Exercises: Scenarios: exploring ideas and new business models

Explain what a scenario is in business planning and what the purpose is of exploring several scenarios instead of working with a single 'official' plan.

Distinguish between a probable scenario (what seems likely to happen), possible (what could happen), and preferable (what we would like to happen), giving an example of each for the rural tourism sector.

The figure shows the futures cone: from the present, a range of possible scenarios opens up, with a more probable zone and a highlighted point marked with '?'. Explain what this point represents and how defining it helps a business.

Explain what a scenario is in planning and two characteristics it must have to be useful (plausible, internally coherent), and reason why a scenario is not a prediction.

For a tour coach company, write an example of a probable scenario, a possible one and a preferable one five years ahead, and explain what distinguishing them is useful for.

To explore the future of a newsagent's kiosk, propose two key highly uncertain variables (for example, paper press reading habits and kiosk regulation) and justify why you would choose those and not others.

Explain what a robust decision is (one that works well in several different scenarios) and give an example for a clothing shop that is unsure whether to open an online shop, whatever consumption scenario arrives.

Weak signals are early hints of change that are not yet trends. Explain what they are, why they should be watched and which signals a taxi company should watch (shared mobility apps, rules on autonomous vehicles, young people's habits).

A traditional driving school observes the arrival of autonomous vehicles. Construct two ten-year scenarios (one in which autonomous driving takes over rapidly and another in which it progresses slowly) and explain a robust decision it could make today that would serve it well in both cases.

To construct scenarios, two or three key variables with high uncertainty are selected. Propose the two key variables you would use to explore the future of physical bookshops and justify why they carry the highest uncertainty and impact.

A business always plans around a single future ('sales will grow by 5%'), and for two consecutive years reality proves it wrong. Analyse the risks of planning around a single future and what would change in its planning process if it worked with three scenarios.

A gardening company fears irrigation restrictions due to drought. Build two scenarios five years ahead (severe and frequent restrictions versus occasional restrictions) and propose a robust decision for today, such as specialising in low-water-consumption gardens, that serves it in both.

For the future of cinemas, choose two axes of uncertainty (audiovisual consumption habits at home, price and appeal of the going-out experience) and describe, giving each its own name, the four scenarios formed by crossing them.

A classroom training company works with three scenarios about artificial intelligence in education. Propose one measure that makes sense in all three (training its team in the didactic use of AI) and explain why this type of "no-regret" measure is the first to take.

A turrón factory plans every year as if Christmas were always the same, and has had two financial years with surpluses due to changes in consumption habits. Analyse the risk of planning with a single future and explain how its planning would change with three scenarios (stable traditional demand, falling consumption of sweets, growth of healthy options).

An agricultural cooperative defines its preferable scenario ten years ahead: selling 60% of its production directly to the consumer. Explain what defining the desired future is for (it guides today's decisions) and propose two steps the cooperative could take now to move closer to it.

A rural hotel fears that climate change will reduce the snowfall that attracts its winter guests. Construct two scenarios (winters with scarce snow versus variable but snowy winters) and propose two investments that make sense in both, and one that only makes sense in one, explaining the difference.

During a corporate strategy meeting, an executive states: «Designing alternative scenarios is a waste of time: a good manager's job is to accurately predict the future and bet on it». a) Refute this executive's statement by conceptually differentiating between prediction and scenario exploration in volatile and complex environments. b) Justify what strategic value the scenario planning technique brings to a company even if, in the end, none of the proposed scenarios materializes literally.

Design a scenario exercise for a local bookshop: choose two uncertainty axes (for example, e-book pricing and youth reading habits), describe the four resulting scenarios in words, name each one, and explain what the most unfavourable scenario would look like and what the bookshop would do to survive in it.

"FotoEstudio" is a photography shop-workshop (developing, courses, studio rental). a) Choose two axes of uncertainty for its future (quality of mobile phone cameras, demand for in-person experiences) and justify them. b) Describe, with names, the four resulting scenarios. c) Explain what the most adverse scenario would look like and what strategy the shop would follow in it.

Following a severe international logistics crisis that disrupted major ports, the shipping company TransOcean reconfigured its routes in two weeks, while its main competitor took four months and suffered million-euro losses. The latter's management claimed: «It was a completely unpredictable event; no one could have anticipated it in their business plan». a) Refute the competing company's argument by differentiating between predicting a specific event and preparing for plausible uncertainty scenarios. b) Explain what strategic and operational advantages TransOcean gained through prior scenario planning, justifying why the value of this method lies in organizational learning rather than mere probabilistic accuracy.

A bakery is undecided between two investments: expanding the workshop (it gains $80.000\ \text{€}$ if demand grows and loses $30.000\ \text{€}$ if it falls) or strengthening the online shop (it gains $30.000\ \text{€}$ if demand grows and loses $5.000\ \text{€}$ if it falls). a) Analyse each option in the two scenarios. b) Reason the difference between the optimal option in one scenario and the robust option in all of them, and recommend one according to the company's risk profile.

Design a scenario exercise for a beach restaurant: choose two axes of uncertainty (international tourism, episodes of extreme weather in summer), describe the four scenarios with names and point out which two signals the restaurant would watch every spring to know which scenario the year is moving towards.

The technology department of a retail chain proposes eliminating strategic scenario workshops and relying solely on advanced analytics: “With the millions of customer and sales data points we process using Big Data, scenario planning has become obsolete; algorithms already tell us precisely what is going to happen.” a) Critically evaluate this proposal by explaining the limits of quantitative models based on historical series when facing situations of radical uncertainty or unforeseen paradigm shifts. b) Design a proposal justifying how Big Data analysis and the scenario method should complement each other to strengthen the company's strategic decision-making.

Unit challenge. Imagine that you are going to start a business in your municipality. Your mission is to detect a differentiated business opportunity and project its viability against the competition and the future.

1. Competitor mapping: Choose an everyday sector (e.g., coffee shops, bookstores, or sportswear). Analyze 3 real local businesses in your area and check on the INE website (DIRCE portal) how many companies exist in that industry. Design a table comparing their target audience, prices, and value proposition.

2. Niche detection: Identify an underserved segment in your town and define an innovative proposal that meets their needs, detailing your competitive advantage.

3. Scenario planning: Model two 3-year scenarios (an adverse one with inflation at $3,5\,\%$ and rising costs, and a favorable one with accelerated local digitalization). Explain how your business model would pivot in each context to survive.

Submit a one-page executive report with your table and reasoned proposal.

Assessment criteria:

• Rigor in using INE data and empirical competitor analysis.

• Originality and economic grounding of the detected market niche.

• Methodological coherence and anticipation capacity in the scenario design.