Scenario planning is the practice of creating varying courses of action for a business to implement based on potential events and situations, known as scenarios.
Potential business-related scenarios include changes to the market, problems with the supply chain, product releases from competitors, personnel changes and environmental events -- among an almost infinite number of other possibilities.
Having planning in place allows the business to respond to conditions more quickly and effectively. The practice allows a business to be more prepared for events that could cause risk or, alternatively, create opportunities that might be missed if the scenarios are not foreseen.
Tools such as what if scenario analysis (WISA) automate some of the processes involved to facilitate planning. WISA is a process that allows the user to see how changing specific inputs, such as costs, human resources and supply availability, affects outcomes such as the total cost or delivery date of a project.
See a video introduction to scenario analysis: