Scenarios helps to understand changes and uncertainties in the operating environment and to prepare for alternative futures. Capful is one of the pioneers of scenario-based strategy making.
In a world shaken by constant change, management must be able to quickly make the right judgement call in a new situation. How deep will be the impact of change on us? Is our business model viable in the new environment? How should we redirect our strategy? Are our investment plans still feasible? Traditional strategic planning offers very few tools to cope with uncertainty, but scenario analysis makes dealing with uncertainty a natural part of strategy development. Uncertainty is no longer seen as a problem, but rather as a source of future business potential.
- Helps companies to be more sensitive to uncertainties in a complex and turbulent business environment.
- Increases strategic flexibility by enhancing ability to react and adapt to changes in the external environment.
- Offers a systematic way of identifying market discontinuities and changes in industry rules, and their effects on the company’s business and strategy.
- Encourages rich and structured strategic conversations about alternative pathways to the future, challenges conventional wisdom, expands the organisation’s strategic horizon, and stimulates decision-makers’ strategic thinking.
- Creates a framework that enables effective monitoring of changes in the operating environment with indicators that best reflect those changes.