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Second International Seville Seminar on Future-Oriented Technology
Analysis (FTA): Impacts on policy and decision making
28th- 29th September 2006
Second International Seville Seminar on Future-Oriented Technology
Analysis (FTA): Impacts on policy and decision making
28th- 29th September 2006
Claudio Roveda and Riccardo Vecchiato
Politecnico di Milano and Fondazione Rosselli
Foresight in Corporate Organizations
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Agenda
• to set up a general framework of industry foresight in relation to the business environment of the firm;• to describe some foresight models (domains, methodology, organizational process, outputs and outcomes in supporting the design of a coordinated multilevel and multiunit strategy) implemented in a sample of large international companies;• to draw some general features of the industry foresight models from these cases and providing some guidelines regarding the implementation of industry foresight.
Paper structure
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Defining the business environment
The micro-environment
Competitors
Customer groups
SuppliersComple-mentary products
Industry customers’
needs
Industry technology
Industry regulation
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Defining the business environment
The macro-environment
Business macroenvironemnt Politics Economics Society Ecology Technology Ecology Society Technology
Business microenvironment Industry Industry Customers’ needs Technology Industry Regulation Industry Regulation
Current competitors
Customers
Suppliers Complementary products
Industry
Newcomers Substitute products
Foresight in Corporate OrganizationsForesight in Corporate Organizations
• Focus the analysis on the general functions performed by the industry products in relation to its customers’ needs and wants. The cases of:
– Daimler Chrysler: mobility industry; – Nokia: the information and communication industry; – Shell: the energy industry.
• Refer to consumer needs as the cornerstone of the analysis of the business environment of a firm, with the main aim of figuring out how they can evolve, how they can be widened and enriched.
Consumers’ needs as the cornerstone of the analysis
Defining the business environment
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Some models of industry foresight
General classification of foresight activities
Macrolevel
Mesolevel
Microlevel
Politics
Economics
Ecology
Society
Technology
Long term
Medium term
Level of analyisis
Domain
Time horizon
Source: F. Ruff, DaimlerChrysler
Short term
Foresight in Corporate OrganizationsForesight in Corporate Organizations
The Shell Model
Some models of industry foresight
Source: P. Cornelius, Shell
Foresight in Corporate OrganizationsForesight in Corporate Organizations
The BASF Model
Some models of industry foresight
Source: K. Heinzelbecker, BASF
Foresight in Corporate OrganizationsForesight in Corporate Organizations
• foresight fosters the integration and coordination among the various organizational units;
• foresight promotes a shared understanding of the basic drivers of change affecting the whole business;
• foresight is appropriate when the identification of emerging trends able to affect the sources of competition of strategic business units is relatively easy: the critical problem is the assessment of the uncertainty affecting the alternative paths of evolution of these trends and their future likely outcomes.
Some models of industry foresight
The Shell and BASF Models: the major features
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Some models of industry foresight
The Nokia Model
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Some models of industry foresight
The Nokia Model: the major features
• scenarios may be inappropriate when it is necessary and prior to be flexible and react quickly to weak market signals;• in fast changing markets, as the technology and social driven ones, What it does matter are the results of the trend investigation at a macro level of the business environment;• the Nokia World Map provides every business units within the firm the information basis on which the implications of emerging trends for the business areas and investment projects can be assessed with more details.
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Some models of industry foresight
Foresight at Philips and Siemens
• Also at Philips foresight activities aim at identifying disruptive trends by means of an interactive process. Insights about socio-cultural, technological, market and business related trends are integrated and made coherent. • Also at Siemens foresight is conceived as a trend scanning process, with the aim of figuring out the most relevant ones for the company business units. For each business unit, a huge number of potentially relevant trends from the PEEST landscapes are selected and prioritized on the basis of their capability of affecting the target industry.
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Concluding remarks
Some general considerations can be drawn from the case studies of industry foresight, with regards to:
• methodology;• organizational process;• output and impact on strategy and operations.
Foresight in Corporate OrganizationsForesight in Corporate Organizations
Concluding remarks
Organizational process
Bottom-up Top-down
Methodology
Scenario
Focused business/technology firms (political/economical drivers of change)
Trend analysis
Conglomerate firms/ firms with a wide range of (unrelated) business areas
Focused business/technology firms (social/technological drivers of change)
Correlations between methodology and process