-horizon-how-business-leaders-can-plan-ahead/
White, S. (2007). Pharma 2020: the
vision-which path will you take?: pharmaceutical practitioner. SA
Pharmaceutical Journal, 74(8), 40-41. https://journals.co.za/doi/abs/10.10520/EJC81800
Wilcock, M. (2020). Pharmaceutical
marketing—greater than the sum of its parts?. Drug and therapeutics
bulletin, 58(10), 147-149. https://dtb.bmj.com/content/58/10/147.abstract
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