ENVIRONMENTAL
SCANNING
Scanning means “to look carefully or to examine”.
The term environmental scanning in business means
“Carefully analyze the various factors influencing the
business ”
The process by which organizations monitors their
environment to identify opportunities and threats
affecting their business, is known as environmental
scanning.
Environmental Scanning is a process by which
Strategist monitor the environmental factors to
determine opportunities threat to their firms.
Environmental Scanning also consist of managerial
decision made by accessing the significance of data of
the Environmental analysis.
Environmental scanning is the process of
continually acquiring information on events
occurring outside the organization to identify and
interpret potential trends.
Environmental scanning is a process of
gathering, analyzing, and dispensing information
for tactical or strategic purposes. The
environmental scanning process entails obtaining
both factual and subjective information on the
business environments in which a company is
operating or consider entering.
PURPOSE
The basic purpose of environmental scanning is
to help management determine the future
direction of the organization.
PROCESS OF ENVIRONMENTAL
ANALYSIS
1. Scanning It means to get relevant, proper
or complete information from the available all
information. With the help of relevant
information, an organisation can make a good
strategy through which our missions and
objectives of success will be achieved.
2. Monitoring After collecting relevant
information, the second step is to monitor or
check the nature of the environmental factors.
It is a follow up process after scanning.
PROCESS OF ENVIRONMENTAL
ANALYSIS
3. Analysing It requires data, tools
and techniques through which we can analyse
the collected relevant information or determine
whether the scan information is useful for an
organisation or not. SWOT analysis means
strength, weakness, opportunity, and threat
analysis and ETOP means environmental
threat and opportunity profile technnique,
used for environmental analysis. WE can use
analysing tools such as correlation, regression,
multiregression, factor etc.
PROCESS OF ENVIRONMENTAL
ANALYSIS
4. Forecasting Forecasting is a
technique of finding future possibilities based
on the past results and present scenario.
Modern management employs a number of
forecasting techniques to cope with the real
world business problems. The aim of
forecasting is to reduce the risk that the firm
faces in its short term operational decision –
making and in planning for its long term
growth. Forecasting is necessary to predict
about future event before any strategic plans
are formulated. Forecasting is made for
economic, social, political and technological
elements of environement.
LIMITATIONS OF ENVIRONMENTAL
ANALYSIS
NEED/IMPORTANCE OF ENVIRONMENTAL
SCANNING :
To frame policies & help in decision-making.
To identify the strength & weaknesses of the business.
To identify the opportunities & threats faced by
business.
To analyze competitors strategies.
To bring innovation & change.
To know the internal environment.
To understand market conditions.
To forecast demand.
To make time gap arrangement.
To understand economic policies of government & their
impact on business.
CONTDD…….
The environment is dynamic in nature, therefore
scanning is necessary to keep abreast of change.
It reveals the elements or factors that constitute
threats and opportunity to the overall objectives
of the organization.
Competitor’s activities can be monitored and
appropriate strategies put in place to check
market incursion.
It gives necessary inputs to the formulation and
implementation of potent marketing strategies.
METHODS OF ENVIRONMENTAL SCANNING
Secondary data collection approach such as
articles, textbooks, magazines and ready-made
information etc.
Primary data collection approach, using research
instruments such as questionnaire,
Personal interview, personal observation etc.
Establish a unit within the organization which
will responsible to scan wide range of
environmental factors and makes forecast about
specific variables through qualitative and
quantitative means.
FACTORS AFFECTING ENVIRONMENTAL
SCANNING
EVENTS : Important and specific occurrences
that taking place in a certain sector . Past events
of business environment is the important factor
of business environment.
TRENDS : The general tendencies of courses of
action along which these events take place. Not
to just see the past events are defective but to
establish the trends on the basis of events is also
very important factor of business environment
scanning.
CONTDD……
ISSUES : The current concerns that arise in
response to events and trends. As a businessman,
have to scan both cold and burning issues on
daily basis.
EXPECTATIONS: The demand made by
interested groups in the light of their concern for
issues.
KIND
ADHoc
Regular
Continous
APPROACHES TO ENVIRONMENTAL SCANNING
SYSTEMATIC APPROACH /CONTINOUS
information for environmental scanning collected
systematically
Information pertaining to business and industry
could be collected continuously to monitor
changes
Continuous updating necessary not only for
strategic management but also for operational
activities
In this approach information is collected relating
to mkt customers,changes in legislation govt.
policy have a direct impact on organisation.
ADHOC APPROACH
Organisations conduct special surveys and
studies to undertake special projects, evaluate
existing strategies or devise new strategies
Changes and unforeseen developments may also
be investigated
PROCESSED FORM APPROACH/
PERIODIC
Information used is supplied by govt agencies or
private instituitions
Secondary data available from external and
internal sources may also be used
SCANNING THE EXTERNAL ENVIRONMENT
TECHNIQUES OF SCANNING
Issue Priority Matrix
ETOP
SAP
SWOT
Functional area profile
The Opportunity and Threat Matrix
The Impact Matrix
PEST
REFERENCE
https://studiousguy.com/techniques-of-
environmental-scanning/
https://www.vedantu.com/commerce/environment
al-scanning
https://arts.brainkart.com/article/techniques-of-
scanning---environmental-scanning-techniques-
1221/
