Linh Duong DMGT 783: Design Futures: Trends, Foresight and Intuition / Summer 2017 Professor Tom Hardy
TABLE OF CONTENTS INTRODUCTION What is Scenario Planning? Brand Description Brand Attributes + Definitions Brand Myth Brand Challenge Question RESEARCH & ANALYSIS 5 YEAR – 10 YEAR – 15 YEAR • Driving forces (STEEP) • Driving forces matrix (2x2) • Driving forces cause & effect • Plot diagram • Visual rhetoric on each plot diagram segment • Scenario logic w/DF axe, scenario title, image (2x2) • Scenario: Story narrative:
o Scenario cover page w/title and image o Story narrative w/visual rhetoric o Implications for brand + responses
SUMMARY BIBLIOGRAPHY
SCENARIO PLANNING Scenario planning is a method of analyzing and visualizing future condi7on and events that may occur. It is used to help predict uncertain situa7ons, what their outcome or effect would be like within an industry and company (“What if…”), which gives the organiza7on an opportunity to be prepared for the future and benefit the most of it.
BOTTEGA VENETA DRIVING FORCES 15 YEAR • SOCIAL Shifting U/S/ Demographics – more ethically diverse Emerging Social Communities – geographically and virtually Individual Empowerment – poverty reduction, growth of the global middle class • TECHNOLOGICAL Technological Change – from biotechnology and nanotechnology to communication and information (“cloud” computing, wi-fi cover…) Universal Access to and Use of Information New Communication Channels –real time access and delivery information Dependence on Computer Systems Public access to “raw” data sources
• ECONOMIC Health Care Advances Transportation Infrastructures • ENVIRONMENTAL Climate change impacts are expected to increase - the severity, frequency, or scale of extreme weather events, droughts, floods, sea-level rise, precipitation patterns, and the spread of lifethreatening diseases. Demand on “clean” products • POLITICAL Terror Threat – Cyber Attacks Government Transparency Continuing Globalization Shift to Emerging Markets – Asia, Latin America, Africa
More SigniďŹ cant
5 YEAR MATRIX
Pressure to Innovative Globalization of Economy Increasing Income Disparity Smart Market Influence of Wearables Globalization Millenials Social Network Influence
Certain Global Climate Change
Waste Management
Air & Water Pollution
Free Trade Restrictions
Rising Asian Rise of China as Market Superpower
Demand on Customization Global Political Instability
National Turbulence in Protectionism European Economy
Uncertain
Inequality of Consumption
Turbulence in Chinese Economy Falling Disposable Income
Social Technological Economic Environmental
Less SigniďŹ cant
Poli7cal
10 YEAR MATRIX
More Significant
15 YEAR MATRIX
Shift to Emerging Markets
Continuing Globalization Terror Threat – Cyber Attacks Emerging Social Communities
Certain
Shifting U.S. Demographics
Emerging Social Communities
Demand on “Clean” Products Global Climate Change
Government Transparency Technological Change – from biotechnology to communication
Dependence on Computer Systems Public access to “raw” data sources
Advanced Transportation Infrastructures New Communication Channels
Uncertain
Individual Empowerment
Social Technological Economic
Health Care Advanced
Environmental Poli7cal
Less Significant
CAUSE EFFECT - DRIVING FORCES. 5 YEAR
CAUSE
Technological Pressure to Innovative To keep pace with change many companies are under pressure to be more innovative to improve the customers experience.
Economic Demand on customization. Make products configured to customers needs and tastes. Eliminate the risk of excess inventory and resulting discount
EFFECT
Economic Retailors invest heavily on innovative technologies but are lack of resource or time and face integration issues. Increase in price for new products.
Social Create deeper connection with customers, high loyalty. Company growth
Political Free Trade Restriction Change in supply chain between Europe and USA.
Economy Free trade restriction would cause issues with delivery products from one country to another. Rise in taxes and
CAUSE EFFECT - DRIVING FORCE. 10 YEAR
CAUSE
Technological Popularity of Ecommerce Ecommerce makes it is easier to reach out new consumers. People can shop 24/7
EFFECT
Economic Change the traditional market. Change in production and the service levels. Reduction in cost, enhanced sales and increased profits
Environmental Lack of Resources Development of new materials, substitution of
Environmental Reduction of waste. The amount and toxicity of waste.
Political National Protectionism Restrain trade between countries trough tariffs on imported goods and other restrictions
Economic No competitors. Weaken the industry. Slow economic growth
CAUSE EFFECT - DRIVING FORCES 15 YEAR
CAUSE
EFFECT
Economic Advanced transportation infrastructures. Change the traditional market. Change in production and the service levels.
Economic Reduction in cost, enhanced sales and increased profits.
Political Shift to emerging markets – South Africa, Latin America, AsiaPacific. Migrating into middle class
Economic Company disperses across the emerging world.
Political Continuing globalization growth of world trade. Single market
Social Conflict of ideologies as different Economic- Growth in global apparel business.
Technological New communicating channels give retailers the opportunity to communicate and interact with their customers via Internet
Social Change the way people communicate. Become more isolated.
PLOT 5 YEAR
Increase productivity, Higher living standards, lower pricing of goods and services. Increase in GDP. TURNING POINT
The rise of machines. Companies use more robots in factories and warehouses, drones for delivering. RISING ACTION SETUP To keep pace with changes many companies are under pressure to be more innovative to improve the customers experience. Seek for new materials, technologies and method of production and delivery time.
People are replaced. Robots and automation take away entire categories of jobs. Increase unemployment FALLING ACTION RESOLUTION People will be trained to upgrade their skills to perform more difficult works that robots can’t do.
SETUP To keep pace with changes many companies are under pressure to be more innovative to improve the customers experience. Seek for new materials, technologies and method of production and delivery time.
RISING ACTION The rise of machines. Companies use more robots in factories, retail and warehouses, drones deliver.
TURNING POINT Increase productivity, Higher living standards, lower pricing of goods and services. Increase in GDP.
FALLING ACTION People are replaced. Robots and automation take away entire categories of jobs. Increase unemployment
RESOLUTION People will be trained to upgrade their skills to perform more difficult works that robots can’t do.
PLOT 10 YEAR
Products made from synthetic leather are more affordable and take less time to produce. TURNING POINT
RISING ACTION
Vegan/ Faux leather made from polyvinyl chloride (PVC) and polyurethane are toxic and have impact on environment. Synthetic leather doesn’t last long, doesn’t break down and is hard to recycle. FALLING ACTION
SETUP
RESOLUTION
Companies works on developing animal friendly materials that could substitute real leather.
Fashion brands are more conscious about ethical problem of getting raw materials from suppliers and production issues (workers conditions, many leather workers are children).
Waste management- reuse scraps. Reduce the demand for virgin leather production and the need for chemical tanning process.
SETUP Fashion brands are more conscious about environmental problems (pollution, water from tanning leather) and issues of getting raw materials from suppliers.
RISING ACTION Companies works on developing animal friendly materials that could substitute real leather.
TURNING POINT Products made from synthetic leather are more affordable and take less time to produce.
FALLING ACTION Vegan/ Faux leather made from polyvinyl chloride (PVC) and polyurethane are toxic and still impact environment. Synthetic leather doesn’t last long, doesn’t break down and is hard to recycle.
Leather Scrap Oxford Shoes
RESOLUTION Waste management- reuse scraps. Reduce the demand for virgin leather production and the need for chemical tanning process.
PLOT 15 YEAR
Bring low priced goods. Company disperses across the world. Increase free trade and decrease of taxes on the imported products. People are willing to move between different countries in search of work.
TURNING POINT
People from poor countries will move to more developed countries. Also, with development of new technologies China will be able to imitate high quality products, produce more counterfeit products and spread it around the world.
RISING ACTION
FALLING ACTION
SETUP
RESOLUTION
Shifting to emerging markets (South Africa, Asia-Pacific, India) and Continuing globalization, the world becomes a single market.
Strict trade agreements, improve trade balance. Increase salary, develop
SETUP Shifting to emerging markets (South Africa, Latin America, Asia-Pacific) and Continuing globalization, the world becomes a single market.
RISING ACTION Company disperses across the world. Increase free trade and decrease of taxes on the imported products. People are willing to move between different countries in search of work.
TURNING POINT Globalization brings more diverse and low priced goods.
FALLING ACTION People from poor countries will move to more developed countries. Also, with development of new technologies China will be able to imitate high quality products, produce more counterfeit products and spread it around the world.
RESOLUTION Strict trade agreements, improve trade balance. Increase salary, develop
FUTURISTIC
TECHNOLOGICAL
SCENARIO LOGIC. 5YEARS
INDUSTRIAL
ECONOMIC
RURAL
ELAPSED
FUTURISTIC
TECHNOLOGICAL
SCENARIO LOGIC. 10YEARS
INDUSTRIAL
ENVIRONMENTAL
ECOLOGICAL
ELAPSED
RISE
POLITICAL
SCENARIO LOGIC. 15YEARS
RISE COLLAPSE
ECONOMIC
COLLAPSE
5 YEAR – A JOURNEY TO THE CENTER OF THE EARTH THE SITUATION HEATS UP
1/ Technological development influences many different areas of life including business, economy, environment. Fashion companies adopt new resources in production, retail, ecommerce, delivery and customer service. Some brands that stem their concept from their long history and cultural heritage, such as Bottega Veneta, are also forced to be more progressive. Moreover, intelligent machines become more sophisticated and specialized than their first generation and will soon overhaul our economy. Google starts building worker robots with personalities.
5 YEAR – A JOURNEY TO THE CENTER OF THE EARTH HEADING OUT
2/ Smart software and robots put humans out of work. People that were doing labor work are not ready for the shift, they are not trained and don’t have skills to perform other types of work or too old to. Many families are left struggled and homeless. The rise of crimes, protections and civil war. Dwellers from big cities with a high cost of living, such as San Francisco, Los Angeles, New York, Chicago…migrate to less expensive areas that are not affected by progress.
5 YEAR – A JOURNEY TO THE CENTER OF THE EARTH MOVING IN
3/ Unhappy former workers use social media to complain about the brand’s politics. People boycott Bottega Veneta for its lack of social responsibility. Also, the brand is accused to be social insensitive, which make Bottega Veneta less appealing to consumers and sales drop dramatically.
5 YEAR – A JOURNEY TO THE CENTER OF THE EARTH EXPANDING VIEW
4/CEO and management team seek for resolution, draw new campaigns and build new business strategy to deal with social issues that affect the brand’s growth.
5 YEAR – A JOURNEY TO THE CENTER OF THE EARTH RISING TO THE OCASSION
5/ Bottega Veneta starts expanding and opening new stores in smaller cities that begin developing but are less affected by. The brand provides resources and training opportunities to further optimize professional growth of their employees. The brand becomes more recognizable for its business values and social responsibility efforts.
10 YEAR –
THE SITUATION HEATS UP
1/ Agriculture and transportation are commonly viewed as the top fields that cause climate change. However, environmental contamination related to the production of fashion apparel and leather good also has an enormous impact on climate change related challenges. The garment production is the second biggest polluter, including cotton farming, fibers manufacturing, dyeing, printing, and bleaching. Water overuse from cotton production, energy and chemical discharge from dyeing etc. (according to EPA, 13,1 million tons of textiles are trashed each year in the U.S.). In addition, to the inherent waste that fashion’s linear economy creates, many countries where fashion produced are at risk of environmental disruption. The biggest fashion’s manufacturing hubs are affected by rising seas levels. Extreme weather conditions become more common and impact the lives and mobility of workers. Moreover, increasing oil price due to more difficult access and rise of the cost of oil extraction affects the transportation.
10 YEAR – SOLARIS HEADING OUT
2/People are forced to find new habitat, which leads to supply chain inefficiency and decreasing output. Rising costs in materials, labor, and transportation coupled with shifting consumer sentiment create a pressing argument for change.
10 YEAR – SOLARIS MOVING IN
3/ The increasing scarcity of resources like water and oil forces the industry establishes sustainability standards, which are affirmed by international regulatory bodies.
10 YEAR – SOLARIS EXPANDING VIEWS
4/ The use of water and raw materials is more regulated, a business model that operates on the single use of raw materials and based on “take, make and waste” principle is no more untenable. Fashion companies collaborate to build a single sufficient recycling mechanism. The brands use new methods of production and dying leather. New technologies allow to filter water after production and dying process and reuse it multiple times. Moreover, ecofriendly, electric transportations are used in logistic and delivering products.
10 YEAR – SOLARIS RISING TO THE OCASSION
5/ Consumers consistently identify sustainability as a factor that influences their purchasing habits and willing to pay more a sustainable product. Following the trend and consumers demand Bottega Veneta becomes more concerned about an impact of fashion production to the environment. Customers are drawn to Bottega Veneta for its new philosophy towards sustainability. The brand aims to use only recycled or other sustainably sourced materials in production.
15 YEAR – WAR & PEACE THE SITUATION HEATS UP
1/ Companies used to serving the middleincome market of the old Western word decide how to supply the new booming market of Africa, Asia and Latin America. People become more educated and urbanized in these part of the world. Therefore, they focus on career, urban transportation and infrastructure. Women are now in high positions in government and business. They are more independent and can afford to buy high-end products.
15 YEAR – WAR & PEACE HEADING OUT
2/There is no more big gap between social classes. By 2032, many people escaped poverty that the balance of geopolitical power had changed completely, and global trade patterns will also be unrecognizable. Sheer size of Latin America population and expanding middle class (especially Mexico, Chile, Peru, and Colombia; Brazil and Argentina are fully recovered after recession; Venezuela is slowly recovering after crisis) fashion market in Latin America has a strong purchasing power and is bigger than the Middle East and worth more than $220Billion and keep rising.
15 YEAR – WAR & PEACE MOVING IN
4/ Strong underlying economic activity and cooling inflation are set to boost disposable income and spending in the region. New middle-class is becoming a consumer class and boosting the economy. Spread of the middle class across the world is primary forces sustaining the global economy.
15 YEAR – WAR & PEACE EXPANDING VIEWS
3/ Latin America, Asia and Africa government start working on retail expansion and infrastructure upgrade. Thus, allowing Bottega Veneta to be less cautious and conservative for the markets with a significant demand. The company focus on expanding its business in these countries that becoming a primary markets.
5/Bottega Veneta with its classic traditional design doesn't attract the younger generation. To boost its sales and tap into new audience the brand launches the collaboration with local designers to create capsule collections with distinguishing design.
IMPLICATIONS 5 YEARS 1/ Demand on progressive production
Response: The brand team up with tech companies to research and find resolutions to be more effective in production.
2/ Shift in labor and rise of unemployment
Response: Managers create new training programs to improve their employees skills to make them be able to perform more difficult works.
3/ People migration into more affordable cities
Response: Launch new stores in developing cities with high demand on quality goods.
IMPLICATIONS 10 YEARS 1/ Increase of environmental issues
Response: Search for eco friendly way of production and smart waste management. 2/ Lack of regulation Response: Government develop more restriction for fashion industry, including labor regulation, tax regulation, restriction of using certain materials and sustainability will be mandatory for all companies. 3/ Lack of raw materials Response: Development of alternative materials that will be cheaper and faster to produce. Moreover, they have to be easy to break down and recycle. 4/ Change in supply chain Response: Look for more efficient supply chain and sourcing to find less expensive logistic service. 5/ Change values in fashion industry Response: Affected by social changes, people focuses on gaining new experience more than possessing material goods. Fashion brands create new ways for customers to experience their products through innovative technologies.
IMPLICATIONS 15 YEARS 1/ Continuing globalization Response: Company employ diverse people. To successfully enter the global arena managers make create the right communication technology and strategy. Additionally it helps to reduce labor and production costs. 2/ Increase of middle class Response: To tap this category of consumers, the brands create new categories of products. 3/ Focus on emerging market Response: Marketers look for new markets to expand the company and open more stores. 4/ Change in consumers demands Response: Consumers become more sophisticated, they no longer interested in fast fashion. Brands have to be more creative, find new approach in design.
DMGT 783 & SCENARIO PLANNING
Scenario planning and Design futures are an exciting course that help to develop alternative view of the future and help to build a solid business strategy. In this class I have learnt how to do a research of different fields that can impact a company and use them to plan the future through critical thinking. Many companies fail because they are too focused on internal There are many driving forces that are not related to your industry, however, they can trigger changes that will affect the business. The managers have to carefully examine external driving forces, such as economy, technology, politic, society, environment etc., that shape the future of the company in order to create a successful business plan. In addition, scenario planning challenged me to use imagination, think about futures that don’t exist yet and consider a wide range of possibilities that would affect in organizational decision making.
BIBLIOGRAPHY hWps://www.businessoashion.com/ar7cles/global-currents/la7n-americas-160-billion-fashion-opportunity hWp://trend.pewtrusts.org/en/archive/trend-summer-2016/how-a-growing-middle-class-could-save-theworlds-economy hWps://www2.deloiWe.com/us/en/pages/deloiWe-growth-enterprise-services/ar7cles/private-companyglobaliza7on.html Freija Van Duijine. Five key advantage of scenario planning. Retrieved from hWp://futuristablog.com/ďŹ veadvantages-scenario-planning
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