Scenario analysis can help you prepare for an uncertain future

Few people could have anticipated the year we’re having. We’ve experienced substantial oil price cuts, liquidity issues in the bond market, a dramatic stock market correction and ongoing economic concerns related to the COVID-19 pandemic.

The magnitude of these simultaneous challenges underlines the need for business leaders to implement scenario analysis. Scenario thinking helps top managers assess the company’s readiness to respond to a wide range of situations and make any needed adjustments to the business as a result. Quantifying possible changes in the near future and defining the forces driving these changes gives businesses a powerful tool to guide their decisions in the present.

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