Scenario Analysis


What is Scenario Analysis:


A Scenario is a detailed description of what the future may look like. It is based

on a set of assumptions that are critical to the evolution of an economy, industry, market, or technology. Scenario analysis is a structured way of developing multiple scenarios that help executives address two common decision-making errors—underprediction and overprediction of change.

The objectives of scenario analysis are to build a shared baseline for strategic thinking, enhance flexibility in long-term planning, and to provide strategic early warning.


The purpose of Scenario Analysis:

Scenario Analysis helps answer and address key topics and questions such as:

  • Is the industry an attractive one for us to enter or to remain in?
  • What technology platforms will be dominant in 5-10 years?
  • What will be the biggest changes in laws and regulation impacting our industry in the next decade?
  • Will most sales communication be done primarily by wearable technology or some other means in the next decade?
  • What new applications and uses may be found for our existing current products and services? Our patent resources?
  • How can our company influence the industry forces that are reducing our profits?

What is included in the Scenario Analysis PDF:

  • Background about the origin of Scenario Analysis
  • Strategic rationale and implications of Scenario Analysis
  • Key topics and questions addressed by Scenario Analysis
  • Strengths and advantages of Scenario Analysis
  • Weaknesses and limitations of Scenario Analysis
  • A step by step process for applying the Scenario Technique
  • Scenario Analysis Case Study: Traditional and Emerging Forest Products Enterprises
  • Scenario Worksheet
  • FAROUT© Summary about Scenario Analysis
  • Related Tools and Techniques
  • References


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