Strategy Under Uncertainty
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Latest revision as of 13:07, 15 April 2011
Four Levels of Uncertainty Clear enough future //One straight line// A single forecast is enough to determine strategy e.g. Stragey against a low cost entrant
Alternate futures //lines of probability// A few discrete outcomes Game Theory Real Options eg capacity strategies for chemical companies
A range of futures //X and Y graph// A arnge of possible outcomes Scenario Planning, Technology forecasting e.g. enetring emerging markets
True ambiguity //Lines in all directions// No basis for a forecast Pattern Recognition. Russia after the collapse of communism
!!Postures and Moves
- Shapoe the future
- Adapt the future
- "reserve the right to play"
!!Portfolio of actions
- No regrets move - positive payoff in any scenario
- Options - Significant payoff is some outcomes, small losses if negative
- Big bets - focused strategies with huge potential payoffs
!!Steps
- Identify the nature of residual uncertainty
- Chose a strategic posture
- Build a portfolio of actions
- Actively manage strategy
