What is Scenario Planning?

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What is Scenario Planning?

The article discusses the question. What is Scenario Planning? We intend to discuss a simple four-step approach to helping you decide what’s going to happen. And what you could do about the situation. 

It’s a fact that current and future competitive challenges will result in multiple outcomes. Your competitive strategies must take them all into account. Using Scenario Planning helps you prepare for numerous situations. This planning takes a broader, more realistic approach to assess your current marketplace. And also considers the tomorrows and prepares you for both. An added benefit of scenario planning is that it’s a subjective technique that allows communication and debate within your organisation.

What is Scenario Planning?

Most if not all, decisions you make will have some element of uncertainty within them. Final decisions come from assessing the choices open to you and the best-case predictions. Scenario planning is a strategic planning tool that helps to make flexible long-term plans and to understand the potential actions of the market and competitors. There is a craze to study the data available to you. But unlike Competitive Intelligence, data tells us about what’s happened and gives no indication at all about the future. So, this is where Scenario planning comes into play.  Scenario planning identifies a specific set of uncertainties and potential different future “realities” of your business. 

The military uses scenario planning to isolate unlikely situations that could happen. And they put it simply in the phrase “planning for the worst”.

How to use scenario planning? 

Scenario planning is designed to isolate and define the critical uncertainties and develop plausible scenarios to analyse the potential impacts on your organisation and what responses will you offer to deal with the situation. Scenario planning is a simple 4-step process, as detailed next.

1. Identify your uncertainties

Answer this question. What will be the big future moves in your market sector, society, technology, economics and politics, and how will it affect you?

2. Identify your critical uncertainties

Write down your uncertainties from step 1. Now you must decide your top two uncertainties which are going to have an impact on your operation. 

3. Develop a range of plausible scenarios

Now draw a simple matrix with your top two uncertainties as two the axis titles. You currently have four boxes on a page like this:

What is scenario planning matrix for Octopus Competitive Intelligence beat competitors, increase sales, solve problems, Competitor Analysis

This space is where you put the likely scenarios. It’s likely you will have many potential scenarios on your list. but to keep things simple and workable, you just pick two scenarios. And of course, you can redo the entire exercise with different scenarios.

4. Discuss the implications

Finally, discuss the impacts and implications of each scenario and decide if you need to change your strategy. And from this, build your objectives. Do you see any new opportunities? How about different competitors to who you have now?


The article discussed the question. What is Scenario Planning? And we offered a simple four-step approach to help you decide what’s going to happen and what you could do about it. 

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