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Introduction
Most firms operate in uncertain and dynamic environments. To remain competitive they need to anticipate changes in their external marketing environment and be prepared to adapt business activities accordingly. Managers need to be prepared and have some outline plans for dealing with different eventualities so that they are less likely to be exposed to loosing business. This commentary focuses on how managers learn to "know" what is happening and what may happen in the marketplace, and discusses the use and value of scenario planning in the context of small to medium-sized enterprises (SMEs).
Formulating a marketing strategy
Every firm has to anticipate how its external environment might change over the short-, medium- and long-term. Such anticipated changes will have a direct impact upon marketing and managerial decision making, and firms will try to anticipate the effect of decisions against desired objectives. The process of strategy formulation allows firms to take decisions regarding actions and activities with the purpose of matching its internal competencies and the external environment it anticipates in the future.
In a dynamic environment where change occurs in unpredictable ways, the challenge for a firm is to have relevant information on which to base its decisions ([14] Duncan, 1972), and to engage in adaptive sense making of the environment ([8] Bogner and Barr, 2000). [41] Wang and Chan (1995), propose that there are three sequential steps: determination of the scope of information that will be sought; searching for information; and its interpretation. All of this suggests that a firm's ability to adapt to its external environment, as part of the strategy formulation process, is based on obtaining appropriate information, and interpreting it, as a precursor to strategic decision making ([4] Beal, 2000; [2] Analoui and Karami, 2002). However, the strategy formulation process includes a future orientation, in that the matching process is based on an external environment that is anticipated in the future. This additional dimension creates a "tension" between the need to adapt to what is happening in the external environment, and the need to anticipate a future environment ([9] Bukszar, 1999). It also highlights the issue of predicting the future configuration of the external environment and its relevance to the firm.
Environmental uncertainty
There are many definitions of uncertainty ([37]...