■ Introduction
In Part 1 of this text we have been analysing the situation that any organisa-
tion currently faces and identifying current issues that may have an impact
on the company’s operations. However in order to make plans that are of a
long-term nature an organisation has to develop a view of the future in
which it will have to compete. One of the major mistakes that an organisa-
tion can make is to base decisions on the logic that explained yesterday’s
market. To quote L. P. Hartley (1953) ‘The past is a foreign country: they do
things differently there’. The future is not a replication of the past and an
organisation cannot develop strategy based on a historical perspective. Over
a 5-year period there can be dramatic shifts in a whole range of areas that can
have a major impact on an organisation for example: aspects of consumer
behaviour, distribution channel arrangements or advances in technology. An
organisation that has anticipated these changes can take advantage of any
opportunities they offer and establish a far stronger competitive position as
a result. It is important that organisations are creative in the manner in which
they address these changes. Yesterday’s view of what worked is unlikely to
be appropriate in the changed environment of the future. Drucker (1980)
states ‘The greatest danger in times of turbulence is not the turbulence: it is
to act with yesterday’s logic’. The first step an organisation has to take is to
form a view as to what may occur in the future, the second step is to address
the issues that arise creatively.
The role of forecasting is therefore crucial to developing strategy. New
product development depends on forecasts of technological develop-
ments. Selecting target markets is reliant upon forecasts of their attractive-
ness on a range of factors. Plans have to be developed to address the
future not to suit the past. How then can organisations form this view of
the future?
■ Forecasting
Forecasting the future is a different activity from market research. Market
research can identify the current activities and perceptions of consumers.
So far in Part 1 the strategic analysis has focused on establishing the current situation. Any
strategy has to address the future, and therefore developing a perspective on possible devel-
opment is necessary. This chapter explores a range of forecasting techniques, trend extrapola-
tion, modelling, intuitive forecasting, consensus forecasting and scenario planning. Information
requirements and the make up of teams undertaking forecasting are also covered.