School of Sport, Performing Arts and Leisure
“An Essay on the Effectiveness of Scenario Planning in Hospitality Industry for Determining Future Strategies”
THE EFFECTIVENESS OF SCENARIO PLANNING IN DETERMINING THE FUTURE STRATEGIES (A STUDY ON HOSPITALITY INDUSTRY)
Scenario planning is a practice of predicting many, reasonable and uncertain futures
(Hiejden et al., 2002).Scenario planning, which is often otherwise called scenario thinking or scenario analysis, is a strategic planning method that organizations use to make supple, durable and continuing strategies (Schoemaker, 1995) Pierre (1985) revealed that scenario planning is about determining what could possibly happen in the future.
Mercer (1995) identifies that the basic concepts of Scenario planning are relatively very simple when compared to other management topics of study. Schoemaker (2002) defines that companies need to opt scenario planning to pick the gear on changing circumstances, and to have a right strategy in time. Scenario planning helps to test the consistency in business. It is very much needed to make sure that the companies have right contents that are viable and make necessary changes to ensure the feasibility (Schoemaker, 2002).
Capon (2008) reckons that “strategy is to provide organizations with directions” to have a clear idea of the paths that a company choose to achieve its aim is very much necessary, and thereby success which is considered as the ultimate goal of any company. Strategy provides focus and overview for managers and other workers in an organization, includes management of internal as well as external stakeholders, creates competitive advantages and allows organizations to foresee the challenges to be dealt with in future regarding competitiveness and sustainability (Capon, 2008).
Strategy is originally a term used in military, which has been adopted by managers to define boundaries for their business (Nickols, 2010). Nickols (2010) states “Strategy is about means and the attainment of ends, but not their specification. The specification of ends is a matter of stating those future conditions and circumstances toward which effort is to be devoted until such time as those ends are obtained.”
Strategic plans or scenario planning was often considered as an ‘official future’, of an organization, in the past. Trend line generation based on understanding the past trends in business was often considered as the most appropriate method of scenario planning (Schoemaker, 1995).
These naive guesses are often proved effective, but impulsive changes in social, environmental and economy might have a very negative impact on scenarios set on these kinds of simplistic guesses (Schoemaker, 1995). Scenario planning helps to identify with how the different strands of a composite tapestry move if one or more threads are pulled (Schoemaker, 1995).
Scenario planning is believed to be set up on two major...