Introduction
Scenario planning is a method that is utilized by companies to imagine how companies in possible
future have applied to a wider range of concerns. A limited number of possible states from the avalanche of
data are being simplified through scenario planning, showing how various elements interact at certain
conditions. However, computer simulations, sensitivity analysis, and conting
...[Show More]
Introduction
Scenario planning is a method that is utilized by companies to imagine how companies in possible
future have applied to a wider range of concerns. A limited number of possible states from the avalanche of
data are being simplified through scenario planning, showing how various elements interact at certain
conditions. However, computer simulations, sensitivity analysis, and contingency planning differ from
scenario planning. Sensitivity analysis differs from scenario planning since it keeps all other factors constant
while examining one variable, giving a less dynamic perspective while scenarios do not keep other factors
constant, instead it changes these variables several times. With computer simulations, it generates complex
simulation models, but scenarios are more than that, giving both objective and subjective interpretations.
Besides, contingency planning differs from scenario planning since it examines one uncertainty only hence
giving a linear view, whereas scenarios explore the effect of both uncertainties. In short, scenario planning is
a method that is systematically attempting to interpret all the chances by pinpointing patterns among the
possible results a computer can come up with, giving a 360-degree analysis on the issue. It captures all the
possibilities that would have been ignored in the decision making the process. Also, it lays out the
probabilities making it easy to grasp and is objected to challenge the predominant mindset.
Methodology
There are so many tools that a manager can use to do strategic planning, but scenario planning is the
most outstanding since it can capture all the possibilities in details. From previous studies, no article has
bridged the gap between theory and practice; therefore, this case presents a systematic methodology
explaining the rationale and scenario planning process with illustrations that are drawn from practice.
Therefore, in this case, the method applied was a steady process given and how to utilize the outcomes to
plan for the companys future described. An international Ad company and the Anglo-American corporation
was studied, giving a step by step process of building scenario planning.
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