Question

Company AA has decided that it needs to improve its strategic decision-making process and is considering implementing Scenario Planning. The Management Accountant has been requested to investigate this further and also to consider how the company can use scenarios to formulate a competitive strategy. Which of the following statements are CORRECT? Select ALL that apply.

Accepted Answer

A company taking a flexible scenario approach plays a 'wait and see' game. It is a safe strategy but sacrifices first mover advantages.

Accepted Answer

Scenario Planning forces management to look externally at the wider business environment rather than focusing internally.

Accepted Answer

Scenario Planning helps a company to identify and cope with the key uncertainties to which it will be exposed.

Answer

When undertaking Scenario Planning the company will need to identify the key areas of certainty and their drivers.

Answer

A company which designs a strategy based on the scenario most attractive to the firm is using a 'hedge' approach.

Company AA has decided that it needs to improve its strategic decision-making process and is considering implementing Scenario Planning. The…

Take the free CIMAPRA19-E03-1 practice test

Other CIMAPRA19-E03-1 practice questions