Simulation scenarios - are used an assessment of the value of the strategic decisions. These decisions differ from each other in terms of the impact of the environment on company's situation.
Stages of preparation
Process of development of simulation scenarios consists of 7 stages:
- Specify environmental factors affecting the company and their intensity (expressed using units of measurement, and places of occurrence).
- Specify the descriptors of certain factors for the evaluation of main problem.
- Determination of the likelihood of the occurrence of descriptors from the previous stage.
- In this step model are checked through the calculation of a matrix of likelihood values.
- Scenarios are developed together with their descriptive part based on the model created in previous stage.
- At this stage it is possible to obtain variants of scenarios based on critical cases (scenarios with small probability, but serious consequences for the company).
- Summary of earlier stages is prepared, and managers make decision to choose the optimal strategy, which has slightest threat and gives a good chance of success.
- Postma, T. J., & Liebl, F. (2005). How to improve scenario analysis as a strategic management tool?. Technological Forecasting and Social Change, 72(2), 161-173.