scenario analysis
Scenario analysis is a strategic planning tool used to evaluate possible future events by considering alternative outcomes. It helps organizations understand how different variables, such as market trends or economic conditions, can impact their operations. By creating various scenarios, businesses can prepare for uncertainties and make informed decisions.
This method involves identifying key factors that could influence outcomes and developing detailed narratives for each scenario. For example, a company might analyze how changes in regulatory policies or shifts in consumer behavior could affect its profitability. This proactive approach enables better risk management and strategic planning.