Bio- and regenera- tive Medicine as an important growth Market

8 HHL RESEARCH REPORT 2012 STRATEgiC And inTERnATiOnAL MAnAgEMEnT 9
Prof. Dr. Torsten Wulf (left) and
Dr. Stephan Stubner of the Chair
of Strategic Management and
Organization
CuRRenT SITuATIon
PoSSIBle PATHS of DeveloPMenT PoSSIBle fuTuReS
todaY Future
In a world that is characterized by increasing complexity,
dynamics and volatility companies can no longer rely
on just one strategic direction that they plan for.
Rather, they have to derive strategic plans for an
‘option space’. The Center for Strategy and Scenario
Planning, co-headed by Prof. Dr. Torsten Wulf and
Prof. Dr. Burkhard Schwenker, has developed an
approach to scenario-based strategic planning that
takes these new challenges into account and improves
strategic decision making in companies.
center For StrategY and Scenario planning
Scenario planning
leads to Higher Quality
of decisions
Only if managers adjust the business
model of their company to changes in
time, will their company remain competitive.
This sounds like an easy, yet effective
recipe. But what is behind it?
Prof. Dr. Wulf: Of course, it seems easy
and logical at first glance . However, not
all companies manage to follow this intuitive
rule in real life . Proven processes
and the executives’ thinking play an important
role here . Research summarizes
this with the term “inertia” . It means
that companies do not adequately adjust
to changes, particularly environmental
changes . This especially applies to businesses
that have been successful for a
long time . Kodak, for example, is on the
verge of insolvency because it missed
the development of digital photography,
although they helped to invent digital
photography .
Prof. Dr. Schwenker: Take Nokia
as another example: a market leader
for years, the mobile phone producer
missed the boat on the development of
smart phones . The same applies to some
extent to Blackberry manufacturer
Research in Motion (RIM), which fell
way behind Apple and its iPhone . On
the other hand, Lufthansa is a positive
example . It reacted well to the pressure
of low-cost airlines, set up EUR 99 offers
itself and successfully established its
own low-cost subsidiary, Germanwings .
It is not just about changes in the
industry and its environment but also
political, socio-political, technological,
ecological and economic ones. What
roles do international markets and
international competition play?
Prof. Dr. Wulf: Large ones, certainly .
The increasing globalization of markets
and competitors raises the complexity
and dynamics of the environmental
changes . In my opinion, this increases
the need to extensively and continuously
deal with the changes in your industry .
Prof. Dr. Schwenker: More and more,
emerging economies are driving the
growth of the global economy, not just
as buyers but also as providers of goods
and services . Companies in the BRIC
countries in particular are therefore
becoming competitors in all world
markets . Companies from industrialized
nations are already feeling the competition
– both in their domestic markets
and in exports; China, for example,
is becoming an ever more powerful
competitor to German and Japanese
mechanical engineering companies in
the world market . The German solar
industry could write a book about it
as well: five years ago, its worldwide
market share was 50 percent; today it
is about 20 percent . Instead, Chinese
producers have conquered the market
and make about half of the turnover
worldwide . The only reaction to this is
continuous development of your own
products and innovations . Generally,
German industry is well prepared in this
respect . International markets also offer
great opportunities for company expansion
. Middle and upper class consumers
in the emerging economies who want
high- quality products are getting more
numerous .
Which companies did you examine
in your study, in collaboration with
Roland Berger Strategy Consultants,
and what are the results?
Prof. Dr. Wulf: Our study summarized
the results of our cooperation with
Lufthansa and Media Markt-Saturn .
These examples clearly show that a
process such as the 360° Stakeholder
Feedback can lead to an improved
perception of the environment . In both
cases we, together with the management,
were able to point out important
developments which are going to play
a vital role in their future strategic
orientation .
What conclusions can be drawn from
this? To what type of company can your
tool be applied?
Prof. Dr. Wulf: From my point of view,
the approach is suitable for any type
of business, large or small . I think the
benefit for major enterprises is greater
due to their more complex structures,
especially against a background of
inertia as described above .
Prof. Dr. Schwenker: Scenario studies
can generally be applied to and used in
all companies, irrespective of the size
or product portfolio . That is because
all companies must plan – whether it is
factory capacities, investment, human
resources, new products, new channels
of distribution, entering new markets,
etc . Scenario planning extends our toolbox
and helps us use classic tools more
sensibly .
This means every company needs an
external consultant who is permanently
scanning external influences and advising
management on the adaptation of
its products/markets.
Prof. Dr. Wulf: Interaction with external
stakeholders leads to managers
cHair oF Strategic ManageMent and organiZation /
center For StrategY and Scenario planning
center SupporterS
Roland Berger Strategy Consultants
cHairHolder
Prof. dr. Torsten Wulf (until 3/2012)
acadeMic directorS oF tHe
center For Scenario planning
Prof. dr. Torsten Wulf
Prof. dr. Burkhard Schwenker
core coMpetencieS/
reSearcH intereSt
• executive leadership and succession
• strategy and governance in family
business
• strategic and scenario planning
contact
www.hhl.de/strategy
www.scenariomanagement.de