Scenarios: exploring ideas and new 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.

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.

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.

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.

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.