Macro-environment analysis - Scenario analysis
3 important questions on Macro-environment analysis - Scenario analysis
When is scenario analysis used?
Scenario analysis is typically used in conditions of high uncertainty, for example when the environment could go in highly distinct directions.
What is the difference between scenario analysis and alternative future forecasting?
Scenario planners usually avoid presenting alternatives in terms of finely calculated probabilities, as alternative future forecasting sometimes does. Scenarios extend too far into the future for probability calculations.
- Point of scenario's is more te learn than to predict.
What are the 5 basic steps of scenario analysis?
- Defining scenario scope
- Identifying the key drivers for change (eg use PESTEL). Impact, uncertainty and mutual independence. Select key drivers that are on the high scale of all three
- Developing scenario 'stories'
- Identifying impacts
- Monitor progress to see if developments fit scenario expectations
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