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Three Decades of Scenario Planning in Shell
Cornelius, Peter , Alexander Van de Putte, and Mattia Romani
48/1  (Fall 2005): 92-109

Major shifts in the business environment can make whole investment strategies obsolete. In order to anticipate such shifts, the Royal Dutch/Shell Group of Companies uses scenario analysis, a method it pioneered three decades ago. Given that most investments are irreversible, scenario planning can be combined with real options analysis to help identify options in the future; help time the decision to exercise a real option; and provide an important input in the process of evaluating real options.

 

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