Forecasting based on historical data involves using existing information or recorded past events to make predictions about the future. This type of forecasting is a key tool for businesses looking to stay ahead of the curve by planning for upcoming opportunities and threats. By studying customer trends, market fluctuations, and other measurable data from the past, companies can gain valuable insight into what changes might take place in the future. This forward-looking approach helps organizations anticipate problems before they arise, allowing for quick and effective solutions.