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01Taxation

02Technology

03Foresight

FETP · a two-minute exercise

The wind-tunnel exercise

In FETP, each position is tested against several futures. A position that holds in all of them is robust. One that holds in some is contingent. One that holds in a single future is a big bet. Try the sorting on a fictional company.

The company

Northwind Instruments

A fictional maker of industrial sensors, with a head office, two factories and sales companies in several regions.

Four futures

  1. ASteady courseThe business grows much as it does today.
  2. BSoftware leadsMost value moves from devices to software and data services.
  3. CLocal supplyCustomers ask for local production and local teams.
  4. DAutomated decisionsPlanning and pricing are run by systems managed from one central team.

Sort each arrangement

  1. 01Shared services such as finance and HR are charged to group companies at cost plus a small margin.

  2. 02The group lends to its factories on ordinary commercial terms.

  3. 03Sales companies are rewarded as routine distributors.

  4. 04Local teams decide prices and stock levels, and are rewarded for that risk.

  5. 05One purchasing hub buys all components and sells them on to every factory.

  6. 06Device designs are treated as the group's only valuable intangible.

Sort all six to continue.

A learning exercise with a fictional company and simplified futures. Reasonable people may sort these differently. It is not advice and says nothing about any real arrangement.