Critical Evaluation of Scenario Planning in Strategic Management

This essay critically evaluates scenario planning as a strategic management concept. It begins by defining scenario planning and highlighting its role in helping organizations develop flexible, long-term plans to manage unforeseen risks. The essay emphasizes the importance of scenario planning in strategic decision-making and its interrelation with other strategic management concepts like strategic groups and best-cost provider strategies. The essay then discusses the application and evolution of scenario planning, addressing its advantages and disadvantages, and recent developments. The author concludes that scenario planning has gained prominence in modern strategic management and requires experience and an understanding of market trends to develop effective plans. The essay uses scholarly articles to support its arguments and provides a comprehensive overview of the concept.

Running Head: BUSINESS AND STRATEGIC MANAGEMENT
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Business and Strategic
Management
Student Details:

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The following essay is based on subject strategic management. There are diverse concepts found
under strategic management, which play an eminent role in making decisions and strategies. The
different concepts under strategic management are strategic group and strategic mapping group,
scenario planning and best cost provider strategy. Herein, the concept of scenario planning is
explained with its importance in strategic management. The essay states how the following
concept fits within the strategic management. In order to understand the concept deeply herein
scholarly articles are used. The essay gives a view that how the following concept fits in the
subject of strategic management and gives a sight how developments can be made in the
following concept.
Scenario planning – Scenario planning is a strategic method used by organizations to construct
flexible long-term plans. These plans help an organization to cope up with the unforeseen and
pre measured risks (Ramírez & Selin, 2014). An organization confronts with problematic and
challenging situations daily. Therefore, it becomes essential for every organization to develop a
strong strategy to deal with it. The idea and efforts of planning things to reach the favorable and
profitable situations back is stated as scenario planning. It is considered as an important part of
strategic management as strategic management is concerned with developing the future, with the
help of policies and tactics, the organizations develop both long and short term plans to achieve
company objectives. Thus, the concept of scenario planning makes the path of making decisions
more reliable by understanding the situation more closely and analyzing the conditions. The
concept helps in giving a direction to the whole strategy. Application of the concept strategic
management is impossible without scenario planning. Along with this it must be noted that the
resource capabilities shapes the strategies (Vecchiato, 2015).The concept of scenario planning is
interrelated to all other concepts, which falls under strategic management like strategic groups,
group mapping and best cost provider strategy. Group mapping or strategic groups refer to the
group of industries, which follow similar business models or the combination of strategies
whereas the best cost provider strategy helps the consumer in getting more value for their money
spent. This strategy gives the consumer an idea about investing in the best quality products
(Rickards, et al., 2014). The target is to provide best goods and services at the cheapest rates in
comparison to the rivals. For both these concepts scenario planning is essential as once the
threat/ problem/ issue or concern is predicted it becomes easier to deal with it by finding apt

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solutions (Deal, et al., 2017). For instance, if two firms dealing in same market develop similar
strategies will face tough competition here the scenario planning will help in getting the firms
out of such crucial situation by applying another marketing strategy (Malekpour, et al., 2015).
Strategic management is a continuous process of planning, monitoring analyzing and assessing
the deeds and progress of an organization. The concept of scenario planning becomes essential
when the firm is required to develop a plan, which will help in making decisions for future.
Furthermore, it also safeguards the firms by unforeseen risks (Fortes, et al., 2015).Scenario
planning can serve as a “time reckoning system ( Luiz & Sanchez, 2018).The concept of scenario
planning which gives insight into future, the concept deals with giving insights to the what if
situations which can be witnessed in imaginable ways. According to the author it can be stated
that overall scenario planning is all about strategizing under certainty. It has gained importance
with time to because of the increasing competition and effective strategic requirements of the
companies (Duckett, 2017). Every concept has advantages and disadvantages, similarly the
concept of scenario management also holds disadvantages as if it is not easy to develop a
concept, which will be beneficiary for the firm and also complies with the business ethics. In
order to develop this concept it requires great experience. Otherwise, it may be harmful and may
lead to the deficit conditions. As per the author, some of the things must be take care of as if the
planner must not develop plans which are complex rather he should focus on dealing with the
basic problems initially (Flynn, et al., 2018). It is recommended that while developing the plan,
the planner must look forward to long run market situations disregarding/ keeping aside the
presumptions of successful application of the plan (Schneider & Spieth, 2014).
The concept of scenario planning has recently witnessed various developments which have
reduced the quality of problems faced by the organizations. Earlier while developing the scenario
management plan the companies used to face issues like lack of resources, lack of time and lack
of capital but now with changing time these problems have been resolved (Marquitz, et al.,
2016). This concept has faced lot of criticism in past few years and in order to remove those
criticisms numerous steps have been taken. Another major development found in the concept is
that because of growing industrialization the firms are supposed to work, keeping the idea of
sustainability in mind. The plans under scenario planning are constructed while keeping the
technological advancements requirements in mind (Hill, et al., 2014).

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After the following study, it can be concluded that the concept of Scenario planning has been
popularized in the recent times. The concept earlier focused on providing a basic plan to the
organizations to deal effectively with the conditions but now with time and increasing
competition this concept is also upgraded and extended. The concept of scenario planning is has
gained importance, the organization have developed keen interest in developing an effective
scenario plan to defeat the competitors. As per the study, it becomes clear that it needs proper
experience to develop an effective scenario management plan for an organization. The planner
must be active and updated regarding the market trends and he should develop plans considering
the experience of own firm or other firms in mind. It must be noted that the recent developments
featured in the concept of scenario planning focuses on sustainable use of assets and providing
the best goods to consumers with the help of technological advancements.
WORD COUNT: 1024

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Bibliography
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Duckett, D., 2017. Scenario planning as communicative action: Lessons from participatory
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Change, Volume 114, pp. 138-151.
Flynn, M., Ford, J. D., Pearce, T. & Harper, S. L., 2018. Participatory scenario planning and
climate change impacts, adaptation and vulnerability research in the Arctic.. Environmental
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Fortes, P., Alvarenga, A., Seixas, J. & Rodrigue, 2015. Long-term energy scenarios: Bridging the
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Luiz , M. & Sanchez, A. V., 2018. Strategic Management in Tourism. 3rd ed. Oxfordshire: CAB
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Malekpour, S., Brown, R. R. & de Haan, F. J., 2015. Strategic planning of urban infrastructure
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Marquitz, M., Badding, S. & Chermack, T. J., 2016. The effects of scenario planning on
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Ramírez, R. & Selin, C., 2014. Plausibility and probability in scenario planning. Foresight,,
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Rickards, L., Ison, R. & Fünfgeld, H., 2014. Opening and closing the future: climate change,
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Schneider, S. & Spieth, P., 2014. Business model innovation and strategic flexibility: insights
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