Question

list and explain different activities in scenario planning

Answer 1

Scenario planning in essence is a process used by organizations to create a variety of plausible futures and analyze how they would fare under each of them. It is mostly used to identify a possible risk that may arise because of certain decisions that are being taken. This is one of the strategic planning methods that has been used by organizations to make long term plans for organizations. Like every strategic planning tool, this process also has activities involved.

- Issues in focus/Deciding on variables: In this step organizations decide scenarios or variables that would need to be focused on. Environmental analysis organizations determine which are the most important factors that would have an impact on the future of an organization's environment. Once decided then scenarios are created and noted down for further analysis.

- Key factors/External factors: Once we have variables available, the team will brainstorm a long list of factors that could affect the focal issue. Once we have the factors, we need to look at external factors that can have an impact like geopolitical, economic, social, and technological forces that are often left out of the usual business plan.

- Critical uncertainties: Now that we have the factors figured out, the next step is to look at the uncertainties linked around those scenarios in focus. In this step, the organization has to look at factors that are critical and would have to be prioritized.

- Narrowing down of scenarios: In this step, we decide which future would need to be developed for further analysis. We may have many possible scenarios however we need to narrow them down to probably 7-9 scenarios that would lead to strategic insight.

- Scenarios finalization: This is the step where the scenarios that are narrowed down in the previous step would be brainstormed on. The team works on different alternatives and comes down to 2 to 3 scenarios that would be worked on.

- Writing of scenarios: The next step then is to write those scenarios. Once they are 'written up' in the most suitable form, they are used to forecasting processes that have a fixed format. The basic rule is that scenarios produced should be in the form most suitable for use by the managers who are going to base their strategy on them.

- Identify the issues arising from scenarios: The final step is to examine these scenarios to come up with critical outcomes which are known as the 'branching points' relating to the 'issues' which will have the greatest impact on the future of organization.