Chapter 1: Dynamics in the business world

The business environment is subject to what?

subject to constant change

What does strategy development have to do in order to survive the constant changes?

strategy development must

• anticipate

• understand

• design the future path

Please line out some examples from the past in regards of technology and economy

• Technology: first CD player in October 1992 → launched by Sony

• Economy: Bitcoin concept was proposed in 2008 → first exchange rate being $0.07

Please line out some examples from the present in regards of technology and economy

• Technology: Audio Streaming Services & it’s Digital Business Models → Spotify, Apple Music

• Economy: Bitcoin‘s all-time high at $108,786€

What are relevant questions for the technology in the future?

• How will technologies further change and disrupt?

• What will the awareness for environmental issues drive us to?

• What are the consequences of further digitization?

• How will this affect leadership, strategies, companies and business models?

Choose 1 company that went bankrupt and explain the reasons that have led to that bankruptcy?

AirBerlin

• competition from Lufthansa & low budget airlines (eg. Ryanair) → failed trying to sit on two seats & didn‘t have an actual defined clientele

• frequent changes in leadership (7 in 10 years) → inconsistent strategies → inefficient cost management/unstable dynamics

• Etihad Airways as the biggest financial aid stopped supporting in August 2017 → dependence on Etihad with around 27%

What does VUCA represent?

Acronym that describes the market dynamics and its strategic impact

What does VUCA do?

it sets the framework for management and leadership in the economy of the future

What do the sole letters in the word VUCA stand for?

• Volatility

• Uncertainty

• Complexity

• Ambiguity

What is the key idea of Volatility?

fast changes driven by external forces

What causes volatility?

• tech changes, new regulations, trends

• new competitors & substitutes

• shorter product life cycles

What is the effect of volatility?

organizations can’t respond fast enough

What is the key idea of uncertainty?

it’s hard to know what’s coming next

What causes uncertainty?

• uncertainty about business models, technooogy & customer needs

• past experiences doesn’t help predict the future anymore

What is the effect of uncertainty?

planning and forecasting become less reliable

What is the key idea of complexity?

too many moving parts at once

What causes complexity?

• multiple changes happen on different levels

• cause and effect aren’t clear

What is the effect of complexity ?

• hard to act quickly

• too many options + decision paralysis

What is the key idea behind ambiguity?

even with information, meaning is unclear

What causes ambiguity?

• too much information, too many sources

• hard to tell what’s real, relevant or right

What are effects of ambiguity?

focus shifts from “what’s happening” → why & how

In an uncertain world there is an urgent need for?

for a future paradigm of leadership

What are the methods to counter the VUCA problems?

• Vision

• Understanding

• Clarity

• Agility

How can you counter Volatility?

Vision:

with a clear vision to think ahead to the future and enable navigation in turbulent times

How can you counter Uncertainty?

Understanding:

creating structure & orientation - by making the big picture of the business environment understandable

How can you counter Complexity?

Clarity:

ability to think in networks and systemic cause-and-effect patterns

How can you counter Ambiguity?

Agility:

remaining flexible and able to act in the face of future changes

What impact can the VUCA-world have in general on your business idea? What are negative impacts and potential countermeasures?

Volatility:

• fast changing trends

• unpredictable trends

• shift in popularity

→ countermeasures: diverse pet types → eg. rotating rescue pets for adoption to stay relevant

Uncertainty:

• health & safety regulations → unpredictable outbreaks like COVID can lead to restrictions

→ countermeasures: implement strict hygiene measures

Complexity:

• ensuring animals wellbeing and engage customers at the same time is challenging

→ countermeasures: separate rooms for animals with livestream that customer can watch; work with welfare organizations to ensure well being; being transparent

Ambiguity:

• hype around pet cafes can wear of

→ countermeasures: plan events → eg. pet yoga