22. Scenario Analysis
Ascenario 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.
Scenario analysis has been in place for decades and is used extensively in a range of industries and by a variety of different (that is, business, not-for-profit, and third sector) ...