Application: Market Analysis, Strategic Planning
Scenario planning is an analytical tool which helps firms to think about potential futures in the light of change, complexity, and uncertainty. Less linear than the market audit, it allows marketers to explore likely scenarios which might develop from current market forces. Scenarios can be thought of as stories which help marketers to develop different potential futures based on both knowledge and people’s assumptions about the present. They are not forecasts, but possible outcomes which provide a common perspective and language (Ringland, 2006).
Usually, a team comprising people from across the firm is formed to construct scenarios. In a session led by someone experienced in the process, the participants brainstorm potential futures. Input to their debate includes evidence from futurologists, research studies, customer views, and pertinent data. The team is normally encouraged to think widely before scenarios are grouped and ranked. A firm moving into a new market can create different scenarios of how that market might develop and how competitors might react to their entry. These different scenarios can then be worked into a market entry plan which anticipates risk.
History, Context, Criticism, and Development
With its roots in the military, this approach was first developed successfully as a management ...