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Scenario development is used in the business world to make strategic decisions and assess potential opportunities and threats by devising a series of possible scenarios for what could happen in the future. It is important for businesses doing scenario development to narrow the scenarios to issues that could possible affect them, thereby streamlining the process. In addition, management should make sure to assess the entire situation leading to the scenario outcome, since it will yield some insight into how the future might unfold. Finally, a company performing scenario development should try to identify its desired outcome, which will help them to make decisions that will lead them to that goal.
Any business that could predict the future would have a significant advantage on its competitors and the rest of the market. Unfortunately, the future is unknowable, so the next best thing that a company can do is attempt to prepare for all possible future outcomes. That is why the strategy of scenario development is popular. It is important for a company going down this path to follow some simple rules to get the maximum impact from the process.
To keep scenario development from becoming too unwieldy, companies should try to focus only on the possible outcomes that would have a significant impact on the future of its business. Since third-party consultants are often used for scenario planning, management should make sure to work closely with these consultants to tailor the process as closely as possible to its operations. In this manner, the results will be relevant and will provide excellent material for the company to analyze.
While it can be tempting to focus solely on the outcomes provided by scenario development, companies who do this might not be taking full advantage of this strategy. By taking a look at all of the myriad variables that can lead to the different outcomes, a company can essentially become acclimated to the unknown. This will take a lot of the surprises out of the potential business future.
The concept of the normative scenario is crucial when undergoing scenario development. A normative scenario is one which represents the best possible outcome for a company out of a set of alternatives. Once this scenario is identified, company management can go about seeing how it can reach that point. It is important that the normative scenario be a realistic goal, one that a company can reasonably reach considering its resources and situation. By identifying a goal and seeing how the scenario is realized, a business possesses a potential blueprint for future success.