Scenario planning is the use of scenarios for future uncertainties to base decisions on. Using scenarios, the organization is prepared to quickly recognize and respond to future environmental changes.
Increasing uncertainty, complexity and instability are forcing companies to structure their way to think about the future. Scenario planning is an appropriate method. The scenario method makes the future visible, manageable and transparent by basing a strategy on a number of future alternatives.
Questions that can be answered with scenario planning:
1. What strategic actions are needed for my organization?:
- There are concrete changes in the market coming, but what is the best way for my organization to respond?
- I know I have a number of future options, but how can I weigh these options?
2. How can my organization position itself the best?:
- The changing market requires a new positioning of our organization, but what positioning offers the best chance of survive under all possible circumstances?
- I want to position my company to respond to future developments, but what future alternatives are possible and what position fits in each of these alternatives best?
Both types of problems require different approaches.