Scenario Planning and War-gaming: What’s The Difference?
Like many strategic planning concepts, scenario planning and war-gaming mean different things to different people. However, there seems to be a strong tendency to confuse the two approaches, and to even consider them to be largely the same thing. Nothing could be further from the truth.
Scenario planning and war-gaming are two different techniques, with different outcomes and designed to solve different problems. What’s the difference?
- Purpose: Scenario planning is useful as the basis for strategic development — that is, to generate a range of options to consider depending on what the external environment might look like in the future. War-gaming is more operational and focuses on how to execute a particular strategic initiative — such as a new product launch or new market entry — or how to counter known external market developments — such as a particularly aggressive competitor or a new regulatory development.
- Timeframe: Scenario planning is a long-term technique. The timeframe for scenario planning is typically at least three years into the future, and more often as much as five or 10 years. War-gaming is a more near-term technique. The timeframe for war-gaming is usually two years into the future or less.
- Focus: Scenario planning is a broad technique, designed to address the intersection of several trends, including customers, competitors, technology, regulators, new entrants, etc. War-gaming is more focused, usually on one or several industry players, including one or more competitors, suppliers, or customers.