Unexpected events occur in the course of strategy implementation. Organizations use contingency plans to prepare for unfavorable occurrences in the future. However, contingency plans can be used to enhance competitive advantage. Regardless of how prepared an organization is in its strategy, there are unexpected events, natural or manmade, that force organizations to disregard their strategies and apply contingency plans. Dealing with unexpected events should be a part of the strategy-evaluation process. In other words, contingency plans must be a part of it. Some call it “plan B,” but there are a number of scenarios stated below, which are in the form of questions that can be used to prepare contingency plans (Lindström, 2012).
- If, according to some intelligence gathering, one of the firm’s highly-regarded competitors withdraws from the competition, what actions should the company take?
- If targets are not met, what should the firm do to avoid losses?
- If firms cannot meet higher demands for their product, what should they do?
- If natural calamities occur, such as floods or earthquakes, what should the firm do?
- If due to technological breakthroughs, the product becomes obsolete, what should the firm do?
Strategies that were not chosen for implementation can be used as contingency plans.
References
Lindström, J. (2012). A model to explain a business contingency process. Disaster Prevention and Management, 21(2), 269-281. Web.