Geopolitical Exposure & Scenario Canvas

Find out which tariffs, sanctions, export controls and political shifts could hit your strategy, plan against a few different futures instead of one forecast, and decide in advance what you will do when a warning sign appears.

Evidence: mixed. Scenario planning comes from corporate practice (Wack, 1985); the few experiments with experts show that scenarios shift which options people prefer, and no study shows that firms using scenarios perform better. The exposure and resilience moves are consultancy practice (McKinsey, BCG, Bain, 2025-2026): widely used, not peer-reviewed research. Time estimates are rules of thumb.

Use it when:

• You are about to commit to a new market, supplier region or production site and the political risk has not been priced.
• Tariffs, sanctions or export controls have moved and you need to see what exactly is hit.
• You are preparing a strategy review, a board paper or a supplier negotiation and "it is uncertain" is the only thing you can say so far.

Skip it when:

• You only need a best, base and worst case around one forecast: that is a sensitivity range, not scenario planning. Use 5.6 Risk & Leverage Checklist.
• You are still choosing which markets to look at: start with 7.11 Market Screening Table, then return here for the short list.

A single forecast concentrates attention on one path just when the environment is branching. Scenario planning, as Wack (1985) described it from corporate practice, answers this by rehearsing a few different futures so that someone has already lived in the unlikely one when it arrives. The evidence is mixed: Phadnis et al. (2015) ran three field experiments with experts and found that scenarios did not change overall confidence but moved judgments toward flexible options. No study here shows better company results.

That sets the craft rules. Keep scenarios few and different enough to change decisions, and tie each to a prepared response; otherwise they are forecasts in costume. The exposure and resilience steps added on top are what consultancies currently report working across many firms. Borrow them with judgment.

List the dependencies that matter most, markets you sell in, suppliers and inputs, technology and data, and for each say what could hit it and how fast you could replace it.

Strong answer: (illustrative numbers) "US: 30 percent of revenue; a tariff on our product class would cut margin; replaceable only over two to three years because the service network is local." Not: "The US is important to us."

Relative exposure: a disruption that hits your rivals harder than you is an opening, not only a threat.

• Main competitors more exposed than us, and where:
• Main competitors less exposed than us, and where:

Illustrative example: the company is made up.

A Swedish maker of forestry machinery sells in the EU, the US and Canada. It buys hydraulic components from one Asian supplier and control electronics from two. Section 1: North America is the largest market and a tariff on the product class would squeeze margin; the hydraulics supplier has no qualified alternative and switching would take about a year. Rivals with US assembly are less exposed. Section 2: A, open trade; B, regional blocs with local-content rules. Section 3: low regret is qualifying a second hydraulics supplier; the bet is a US assembly line, sized to what the company can lose; the option is a lease on an assembly site, held but not signed. Section 4: "New local-content rule in the US" points to B, response "sign the lease, start assembly in 12 months", owner head of operations.