The use of Scenario planning and how it could've helped Nokia survive the disruptive innovation of Android and iPhone Products
CS 875 Individual Project 6
Steven C. Wong
Colorado Technical University
This document will discuss how scenario planning is useful in predicting disruptive innovations and maintaining a company’s success. The Nokia phone company is an example of a company that failed to adopt scenario planning and failed using traditional strategies in the market place.
This document’s author will discuss how scenario type planning supports planning and innovation for change. Then the author will discuss what forces are involved, and what influences do they make on how a company or organization is run. An appropriate model, diagram or illustration will be applied in this document to show the forces of scenario planning in the smartphone and information technology market. The author’s thoughts will then be summarized about how the author will use scenario planning for future innovation efforts. The author will conclude this document by taking into consideration the concept of if the scenario plan will account for social impact or change.
When writing this document the researcher looked up the rise and fall of Nokia in the smartphone industry as a prime example of how a company did not conduct proper scenario type planning and only relied on standard or traditional forecasting. The disruptive innovations of the year 2007 were Apple’s iOS and iPhone and the Linux Based Android smartphones that came into existence which was a serious threat to Nokia’s future. Nokia failed to predict the existence of a higher functioning more competitive cell phone brand which could easily be avoided using scenario planning. Traditional planning is the style Nokia used to manage its product. Traditional planning is slow to change, and has no time to address a customer’s opinion or concern. Another drawback of using traditional planning which brought about the downfall of the cellular phone company Nokia is that individual subcontractors were manipulating the development process and there was no sense of central authority.
Other issues Nokia faced with this type of strategy that failed are lack of time management, no intuitiveness, no coordination with employees, local optimization, the positive change process is not easy to implement, and there were certain risks and development strategies using standard planning techniques. Scenario planning supports planning and innovation for change because this technique views a variety of different upcoming scenarios and takes into consideration the variety of estimations and events. These scenarios using the scenario planning strategy are not forecasts but different points of view on how the days to come unravel. This technique is very useful because it was originally developed for military planning and is later adopted by companies around the world because it is an advantage to use scenario planning in unpredictable, or fast changing work settings.
Scenario planning permits companies and government agencies to examine plans against the possibility of future status changes, by comprehending the influences of decisions made in a short period of time, and increasing employee conditioning for unpredictable scenarios. “Essentially, scenario planning shifts the focus from trying to predict the future to understanding the dynamics that will shape it” (SAP, 2025). Scenario planning is necessary for success because it assists companies to discover uncertainties by imagining a variety of outcomes and planning a strategy to win on the market after viewing or imagining these scenarios. This type of planning makes it easy to make informed decisions, and maintain long-term sustainability.
Forces involved with scenario planning can be the laws, customers, and changing technology environment. The government is constantly making new laws that regulate our behavior on computers and smartphones which can affect the capabilities of new phones when in the product development stage. Customers may demand companies like Nokia to stay competitive with businesses like Apple because of their loyalty and the fact that they may want a specific feature to help them perform a task while at home or at work. Technological innovations are constantly happening, and artificial intelligence may be an innovation that can revolutionize how we use devices which is a disruptive innovation because it forces companies in the industry to stay competitive.
Figure 1. The Diagram above shows the forces involved with scenario planning and what impacts they have on decision making within a company or organization like Apple or Nokia.
Scenario planning is a useful way of thinking for future innovation initiatives because it assists companies in predicting and getting ready for a range of possible outcomes, besides depending on a single estimation or prediction using standard planning procedures. Scenario planning identifies important uncertainties for a company or organization. This planning type identifies major elements that could influence the company’s innovation initiative but are not easy to guess with predictable settings. Key uncertainties include technological improvement to a product, trends in customer behavior, changes in the economy, or new laws. Using these uncertain possibilities, companies develop a set of scenarios, with a different variety of possible future environments. These scenarios are not forecasts, but a highly possible future that could happen. When investigating implications to new advancements a company leader might ask the following questions when using scenario planning : “What new opportunities might open up in the days to come?”, “What issues or drawbacks can the company get exposed to?”, “How can a company adapt with the existing innovation plans?”
It is important for a company to develop robust strategies that go across a wide array of future outcomes. These strategies might include investing in portfolios of research endeavours that are in correlation to a variety of scenarios. Developing elasticity into the company’s innovation protocol so that the employees can adapt to changing conditions is important. It is also imperative to find the warning signs that can show which scenario is becoming a reality. Continuous monitoring of market trends for adaptation purposes is a scenario planning strategy because it is not a one time application of the concept. A company needs round the clock surveillance of the environment for symptoms of which a new scenario is revealing a new trend and evolving to stay with the innovation plan is necessary according to the results.
Scenario planning should account for the social influence of change. This is necessary for responsible and feasible strategies. When considering social influence, planning can predict disruptive innovations and develop strategies to reduce their negative impact on their business. A social influence evaluation is useful in this situation because it supports equity, and makes sure that the advantages and drawbacks are distributed evenly and that weaker groups of people are not treated unfairly.
References
Bohmann, J., & Stephan, A. (2014). *Income inequality and subjective well-being: The role of relative income concerns*. (No. 794346243). Kiel Working Paper No. 1947. Kiel Institute for the World Economy (IfW). https://www.econstor.eu/bitstream/10419/101414/1/794346243.pdf
Figure 1. (2022, March 18). Scenario planning. MSP Guide. https://mspguide.org/2022/03/18/scenario-planning/
SAP. (n.d.). *What is scenario planning?*. Retrieved from https://www.sap.com/products/financial-management/what-is-scenario-planning.html
WADIC. (n.d.). *Traditional project management: Advantages & disadvantages*. Retrieved from https://wadic.net/traditional-project-management-advantages-disadvantages/