The Scenario Planning Process

As part of strategic analysis, scenario planning can identify a range of possibilities and outcomes. By identifying trends, organisations can define a series of scenarios that will help reduce errors in decision making.

Identify Future Scenarios

The first step is to agree a time frame, considering various factors:

  • Life cycle
  • Environmental analysis
  • Competitors analysis
  • Technological advancement

Determine what knowledge and data would hold substantial value for an organisation for an extended period. What changes may occur in within a team, organisation, industry, region, country, and even the world?

Identify Trends And Driving Forces

Then identify the trends and driving forces effecting each scenario.

  • Who’s interested in each scenario and decision?
  • Who will be affected by them?
  • Who influences them?

The driving forces are usually suppliers, customers, competitors, employees, shareholders, government and other stakeholders. The following factors for each can then be analysed:

  • Current role as part of the driving force of each scenario
  • Their interest(s)
  • Their position(s)
  • Their progress within the scenario

Create A Template

Apply the Driving forces to each scenario that can be easily identified, driving forces usually originate in these areas:

  • Markets and customer behaviour
  • Technology and innovation
  • Industry competitive structure
  • Society and its structure
  • Organisations resource and capabilities

Identify those forces which are highly predictable and focus on the effects which are less likely to occur.

Develop Scenarios

The most complex task of scenario planning is developing the actual scenario. A condition according to each factor need to be built within the template to create a scenario based on the traits and trends of the market. While building a scenario, the strengths, weaknesses, implications and assumptions need to be clearly identified.

Evaluate Scenarios

Each scenario should achieve a balance between wild speculation and controlled imagination. A sound judgement based on knowledge and experience.

Update Strategies and Policies Accordingly

Evaluate the strategic plan, update and create new scenarios according to new market trends. This evaluation should be done periodically. Market conditions are regularly changing with macro-environmental factors.

Scenario planning gives organisations a more explicit view of the future. As part of the strategic analysis helps organisation plan for what may happen in the future based on the experiences in the past.

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