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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.
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
Understanding Scenario Planning
Answer
Scenario planning is a strategic method used by businesses to visualize different future conditions and their potential impacts. It helps organizations, like ASOS, to prepare for various market changes, uncertainties, or disruptions by considering multiple scenarios rather than relying solely on predictions. This flexibility can lead to more informed decision-making.
Step 2
Benefits of Scenario Planning for ASOS
Answer
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Risk Management: ASOS can identify potential risks, such as supply chain disruptions or market downturns, allowing them to create contingency plans.
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Strategic Flexibility: By preparing for multiple potential future environments, ASOS can swiftly adapt its strategies, whether launching new products or entering new markets.
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Resource Allocation: Understanding various scenarios can help ASOS decide where to allocate resources effectively.
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Market Insight: It provides essential insights into customer behavior and market trends, enabling ASOS to stay ahead of competitors.
Step 3
Challenges of Implementing Scenario Planning
Answer
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Complexity: Developing multiple scenarios requires significant time and expertise, which can be challenging for ASOS, especially if the market shifts quickly.
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Over-Reliance: There is a risk of over-relying on scenario planning, potentially leading ASOS to ignore immediate operational challenges or tactical decisions.
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Unpredictability: Some events are inherently unpredictable; scenario planning may not account for every potential disruption, such as sudden technological changes or economic crises.
Step 4
Conclusion and Recommendations
Answer
While scenario planning offers valuable tools for ASOS to navigate uncertainties, it should complement other planning methods. It’s crucial for ASOS to balance scenario planning with agile decision-making approaches to respond effectively to both anticipated and unforeseen challenges in the fast-paced fashion industry.