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Traditional Forecasting versus Scenario Forecasting

Predicting the future requires knowledge and data gathering for sound decisions and plans. Each business has unique qualities and income potentials. A business plan must contain a prediction of the future so costs and income can be planned. The plan drives the day to day, as well as the overall drive of the business. Without a plan business leaders and owners have no footing to help stay focused on the business, as well as make plans that are sound for growth and innovation. Any business that is successful had a plan and an idea on what the future will bring. Without future predictions business owners are left to luck and chance.

Traditional Forecasting

Traditional forecasting uses a profit and expense basis for designing the future of a business. As stated in Forbes magazine (n.d.) this is the tradition of most businesses. The income levels versus expenditures can predict the trajectory of a business, and if graphed, can project income for the future. This is an easy and well worn plan that has been used for years, and does not take too much effort to create a prediction for the future of a business.

However this plan is fundamentally flawed. Variables of business are changed influenced by various outside influences. Trends and expertise are not drawn from to help the future of business, and the business will likely fail if this is the only basis for future predictions. Traditionally forecasting has limited data and is dependent on past performance.

Scenario Planning

Scenario planning predicts future environments to help understanding of trends. This helps companies adjust to possible future business changes. The analysis is designed around the business type and the variables that can change future views as noted in the Personal expert system blog (2013). In the scenario planning scenario, the blog discusses the future of the newspaper business. This business is threatened by online versions and new business concepts. From the case study we can conclude that variables are identified and can effect future decisions. In the newspaper scenario discussed the expert came up with some “what-if” situations. This planning helps businesses and business leaders have options for future planning.

Predicting future possibilities can be minimized by what we know. But, what if the business is threatened by unseen technology? Who could have predicted the fast rise of something like YouTube (Johnson, 2011)? Scenario planning requires more detail in the data as well as a more complex analysis of the data.


Johnson, S. (2011). Where good ideas come from: The seven patterns of innovation. London: Penguin.

Personal Expert System: World Association of Newspapers Scenario Planning. (2013, January 1).

Traditional Forecasting Leads to Traditional Results…Failure. (n.d.).

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