What is scenario planning?
Scenario planning develops a few plausible future situations — based on key uncertainties such as demand, costs or regulation — and works out how the business would respond in each. It was made famous by Shell in the 1970s oil crisis.
How to do scenario planning
- Define the question and time horizon.
- List the driving forces (use PESTLE).
- Pick the two or three most uncertain, high-impact ones.
- Build 3–4 scenarios (e.g. best, base, worst, wild-card).
- Model the financial and operational impact of each.
- Define triggers — signs that a scenario is unfolding — and planned responses.
Example: input costs
| Scenario | Raw material cost | Response |
|---|---|---|
| Best | −5% | Invest in growth |
| Base | +5% | Small price increase |
| Worst | +20% | Menu/product redesign, renegotiate suppliers |
Common mistakes to avoid
- Only planning for the base case.
- Too many scenarios to act on.
- No triggers, so nobody knows when to switch plans.
How DOOfy helps
Scenarios need a live baseline and early-warning triggers. AIMOS One tracks the actual drivers — costs, demand, margins — so you can see which scenario is unfolding and act early.
Frequently asked questions
How many scenarios should you build?
Usually three or four — enough to cover the range of outcomes without becoming unmanageable.
What is the difference between scenario planning and forecasting?
A forecast predicts the most likely outcome; scenario planning prepares for several possible outcomes.