---
name: Scenario Analysis
description: Decide under uncertainty.
---
# Scenario Analysis

Scenario analysis evaluates a decision across multiple plausible futures, so you choose an option that's robust rather than optimal in one forecast that won't happen.

## Method
- **Define 3-4 scenarios.** Not "best/worst/base" with arbitrary numbers — coherent stories: "smooth growth", "recession hits Q3", "competitor undercuts price".
- **Specify the variables that change.** Revenue growth, margin, cost of capital. Hold the rest constant.
- **Run the decision under each.** Does the chosen strategy survive all scenarios, or only the rosy one?
- **Identify triggers.** "If Q2 revenue misses by >15%, switch to plan B." Pre-decide the pivot so you don't agonize in the moment.

## Avoid
Hundreds of scenarios. You won't act on more than a few; depth beats breadth.