Question

are developing strategic plans to address plausible future situations like rise in the prices of cotton and synthetic fabrics by 20 percent, appreciation in the value of the dollar, increase in the cost of labor by 30 percent, and increase in demand for the company's products. By doing so, the company will be well prepared with its planned responses if any of these situations occurs in the future. Thus, Red Couture is employing ________ as the approach to the development of strategy.

Answer 1

Answer:

Scenario planning approach

Explanation:

Scenario planning is a method used by organizations or businesses to make long term projections. It is also used when making strategic plans for the progress of the organization.

In scenario planning, assumptions about the future of an organization or business are made. These assumptions are aimed at discovering the possibility of that business to thrive under different economic and environmental conditions, and how the business can adapt to cope well with these changes.

For example, farmers use different assumptions or scenarios based on the weather to foretell how the harvest season will be. This guides them on whether to or not to make future investments and helps them to estimate what their sales could be.