What is scenario planning: businesses may be subject unforeseen event, which could hamper their activities. Examples might be a fire that destroys promises, I break down the internal backup system that stores business information, all the sudden retirement of the CEO. Many businesses undertake scenario planning in an effort to deal with these events. Scenario planning is not about trying to predict future events. Is a strategic planning method design to export uncertainties, work out a protective business from the worst consequences and prepare how to exploit any opportunities that may present themselves. It is a disciplined approach to deal with uncertainty.
Scenario planning helps to:
- Clarify future uncertainties in a business
- Identify risks and opportunities
- Teach managers how events May transpire, develop and affect the business
- Understand the causes and effects of change in business and how to manage it
- Identify possible trends and issues this involves scanning the internal and external environment in an effort to spot any emerging threats that might impact on the business. Pestle analysis might be used to help this process
- To build possible scenarios. Businesses need to imagine a range of possible scenarios that might affect the operation. The background to these scenarios will be provided by the information gathered in the previous stage. These scenarios will vary between different businesses because different businesses are likely presented with different threat. For example, the supermarket chain is not likely to vote the scenario where people are trapped in aircraft taken over by terrorists.
- Plan response. This involves identifying as precisely as possible impact scenarios will have on the business and developing plans to deal with them. This is a lengthy process because such impact might be numerous and complex
- Identify the most likely scenarios. A business made identify a wide range of scenarios that could affect the business. However, the likelihood of different events occurring but have different probabilities. Business is not likely to have enough resources and responses to every single scenario. Therefore, it will be necessary to prioritise, say, the five most likely and the business can plan 3 responses to each.
- Capitalise on scenarios. This involves implementing the plant response when scenarios appear a likely reality. Not all scenarios have negative outcomes. For example, if the global economy goes and recession some firms can flowers by Karen from you needs. Those that are prepared for such a scenario may prosper
Risk assessment: when a business attempts to identify the possible scenarios in my face in the future, it might use risk assessment. This involves examining what might cause harm to people and identifying the precautions that might be taken to protect them from harm. One of the main purposes of risk assessment is to help comply with health and safety legislation. Workers have a legal right to protection in the workplace. However, the use of risk assessment to assess the business general. Therefore, it has a role to play in scenario planning. It can be used to help identify hazards, decide who might be harmed and estimate the probability of events occurring. This will help the first stage of scenario planning where the possible trends and issues identified.
Planning for risk mitigation: risk mitigation plans identify, assess and prioritise route. They also plan responses to deal with the impact these risks the operation of the business. In general, a business can use a number of mitigation strategies to reduce the damage caused by serious disruptive events. For example, it can:
- Set up in a location that is not a vulnerable to natural hazards
- Ensure that promises are constructed haunted building foods that are designed for safety and protection
- Take out adequate insurance policies to cover losses resulting from disasters semicolon for example, it might be possible to take out business interruption cover
- Ensure that data stored on computers is a stew as possible and that backup systems are adequate
- Organise backup Power, which is a generator, to ensure that vital machinery other equipment can still be used in the event of a power interruption
- Ensure that valuable assets, such as expensive machinery and tools, are protected as much as possible
- Ensure that there is access to emergency funding
- Ensure that adequate communications channels are set up to deal with the crisis
- Produce a business continuity plan to deal with the crisis