Scenario Planning or Contingency Planning

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Definition: Scenario Planning or Contingency Planning

It has its roots in military strategy studies and was started by Herman Kahn.

Definition: - Scenario planning is a structured way for organisations to think about the future. A group of executives sets out to develop a small number of stories about the future might and how it might turn out to be along with the consequences. It gives you all the ideas which might be possible in the future.

Benefits of scenario planning: -

  • Gives a broader view of the future, and helps in exposing the blind spots that might otherwise be overlooked in the traditional forecast method
  • Managers are able to understand the source of disagreement that generally occurs when analysing different scenarios.

Example: -

Should a supermarket put millions into more out-of-town megastores and the parking space, or should it invest in secure websites and vehicles to make door-to-door deliveries?

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