The paper “ Interactive Strategy to Develop Competitive Strategy Options for a Business Unit ” is affecting an example of the assignment on management. Scenario planning is a marketing and strategic tool used by marketers to plan their business strategies. Lynch defined scenario as detailed and plausible ways of how a business environment of a given organization can focus on its future developments by categorizing the crucial environmental influences and factors of change, particularly in situations of high-level uncertainties. A scenario not only involves forecasting but also re-examining the possible future environment factors, structure as well as variable influences.
This implies that scenario planning does not forecast on the unpredictable future environment of a business, but focuses more on the multiple and plausible futures. Based on this definition, it can be noted that scenario planning involves creating possible representations of potential future development for a firm. It is more concerned with making assumptions on the forces driving a market, including different uncertainties. Building scenarios for strategic management involves two main approaches which include developing scenarios from the configuration of factors. This is accomplished through three steps, identifying the high-impact and uncertainty factors within the environment, discovering the various possible futures based on factors, and developing scenarios of the plausible associations of factors.
The second approach of building scenarios is the thematic scenario. When it comes to decision-making, organizations are required to focus on the highest possible options and other factors such as capital investment. Such considerations are important because scenarios may cause different effects on diverse stakeholders of industrials. Since organizations are faced with diversified business environment, such organizations need to be well-prepared to cope with the different environmental changes.
For example, marketers are required to forecast future plausible changes within their business environment. In such cases, marketers adopt scenarios as the most appropriate approach since they can be monitored and evaluated over time regarding the performance of a business unit.
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