Compare and contrast the concepts of scenario planning versus traditional forecasting.

            Scenario planning simplifies possible paths of information into a subset of attainable goals (Schoemaker, 1995). While this reference is data, it does represent one of the earliest works that analyze the scenario planning attributes. Scenario planning gathers known facts and attempts to answer the future “what if” question based on current known states (Bradfield et al., 2005). A good example of scenario planning is military modeling to predict readiness needs. For example, the United States conducted an exercise in which China invaded Taiwan to determine a response strategy and the tools needed to ensure Taiwan’s continued independence and democracy (Hastings, 2021). In general, scenario planning defines all currently known conditions and attempts to predict a path that leads to success should a specific challenge arise.

            Traditional forecasting uses history and assumes future states are consistent with past trends (Ren et al., 2020). The analysis of historical data is relatively easy to plot and provides easy visual references. We frequently see this type of analytics in a stock market portfolio and retirement plans. In this scenario, the trending of data into the future is determined by past performance. For example, healthcare finances are stable over time and easily projected using traditional methods (Belle et al., 2015). However, we often see emerging trends such as seasonal flu based on current data from another part of the world. Another example is the current COVID pandemic. Many medical community members predicted the crises shortly after the first cases observed outside China (Dhar et al., 2019).  

The simplicity of traditional forecasting is the primary strength of the method. Moreover, the technique proves very flexible in predicting future trending. The downside is the lack of specificity regarding a course of action, and history isn’t always a good predictor of future trends. On the other hand, scenario planning provides a very clear path towards a future state but is very complex and lacks flexibility.

References

Belle, A., Thiagarajan, R., Soroushmehr, S. M. R., Navidi, F., Beard, D. A., & Najarian, K. (2015). Big Data Analytics in Healthcare. BioMed Research International. https://doi.org/10.1155/2015/370194

 

Bradfield, R., Wright, G., Burt, G., Cairns, G., & Van Der Heijden, K. (2005). The origins and evolution of scenario techniques in long range business planning. Futures, 37(8), 795-812. https://doi.org/10.1016/j.futures.2005.01.003

 

Dhar, A., Shafie Kamaruddin, A. A., Peter, P., & Cowie, S. (2019). Managing the COVID-19 pandemic: innovations, adaptations and leadership. JR Coll Physicians Edinb, 49, 0-00.

 

Hastings, M. (2021). America Is Headed to a Showdown Over Tawant, and China Might Win. Bloomberg Opinion. Retrieved 5/5/2021, from https://www.bloomberg.com/opinion/articles/2021-03-14/max-hastings-china-might-defeat-america-in-war-over-taiwan

 

Ren, S., Chan, H.-L., & Siqin, T. (2020). Demand forecasting in retail operations for fashionable products: methods, practices, and real case study. Annals of Operations Research, 291(1), 761-777.

 

Schoemaker, P. J. H. (1995). Scenario Planning: A Tool for Strategic Thinking. Sloan Management Review, 36(2), 25. https://perdoceoed.idm.oclc.org/login?url=https://www.proquest.com/scholarly-journals/scenario-planning-tool-strategic-thinking/docview/224969642/se-2?accountid=144789