Question

How can scenario planning be used in building an organization’s strategy? Are there certain industries that could benefit more from scenario planning than other industries?

Answer 1

Scenario planning can be defined as making some specific assumptions about the future and how it is going to be and the changes to be expected in the business environment over time in light of the predicted future.

In fact, scenario planning is a process of determining a certain combination of uncertainties, various realities about the probable happenings in the future of a certain business.

This sounds quite simple and may be seen as effortless but developing the combination of assumption is by far the best possible way which can be done by a business person to help the organization to guide in long term.

Most of the organizations use the scenario planning in order to evaluate the robustness of their present strategic plans as per the comprehensive range of different scenarios. Stress testing helps the organizations to minimize the probable adverse consequences and to be prepared well to capitalize on the different opportunities.

The organizations which are moving forward use the scenario planning to expand their geographic footprint and look for the probable markets, invest in new technologies or breaking the industry boundaries. With its help, the organizations try to analyses the early warning signals in the external environment. They are well prepared to look for the different threats and opportunities in comparison to the rivals. A good monitoring of environment necessitates the proper monitoring of the environment and an ability to link the important signals to tactical or strategic adjustments of the plan.

There are some specific industries which can utilize this concept more effectively than in other industries. There can be some scenario planning which can give the feel of being outlandish or exceptionally unrealistic. This method is being utilized by Levi-Strauss to overcome the effect of total overall elimination of cotton. Therefore, organizations which are performing in the vitality concentrated commercial ventures such as carriers can be especially gained a lot of advantages by considering the different consequences to their business and the extent of various changes in input factors.