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Scenario analysis
Presented by: Francis Emezi Meaning and form of scenario analysis • Scenario analysis is a process used to evaluate and analyse possible future events by considering alternative possible outcomes (scenarios).
• This method is often used in strategic
planning, risk management, and decision-making to anticipate and prepare for potential changes in the business environment or other areas of interest Aspects of scenario analysis Identifying Key Variables: Determining the critical factors that could influence future outcomes, such as economic indicators, market trends, or regulatory changes. Developing Scenarios Creating a set of diverse and plausible scenarios that represent different ways the future might unfold. These scenarios typically include best-case, worst-case, and most likely scenarios. Analyzing Impacts Assessing the potential impacts of each scenario on the organization or project, including financial, operational, and strategic implications Planning Responses Developing strategies and action plans to address the challenges and opportunities presented by each scenario. Benefits of scenario analysis • Scenario analysis helps organizations to be more flexible and resilient by preparing for a range of possible futures, rather than relying on a single forecast. • It encourages proactive thinking and can improve decision-making by highlighting risks and opportunities that might not be immediately apparent.
