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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
Potential usefulness of scenario planning
Answer
Scenario planning enables ASOS to identify key risks and respond swiftly to incidents, such as the Berlin fire, minimizing operational disruptions. With a solid plan in place, the company can maintain confidence among investors and continue its operations, fulfilling orders from different warehouses, thereby managing the impact of unforeseen events more efficiently.
Step 2
Potential limitations of scenario planning
Answer
Despite the advantages, ASOS still faced significant losses from the Berlin fire, which highlights that scenario planning cannot eliminate all risks. Resources allocated towards risk identification may also reduce investment in other essential business functions. In this case, a trade-off occurs where time and money spent might have alternative productive uses.
Step 3
Potential judgement on scenario planning
Answer
Overall, ASOS's scenario planning appeared beneficial as it allowed for a prompt response to the fire, restoring operations and reassuring stakeholders. However, the business should acknowledge that while these plans are crucial, unpredictability in business environments means that complete risk avoidance is often unattainable.