Scenario Planning

The basics of scenario planning: Everything you need to know about scenario planning and its importance for strategic planning

Scenario planning is a strategic tool used in various organisations, from businesses to governments. This planning technique uses possible scenarios and options for action to gain strategic insights. But what exactly is scenario planning and how is it used in practice? We explain it in this glossary article.

Definition

Scenario planning is a method for future-oriented planning and decision-making. It involves developing different, plausible scenarios to identify the possible effects of decisions on the future. It takes into account uncertainties and complex interrelationships and enables a systematic view of various development options.

Application

In scenario planning, a set of different future scenarios is developed based on various assumptions, such as environmental, market or technological changes. These scenarios then serve as a basis for strategic planning. By comparing the results from the different scenarios, an organisation can, for example, assess risks, identify opportunities and develop robust strategies that can be successful in different future scenarios.

Advantages

Scenario planning offers several advantages. First, it increases awareness of uncertainties and promotes strategic thinking within the company. Second, it helps identify risks and opportunities and can make a valuable contribution to strengthening a company's resilience and competitiveness. Third, it can promote innovative thinking and open up new perspectives on the future of the company.

Process

Scenario planning is a multi-step process. First, the important influencing factors are identified, then possible future changes to these factors are analysed. Based on this information, plausible scenarios are constructed and linked to possible impacts on the organisation. Once these scenarios have been developed, measures can be planned and implemented.

Example

A company could use scenario planning, for example, to find out how various technology trends could affect its business strategy. Scenarios could be developed based on different technological developments to show how the business model, competitive position or customer demand could change.

Conclusion

In summary, scenario planning is a powerful strategic tool that helps prepare for a variety of possible future scenarios. It enables risks and opportunities to be better identified and responded to flexibly. It helps decision-makers view the future not as something unknown, but as a spectrum of possibilities for which they can prepare.