VISIONING THE FUTURE :

strategic dynamics, scope and intent

Workshop Outline

1.Consider the dynamics of strategy

2.Definitions of scenario planning

3.Evaluate the notion of strategic intent

4.Case study from UK TV Broadcasting

5.Summary

Fréry, F., (2006). The Fundamental Dimensions of Strategy. MIT Sloan Management Review, Fall, Vol. 48, Issue 1, 71-75

Garvin, D.A. and Levesque, L.C., (2006). A Note on Scenario Planning. Harvard Business School Case Study 9-306-003.

Hamel, G. and Prahalad, C.K., (1989). ‘Strategic Intent’ Harvard Business Review. Reprinted Jul-Aug, 2005 in Best of HBR, 148-161.

Walton, J .S., (2008). ‘Scanning Beyond the Horizon: Exploring the Ontological and Epistemological Basis for Scenario Planning’. Advances in Developing Human Resources, 10, (April), 147-165.

Wilkinson, L., (1995). ‘How to Build Scenarios.’ Wired, ‘Scenarios: The Future of the Future’ Special Edition.

Wills, A. and Oliver, J.J., (2010). The future of non-terrestrial broadcasters in the UK television industry: the shape of things to come? European Media Management Association Conference: The Future of TV.

Indicative reading

1. Dynamics of Strategy

Strategy

Perimeter

Value

Imitation

Strategic Stretch

Profitable Growth

Competitive Growth

‘Me-too’ Competitor

Multi-business Organisation

Start-up

Source: Frery (2006)

We consider alternative possible futures as a basis for managing uncertainty and turbulence through

mental preparedness”Eden and Ackermann (1998:360)

‘…provides decision makers with the ability to address uncertainty by representing future states through a limited set of internally consistent scenarios’

Pettigrew, Thomas and Whittingham (2007:38)

‘…usually encourage creative scenarios that identify possible, plausible, and preferable futures resulting in contingency and action plans’

Walton (2008:150)

2. Scenario Planning

Organisations need to create an obsession with winning in tough, fast changing and unpredictable markets.

“strategic intent provides consistency to short term action, while leaving room for

interpretation as new opportunities emerge” Hamel and Prahalad (1989:151)

3. Strategic Intent

Envisions a desired long term market leadership position

Focuses the organisation on winning Establishes a criterion to chart progress Guides resource allocation for the long term Focuses on tomorrows opportunities, not today's problems

Implies a sizeable stretch, current resources do not fit the ambition

Strategy is about creating tomorrows competitive advantages

3. Strategic Intent

“To be a global media powerhouse” Invest in entertainment, news gathering, tv production skills and knowledge Develop content and library A range of satellite and cable channels for global coverage Negotiate attractive media opportunities Invest in revolutionary and imaginative new media opportunities and online business

Strategic Intent : News Corporation

4. UKTV Case StudyFocal IssueHow will non-terrestrial television broadcasters maintain their position as major outlets for television consumption in 2013?

Objectives Identify the driving forces Identify and understand the critical uncertainties

Build four scenarios for the UK television industry

Make strategic recommendations SampleA range of experienced industry practitioners from TV and wider media context

The influence of (de)regulation

Changing audience behaviour and fragmentation

Rate of technological change The changing nature of advertising revenue streams

Data Analysis: Driving Forces

Critical UncertaintiesThe Number of

Television Gatekeepers

“The controllers of distribution are the

gatekeepers (platforms in the broadest sense)…they are the

access or touch points i.e. where the consumers get it.”

Respondent 2, Planning Manager, NTB1

The Degree of Technological Convergence

“TV will become more intelligent. There’ll be personalised EPGs, targeting of ads, things like

functionality from the PC world will arrive – [consumers are] crying out for better search

functionality in TV.”

Respondent 10, Managing Director, Media and Television

Consultancy

Scenario framework

Many gatekeepers + Low convergence

Few gatekeepers

+ Low convergence

Many gatekeepers + High convergence

Few gatekeepers + High convergence

Low

Low

High

High

The nu mber of te levisi on ga tekee pers

The degree of technological convergence

Television Scenarios in 2013

Low

Low

High

High

The num ber of televis ion gat ekeeper s

“1,000 Channels for Under a Pound”A competitive market with many platform brands. NTBs have a strong negotiating

position with platform providers. Owning content is key as all rights are non-

exclusive.

Early Indicators: Launch of Orange TV, Kangaroo and Picnic (BSkyB’s Pay TV service

on Freeview).

“Fewer, Bigger, Better”

Fewer, more dominant channels. Content a key differentiator, and great exclusivity results in a ‘walled garden’ for Pay TV. NTBs have a weak negotiating position. Consumers have a deep relationship with

brand.

Early Indicators: BT Vision and Top Up TV close; Kangaroo denied permission to

launch.

“Demise of the 30 second spot”

BBC’s share of viewing is less than 10%. Consumers confused by excess of viewing devices. Advertisers desert broadcast media because no one is

watching traditional spot advertising.

Early Indicators: Deregulation, cost of new technology falls, live terrestrial broadcasts on web,

increased uptake of web-enabled TV screens.

“£50 per week to watch Corrie”

Competition Commission calls for a radical review as Pay TV overwhelmingly dominates the market. Prices go through the roof –

bring back licence fee!. Piracy is rampant as encrypted delivery systems fail to keep

ahead of ingenious hackers.

Early Indicators: Widespread merger and acquisition activity, companies/platforms

go bust or withdraw from the market.technological convergence The degree

of

Strategic Options for NTBs

Low

Low

High

High

The num ber of televis ion gat ekeeper s

“1,000 Channels for Under a Pound”

“Fewer, Bigger, Better”

“Demise of the 30 second spot”

“£50 per week to watch Corrie”

• Become consumer focussed • Secure new media rights• Strong brand for differentiation• Quality content = event destinations

• Invest in known and trusted channel brands• Invest in distinctive content as an alternative to market leaders• Invest in audience research

• Aim for scale (merger, acquisition)

• Invest in back catalogue rights • Invest in quality content • Build brand relationship

• Invest in non-linear distribution• Invest in low cost content • Secure new media rights• Invest in brand to differentiate

technological convergence The degree of

UKTV Strategic Intent

The UK Television Industry is highly competitive, fast changing and unpredictable. UKTVs strategic intent would concentrate on;

Investing in/own original and exclusive content

Form strategic partnerships to access new content and distribution

Invest in channel brands

“strategic intent provides

consistency to short term action, while leaving room for interpretation as

new opportunities emerge”

Hamel and Prahalad (1989:151)

Investing in Channel Brands

Corporate Strategy considers the long term direction of an organisation

Including the portfolio of the business and new perimeters

Scenario planning is a way to vision different competing futures

Strategic intent focuses on stretching the organisation into a winning position. Providing consistency in strategy whilst allowing for new opportunities to emerge

5. Summary