Chapter 20

Scenario planning

Scenario planning is a methodology for understanding how long-term changes in the business environment (such as political shifts or new technologies) might affect your firm’s competitive position, so that you can prepare accordingly.

When to use it

  • To help you understand how the business world is changing.
  • To identify specific threats and opportunities.
  • To adjust your strategy so that you are prepared for whatever might happen in the future.


The oil company Royal Dutch Shell was the inventor of scenario planning. The idea originated from the military world. In the aftermath of the Second World War, a group led by Herman Kahn at the Rand Corporation started developing ‘scenarios’ about the possible future ...

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