As the dust starts to settle after Brexit, we need to analyse what the impacts will be on our market and consider how this will affect us. There are a vast number of potential consequences and a lot of uncertainty around what the future will look like. A systematic way to re-evaluate your strategy is to utilise scenario planning. This tool allows us to narrow down uncertainty and plan potential responses to the most likely scenarios.
What is scenario planning?
Scenario planning provides a structured process for consciously thinking about future environments within which a company may need to operate. It enables executives to fully explore the range of possible futures, or ‘scenarios’ and identify the main drivers of change. It has historically been used by RAND, SRI International and Royal Dutch Shell and its applications have included predicting the Arab-Israeli war and the fall of the Berlin Wall.
How do I use it?
Scenario planning has 4 steps:
This in-depth understanding of the possible futures can be used as a basis for strategic planning. The main company business plan can be adapted to address the most probable scenario, and contingency plans can be developed for the range of probable scenarios. This is valuable because it allows you to respond to changing market dynamics more quickly than your competition, which is key in today’s turbulent markets.
What are the benefits?
The purpose of scenario planning is to deliver big benefits:
The Brexit uncertainty is an example of where scenario planning could provide structure and real insight that could substantially help your business. This is a team exercise, it provides an opportunity to get the leadership team on the same page, working through the process together, so you make some potentially big decisions.
How do you think Brexit will impact your market?
About the author:
Jonathan Davenport is Head of Market Analysis and has particular experience of using market and competitor analysis to support strategy development. He works for Milner Strategic Marketing, a business consultancy that helps companies grow their value by delivering a range of services from strategic management consultancy through to specific marketing programmes.