Individual Assignment Presentation

HE Yingying (Helena) Prezi link

Qi Yang (Carol) strategy plan outline

Week 7 Activity-Scenario Planning

Develop ideas of where we chould incorporate the use of scenario planning in our organizations. 


Qi Yang (Carol):

The Focal issue: Managers in IKEA say they fear a looming wood shortage and possible layoffs. It is deeply indebted to wood. Approximately 50% of IKEA's products are made from wood or wood fibers. Wood is a valuable resource, and resource efficiency is of great importance not only from an environmental point of view but also from a cost perspective. IKEA sources globally to ensure the best possible price and the best possible quality of its products, and also put the resources in place to make sure that the wood that they using meets their requirements. But now, one of the big challenges is that the availability of Forest Stewardship Council (FSC) certified wood in many regions is very low. IKEA sources more than 2 million cubic meters of FSC certified wood. But it still can only meet their minimum requirements. It is hard to ensure them meet their sustainability targets. There are two important reasons of the shortage of supply. The first one is that deforestation rates are still alarmingly high across the globe, although the rate has slowed in recent years and illegal logging continues in many tropical forests. Another is the waste of producers during manufacturing. In conclusion, the shortage of supply has a great effect on IKEA’s global market and future growth.

It will become "forest positive" by 2020, meaning that, despite its continuing high demand for timber, it intends its business to have an overall positive effect on the world's forests. Integral to this approach is the commitment that it will be growing at least as many trees as it uses to make products by 2020. Yet making this vision a reality will pose serious challenges. The company is hinging its forests positive strategy almost entirely on its relationship with one global certification scheme, the Forest Stewardship Council (FSC). However it actually failed to meet 2012 targets of 35% of all solid wood to be sourced from "preferred sources". But IKEA believes that by throwing their considerable weight behind the FSC, the company will be able to help the growth of FSC-certified wood supply, promote better forest management and contribute to ending deforestation.

Major Stakeholders effected: Wood supplier, manufacturing department, the Forest Stewardship Council, customers, etc.

Driving forces: environment requirements, industry needs, economic effectiveness, technology development, support from FSC, and societal trends.

 

Strategy: To be concluded, one of the biggest challenges for the 21st Century is how to address resource scarcity and climate change whilst providing a great quality of life for people around the world. People & Planet Positive will help IKEA Group to play a small but significant part in meeting those challenges. In addition to contributing to the quality of life of people and communities where it operates, it will use resources with the utmost efficiency and turn waste into resources. Only renewable energy will be used in IKEA Group operations, while safe chemicals, responsible stewardship of forests, water and farmlands will be the base of its supply chain. More environmental friendly materials will take the place of many conventional ones to face wood shortage. Furthermore, old furniture recovery will run on a long period basis.

Yike Wang ( Daisy):

We all know that the world's financial crisis in 2010 have caused varying degrees of combat and injury of most enterprises over the world. As the financial crisis les consumer income falls, the United States retail industry is also stuck in the doldrums. In October 15th, the United States Department of Commerce announced that in 2010 September, the United States of America retail sales dropped 1.20%. This is the industry's biggest drop of income over the past 3 years. In October, the United States of America California department store chain Mervyn 's announced that they have already closed 149 stores before the end of the year, the company has filed for bankruptcy. At that time, WAL-MART has still maintained a steady growth, 2012 sales revenue growth in September 2.40%. WAL-MART executives have said, the low cost strategy is the magic weapon to tide over the difficulties. "Now people aren't 'want' low-cost goods, but 'urgent' low-priced goods." WAL-MART Craig Americas President Herkert said to the "financial" reporters, "low price policy is very useful in the world, each economy, every year will play an important role, whether in the worst year or in a good one. People tend to save money, especially for daily consumer goods."

Implementing a scenario planning process:

1.     Identify focal issue

The focal issue in my organization is that Wal-Mart wants to survive the crisis and make a increase in its sales.

2.     Search for driving forces

Insist the low-cost products to customers

Have a stable relationship with their suppliers

3.     Find uncertainties

How vast the financial crisis will relate

How would other enterprises reply this financial crisis

How the suppliers were be influenced

The view of customers treat financial crisis

4.     Formulate scenario logic

Because of the financial crisis, customers has low income which means that need to spend less money in their daily spending. The demand decrease may leads some small enterprise folds up.

5.     Strategic analysis

In the financial crisis, economic developed slowly, consumers have less money in their pockets, so they tend to choose cheaper products, which makes WAL-MART products have more advantages; from the supplier's point of view, now all retail enterprise are placed in jeopardy, suppliers prefer to cooperate with and those large-scale enterprises which have stable profit, because in that way will make them feel the safest.

Waiyan Yanny Sit:

Focal Issues

Rogers is in constant expansion. As of 2013, Rogers has over 9 million customers all over Canada. One of the problems facing Rogers over the next few years is their ability to provide service to all their customers. Rogers is facing a major problem. Their network is showing signs of congestion. Since Rogers launched their LTE network in 2011, most of their time has been spent trying to turn on new LTE locations in Canada. They are limiting their resources going towards tower maintenance and upgrades. As such, as more and more people are joining Rogers, some cell sites, including some older LTE locations, are reaching their maximum capacity. Customers are experiencing more and more dropped calls and network slowdowns for their Internet. The advent of popular and data hungry phones such as the iPhone 5 is not helping the cause. One way to solve this problem is to build more towers to accommodate expected growth in the cellular business.

Driving forces

Ensuring service levels stays the same or increases throughout Canada, ensuring the infrastructure is in place and ready for an expansion

Uncertainties

May not get expected customer growth

Although cost of service is getting cheaper, plan prices are also dropping, and on top of building out a new network, balance sheet may not be healthy enough to support upgrading existing infrastructure

Formulate scenario logic

Rogers can go about expanding major cities first (Toronto, Montreal, Vancouver), secondary cities next (such as Ottawa, Calgary, Quebec City) and smaller markets when budget allows (Such as Sherbrooke, Windsor, Kelowna). They can also slow down LTE rollout throughout Canada and concentrate on beefing up their current cell sites first.

Strategic Analysis

Upgrading existing sites will allow Rogers to keep up with the increasing demand of customers on their network. The major urban population of Canada lies in the three main cities (Toronto, Montreal and Vancouver), so upgrades to these areas should be prioritized. As such, Rogers will be able to provide existing customers with the same level of service as when they first signed up, diminishing the probability that they may go elsewhere. This will ensure that Rogers will be able to not only keep their existing customer base, but also allow room for expansion when new customer decide to sign on. 

HE Yingying (Helena)

Introduction to Scenerio Planning (Youtube V)

The focal issue:

The HSBC Group is one of the world's largest banking and financial services organisations. The Group has around 8,000 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.  HSBC provides a comprehensive range of financial services through four customer groups and global businesses: Retail Banking and Wealth Management; Commercial Banking; Corporate, Investment Banking and Markets; and Private Banking. Established in Hong Kong in March 1865 and in Shanghai one month later, The Hongkong and Shanghai Banking Corporation is the founding member of the HSBC Group. It is the Group's flagship in the Asia-Pacific region and the largest bank incorporated in Hong Kong. As I have mentioned in the last session, avoiding financial crime is one of the responsibilities and goals of HSBC. Although the technology has played an essential role in monitoring the strange transactions, HSBC still faces the great risk of neglecting some unconspicuous transactions. As a banking corporation expanding over the globe, HSBC carries so much responsibility. So how does HSBC IT department perform in the future?

Driving forces:

Revenue and compliance

Uncertainty:

How to identity a strange transaction not just based on the monitoring rules?

How to improve the information system in fixing the bugs?

How to train the stuff to raise the awareness of financial crimes?

Scenerio logic:

Because of the great lose of the possible financial crime and responsibility, HSBC have to come up with a specific plan for the future and prepare for the emergency.

Strategy analysis:

HSBC should take strategies in several aspects. First HSBC should keep on developing e-learning courses for the stuff to raise the awareness. Second, HSBC should improve the information system equipped with information technology to do correction. Third, HSBC should hire external party to do audit. Last but not the least, HSBC should set up and improve the professional skills of the compliance department to keep an eye on their services.

Tang Lu (Theresa)

The focal issue:

KFC is the world-famous fast food representative which enjoys a high popularity round the world. An "American icon", it is the world's second largest restaurant chain overall (as measured by sales) after McDonald's, with over 18,000 outlets in 120 countries and territories as of December,2012. The type of the food they are mainly offering are fired chicken, which makes the resource of food supply is very limited. Therefore the suitable Scenerio Planning I make for my organization is relating with the crisis of the food resouce. As we know, some flu that has originally came from poultry and now infect human being and cause the fateful consequence. Actually, the latest virus H7N9 has stricken the east part of China, leading at least 10 death for now, and which I believe can be the best focal issue for the enterprise that its entire food supply depends on chicken.

Driving forces:

customers worry about the bird flu and refuse to take the risk.

Uncertainty:

How to find out the resource of food supply(in different countries and territories ) are safe or not?

How to regain the customers faith for the enterprise?

Once confirmed that our food supply did polluted by the virus ?

Scenerio logic:

No matter is the safety of food supply or the big environment which give the negativeimpact on the food especially poultry-related, KFC should really have to come up with several plans for solving the crisis.

Strategy analysis:

1. For the safety of food supply, KFC should have the main food supply fully and deeply checked which needs them to work out the emergence plan for how to get every supply spot  checked within very short time.

2. Prepare the back-up supply spots in case the current supply spot was effected.

3. Setting up the emergence publicity department for updating news of inside information to the company, comforting and regaining customers' faith towards the enterprise.

Week 6 Activity-Storytelling in organisations

1. Reminder: Upload peer review
2. Identify a story about our organisations that help explain issues that need to be addressed.

Qi Yang (Carol):

One of my co-workers at IKEA told me his story and feeling of discarding used furniture. He said that when he throws away old home furnishings, actually he felt reluctant. Although they are used, or broken, they seem to have other extra values, or not worthy being discarded. He thought that recycling used furniture can not only prevent wood, fabric, etc from going to the landfill where its decomposition produces greenhouse gases and leeches toxic substances into soil and water. It also reuses natural resources, including wood, cotton, and petroleum-based products. Few years before, he tried to break apart an old couch and a bedroom set to salvage the constituent parts. He said, it can be an effective way to reuse various materials, although it is time- and labor-intensive. Thus he agreed and supported that recovery system at IKEA was a sound improvement worth long time developing.

Learn from the story: With the enhancement of environmental awareness in recent years, it also attaches great importance to the waste materials, and discarded furniture. Among home appliances and furniture discharged, 70% can be reused after repair and mending. Waste materials for recycling can save resources which contribute greatly to environmental sustainability. On the other hand, it is also pretty economic, which can help to reduce manufacturing costs.

Of waste furniture recycling industry beginning to take shape, IKEA also established their own old furnishings Recycle Factory, the second-hand furniture and waste wood recycling processed into a variety of available materials, and then supplied to the market again. The new product-recovery concept is implemented in more than 100 IKEA stores in Europe to ensure that returned products are, where possible, repaired instead of being wasted.

Tang Lu  (Theresa):

The story of my organization:

This kind of kind of story can be counted as incident story.

The story happened when I took my part time job as a receptionist in KFC back five years ago. One manager of my branch restaurant made a mistake by taking advantage of the leak of the supervise system of the organization. He literally stole the profit of one deal with the customer on one night around 12am when the restaurant is about to close. There is no other’s presence, so the general manager took nearly one whole day to figure out what had happened when she dealt with the monthly income and expenses. Finally she found out the truth and fired the manger.

What have the organization learned from this lesson:

After what had happened in this specific branch, the general mangers in that district had a meeting afterwards. The aim of the meeting is to work out a solution to perfect the supervise system and indeed made a big change in this area. For that was a very serious, typical and related to every staff in this organization, therefore the change came into effect in a short time and staffs felt it was necessary to accept this change. The specificity of the incident enable the change came very easily without taking too much effort.

Yanny Sit:

There is this story about how Rogers’ marketing team has a funny way of running the business. One example is how the price of phones can sometimes change from day to day. At one point a Samsung Galaxy S3 changed prices every second day. Reps were joking that when they sell phones, they tell customers they cannot even guarantee the price of a phone beyond their conversation. Other changes involve how they adjust the prices based on the competition. Reps are saying that Fido always lowers their prices if others have done so in the first place.  As such, during the Holiday rush period, there was this mini ridiculous price war where cellular phone companies were lowering their prices of their plans by a dollar every week. On top of having the general rush of Holiday shoppers, reps in store were also dealing with customers who thought they got cheated because the price of their plan was now a dollar lower than it was last week. Since the month of March however, prices have stayed stable for both plans and phone prices because of customers calling in.

Lessons learned?

After the ridiculous amounts of calls forwarded to the call centre for a plan change of one dollar, Rogers figured it may be best to simply set a price and stick with it as the costs involved in changing the customers plans are far too great for the little return they bring. Prices are now changed based on set financial quarters and some promotions are rolled out throughout the quarter based on competitive reponse.

Yike Wang ( Daisy):

Wal-Mart’s founder – Mr. Walton was born in Oklahoma in 1918 and in middle school and university period, he have a part-time job in restaurants, shops, to get the money for school. After graduation, from the university, he worked in a chain store for two years, and was be a solider from 1941 to 1945. In 1962, in a small town in Arkansas, Walton opened the first Wal-Mart, setting every day lower price as its starting point. In his expanding, he only choose those downtown just have 5000-20000 people. In those small places, there have no competition, when opened a new Wal-Mart, every one there will know that. It seems that he even don’t need any expense of advertisements. By 1969, Wal-Mart has opened 18 stores and all of them are in the downtown which population is less then 20000. To the 1990s, 1/3 of the supermarkets are in those less competition small towns, at there, Wal-Mart has a quite strong pricing setting power. Since there is no wholesales willing to delivery goods to Arkansas rural, at the beginning of 1964, Wal-Mart had to build their own logistics inventory center. Although this is forced to do, Wal-Mart can avoid the wholesales directly with manufacturers to have a lower price.

What have learned in that story?

From this story, we can find that at the beginning of set up Wal-Mart, the goal of every day lower price has never be changed. Choosing of those less population downtowns makes Wal-Mart has less competition with other big supermarkets. However, in small towns, every new thing will be spread so fast which can cut down the advertisement costs. Because of the small towns, most wholesales would consider the sales would be small and don’t want to delivery goods, that also makes Wal-Mart to have its own wholesales to have a lower purchasing   price then offering a lower price for customers.

HE Yingying (Helena): 

In the Hong Kong HSBC IT department, I heard a piece of news about money laundering. On March 12 this year, a judge of the High court of Hong Kong announced that a house wife who money laundering nearly an amount of over $ 68 billion was sentenced to jail for 10 years. The house wife deposits nearly 40,000 times in the three years between 2002 and 2005. The judge said that although the transaction does not involve cross-border crime, and she is not the mastermind, she has 9 different accounts for money laundering. This case has also become the second largest money laundering case in Hong Kong.

The house wife deposit about 5.18 million yuan daily during the three years. How could she not be suspected for such a long time? Probably the house wife knew the suspicion boundary of per deposit, and she deposit the amount just below the boundary in purpose. And she had 9 different accounts, which are difficult to be tracked.

Lesson learnt:

The bank is also a victim in a case like this. To avoid this kind of case, the bank should more focus on the training of the stuff. The stuff should not only be familiar with the transaction procedure, but also should raise the awareness about the financial crime. The bank can implement relevant e-learning courses to address the issue, including some vivid video clips.