To assess forward-looking industry and business changes, here are several complementary frameworks and tools that help anticipate disruption, evolution, or transformation, critical in modern banking and credit analysis.
1. 🧭 PESTEL Analysis
(Political, Economic, Social, Technological, Environmental, Legal)
Assesses external macro forces likely to affect industries in the future.
| Component | Forward-Looking Focus |
|---|---|
| Political | Upcoming elections, trade tensions, industrial policies |
| Economic | Interest rate shifts, inflation trends, consumer confidence |
| Social | Changing demographics, lifestyle shifts, workforce trends |
| Technological | Emerging tech (AI, blockchain, automation), obsolescence |
| Environmental | Climate regulation, carbon taxes, ESG pressures |
| Legal | Regulatory tightening, anti-trust, IP law changes |
💡 Use for: Stress-testing industry exposure to macro changes not yet priced in.
2. 🔮 Scenario Planning (Shell Method)
Explore plausible futures by modeling 2-3 macro uncertainties (e.g. regulatory tightening vs deregulation; high vs low digital adoption). Think of it as structured imagination.
| Scenario | Key Assumptions | Industry Implication |
|---|---|---|
| “Green World” | Carbon pricing enforced | High capex for heavy industries |
| “Digital Leap” | AI adoption > 60% in 3 years | Winners = data-rich firms |
| “Decoupled Trade” | US-China tensions escalate | Supply chain relocation |
💡 Use for: Evaluating downside risk or upside optionality.
3. 🚀 Disruptive Innovation Theory (Clayton Christensen)
Evaluates whether an industry is vulnerable to low-end or new-market disruption.
| Criteria | Signs of Disruption |
|---|---|
| Over-served customers | Paying for performance/features they don’t need |
| New entrants using tech | Serving low-end or ignored segments |
| Margin pressure in core segments | Incumbents unable to respond profitably |
💡 Use for: Spotting weak moats and tech-vulnerable players.
4. 🧬 Business Model Canvas (Osterwalder)
Helps dissect and track how a business creates and captures value, and how easily that model can pivot or defend.
| Component | Watch for |
|---|---|
| Customer Segments | Are they aging, shrinking, migrating digitally? |
| Revenue Streams | Recurring vs transactional; sticky vs commoditized |
| Key Partners | Dependency on fragile alliances? |
💡 Use for: Assessing the adaptability and resilience of the business itself.
5. 🔁 Value Chain Analysis (Porter’s second tool)
Map out where value is created vs eroded in the industry — helps assess which players may win or lose as external conditions shift.
| Stage | Forward-Looking Question |
|---|---|
| Inbound Logistics | Is supplier access secure under future disruption? |
| Operations | Will tech upgrade or ESG compliance drive costs? |
| Marketing | Is the customer acquisition strategy aging? |
💡 Use for: Benchmarking operational resilience or vulnerability.
6. 🔭 S-Curve & Technology Adoption Lifecycle
Assesses where a product or industry sits in the life cycle of innovation — early growth, maturity, or decline.
| Phase | Signals |
|---|---|
| Early | Rapid growth, high R&D, high risk |
| Maturity | Price pressure, commoditization |
| Decline | Market saturation, legacy systems |
💡 Use for: Flagging industries at inflection points (e.g., telco voice, ICE cars, etc.)
7. 🧠 Jobs to Be Done (JTBD)
Understand why customers “hire” a product/service, and whether newer solutions may meet those jobs better or cheaper.
💡 Use for: Predicting switching behavior or startup threats.
🧩 How to Integrate with Banking Analysis
| Framework | Works Well With | Application in Credit |
|---|---|---|
| PESTEL | Risk review & ESG | Identify emerging regulatory/compliance risks |
| Scenario Planning | Credit stress testing | Develop downside & Black Swan readiness |
| Disruption Theory | Competitive Advantage | Detect “fake moats” in legacy industries |
| S-Curve | Portfolio management | Signal early exit before asset quality drops |
| Business Model Canvas | Industry deep dive | Evaluate borrower adaptability |
| Jobs to Be Done | Product-level analysis | Spot revenue disruption risk from new entrants |
