SPP Scenario Planning & Forecasting 2 — Questions and Answers
Question 1: Which technique involves assigning probabilities to different future states and calculating expected outcomes across scenarios?
- Delphi method
- Probabilistic scenario analysis (Correct answer)
- Trend extrapolation
- Morphological analysis
Correct answer: Probabilistic scenario analysis
Probabilistic scenario analysis attaches likelihood estimates to each scenario and computes weighted expected outcomes.
Question 2: In scenario planning, a 'wild card' event is best described as:
- A highly probable trend with moderate impact
- A low-probability, high-impact discontinuity (Correct answer)
- A regulatory change with predictable timing
- A competitor action already underway
Correct answer: A low-probability, high-impact discontinuity
Wild cards are low-probability but potentially transformative events that can invalidate existing scenarios.
Question 3: The primary purpose of wind-tunneling a strategy is to:
- Select the most optimistic scenario for planning
- Test how a proposed strategy performs across all scenarios (Correct answer)
- Identify the single most likely future state
- Eliminate low-probability scenarios from consideration
Correct answer: Test how a proposed strategy performs across all scenarios
Wind-tunneling stress-tests a strategy against each developed scenario to reveal vulnerabilities and robustness.
Question 4: Which forecasting method is most appropriate when historical data is absent but expert knowledge is available?
- Time-series analysis
- Econometric modeling
- Qualitative Delphi method (Correct answer)
- Moving average
Correct answer: Qualitative Delphi method
The Delphi method systematically collects and refines expert opinions when quantitative data is lacking.
Question 5: A 'focal question' in scenario planning serves to:
- Define the quantitative target for the planning horizon
- Frame the central strategic uncertainty that scenarios will explore (Correct answer)
- Identify the most likely competitive response
- Set the annual budget allocation for scenario work
Correct answer: Frame the central strategic uncertainty that scenarios will explore
The focal question anchors scenario development by articulating the key strategic decision or uncertainty under examination.
Question 6: In the GBN (Global Business Network) scenario matrix, the two axes represent:
- Best-case and worst-case financial outcomes
- The two most critical and most uncertain driving forces (Correct answer)
- Short-term and long-term planning horizons
- Internal strengths and external opportunities
Correct answer: The two most critical and most uncertain driving forces
The GBN matrix places the two most impactful and uncertain drivers on each axis to generate four distinct scenarios.
Question 7: Early warning indicators (EWIs) in scenario planning are used to:
- Predict exact timing of future events
- Signal which scenario is beginning to materialize (Correct answer)
- Eliminate the need for contingency plans
- Replace annual strategic reviews
Correct answer: Signal which scenario is beginning to materialize
EWIs are pre-identified metrics or signals that alert planners when a particular scenario is becoming reality.
SPP Scenario Planning & Forecasting 2
Which technique involves assigning probabilities to different future states and calculating expected outcomes across scenarios?