An Aditya Birla Group Commitment 55 05 Future Proofing SCENARIO PLANNING LEADS TO STRATEGIC THINKING FOR OUR RETAIL & APPAREL BUSINESS Like many of our businesses, Retail and Apparel has big ambitions set out in a Long Range Strategic Plan (LRSP). Growth is the aim, and it feels very achievable. But how can it give itself the biggest chance of success given that we know the market and the society within which it sits, is changing? As the sectors grow rapidly and come under pressure from increased consumer scrutiny, energy and resource price rises plus the impacts of climate change, notably water shortages on the wider agricultural sector, what actions might be needed in order to achieve the desired growth over the coming years? How the business manages these changes will define its growth and its sustainability in the decades to come. Together with Forum for the Future, senior managers considered the trends that will shape the business landscape over the course of the LRSP, and planned accordingly. First, we sought to understand the factors that will influence that future operating context. Key areas that were identified included India’s shifting demographics and particularly the growth of the middle class, the impacts of climate change on agriculture, pressure on urban infrastructure and ever more connected consumers. Through understanding these factors in depth - what will impact the business most significantly; what can be predicted; and what are our biggest uncertainties about the future – the business prioritised the factors that could pose the greatest risk or opportunity to the growth in the LRSP. After deep discussion, whether India will be inwardly (nationally) focused or part of a globalised operating framework of cooperating countries, and whether government or business will be leading action on sustainability were chosen as the biggest uncertainties that could have the most significant effect on the LRSP growth. Scenarios that explored what the landscape would look like at the extremes of each of these uncertainties, helped the managers to identify the key risks and opportunities in each future scenario. A strategic roadmap that would ‘future proof’ the LRSP against these risks, and boost it through acting on opportunities was developed. For instance, the impacts of climate change on the cotton supply chain in India are likely to be significant. In a very inward focused economy, where imports are costly, the raw material available to the apparel business would be dramatically reduced. The roadmap therefore includes measures that ensure the business plays a role in supporting the sustainability of Indian cotton production, as well as investing in R&D to find alternative sustainable textiles. As a result of the process, the businesses are looking at the sustainability of their property portfolio, exploring sustainable cotton with renewed vigour by joining the Cotton 2040 initiative together with other brands and NGO partners, investing in renewable energy and exploring 3D printing as a new technology. CASE STUDY