As you can see on the chart above, energy prices have fallen drastically in 2014 — over 35% from peak values in the summer for both WTI and Brent — reflecting predictions in Frontier Strategy Group’s (FSG) 2014 Events to Watch report.
In the report, we highlighted “Energy Price Correction” as one of the highest priority events to watch in emerging markets. As a result, FSG clients who created contingency plans ahead of time were able to prepare their local teams for pricing flexibility and other energy price related initiatives that led them to outperform their emerging market peers.
The payoff for preparedness cannot be overstated.
At FSG, multinational companies are increasingly asking us not only to help them institutionalize contingency and scenario planning into their businesses planning cycles, but also to identify where disruptive events could lead to performance volatility. Before the December 2013 release of last year’s report, I spoke with many executives on the topic of energy price correction and found that the majority of companies did not have a plan in place to account for the massive business impact lower energy prices could have across their portfolio.
For this exact reason, FSG recently released our 2015 Events to Watch report for FSG clients.* In the new version of this report we analyze the top ten trends that could impact emerging market performance in 2015. We break down each event into the upside, downside, and base-case scenarios using our proprietary contingency planning methodology, complete with signposts and indicators to track the evolution of each event and help executives become better prepared.
Forecasting the future is always a difficult endeavor. For emerging market executives that aim to be confident in their abilities to meet performance goals, this task becomes even trickier. However, executives who fail to look forward will almost certainly be outpaced in an increasingly competitive and globalized world.
Check back next week to learn more about the top ten 2015 Events to Watch in emerging markets.
*On January 5, 2015 a public version of the 2015 Events to Watch report will be available for download on FrontierStrategyGroup.com.