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Assess the usefulness of scenario planning to a business, such as ASOS - Edexcel - A-Level Business - Question 2 - 2019 - Paper 2
Question 2
Assess the usefulness of scenario planning to a business, such as ASOS. Scenario planning is the process of anticipating possible changes in a business's situation ... show full transcript
Worked Solution & Example Answer:Assess the usefulness of scenario planning to a business, such as ASOS - Edexcel - A-Level Business - Question 2 - 2019 - Paper 2
Step 1
Assess the usefulness of scenario planning to a business, such as ASOS.
Answer
Scenario planning is critical for businesses to prepare for uncertainties and risks. For ASOS, their ability to respond quickly to the Berlin fire demonstrates the effectiveness of having a scenario plan in place. The Barnsley fire helped ASOS identify potential threats, allowing them to react swiftly and minimize operational disruptions.
Despite the situation, ASOS managed to maintain operations in Germany and the UK, ensuring consistent service to their online customers. This highlights that a robust scenario plan can facilitate business continuity, even amidst crises.
However, limitations exist. ASOS still faced a £6m loss in stock due to the Berlin incident, indicating that scenario planning cannot completely prevent damages. Additionally, the costs associated with identifying potential risks might divert funds from other essential areas such as marketing or website development.
In summary, while scenario planning serves as a valuable tool for identification and mitigation of risks, it is not infallible. For ASOS, implementing effective scenario planning helped to cushion the impact of the Berlin fire, ensuring that they could still meet customer demands while navigating the challenges presented by the incident.