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010516BE_AOX_011v5 * 010516BE_AOX_011v5 * We define four levels of uncertainty: 1) A clear future – the strategist can develop a single, useful prediction of the future. There may still be uncertainty, but the analysis is robust enough to allow for a single strategic direction. For example change has been largely predictable in the fast-food industry over the past 10 years. 2) Alternative futures – the future will consist of one of a few discrete scenarios, but which one cannot be predicted. For example, in late 1995, the basic form of the pending telecom legislation in the U.S. Congress became clear. We couldn’t tell whether it would pass or not – but if it passed, it was clear what the future would hold. 3) A range of futures – there are a few dimensions of uncertainty, but the analysis cannot reduce the future to discrete scenarios. It may lie anywhere along a continuum for each dimension. For example, many new technologies face wide uncertainty over the rate of acceptance in the market. 4) True ambiguity – there are multiple dimensions of continuous uncertainty. For example, a multinational deciding whether to invest in Russia in 1992 faced multiple dimensions of continuous uncertainty. In addition to the usual degree of uncertainty about demand, the company faced uncertainty about the laws that would govern any contract, who could enter a contract, and whether the suppliers and distributors would remain in business. 010516BE_AOX_011v5 * There are four choices for strategic posture: shaping, adapting, reserving the right to play, or exiting: Shapers aim to drive their industry toward a new structure of their own devising. Their strategies are about creating new opportunities in a market – either by shaking up a relatively stable level 1 industry or by trying to determine the direction of the market in industries with higher levels of uncertainty. Wal-Mart, for example, shaped the small-town hypermarket landscape by introducing mega-stores in formerly u
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