Environmental Scanning:complete concept.


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The strategic management application and description of Environmental Scanning fully with various processes & resulting strategies.

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Environmental Scanning:complete concept.

  1. 1. Nature & Components of Environmental Scanning<br />Presented by:<br />Ashutosh Mishra<br />MBA (Mrktg.)<br />
  2. 2. What is Environmental Scanning?<br />Environmental Scanning: “A term coined in the mid-1960’s by Francis Aguilar, a Harvard Business School professor, to describe the action of watching and collecting information on a company’s rivals and the overall market.”<br />Source: Fuld & Company, Inc.<br />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.<br />
  3. 3. Common part of strategic analysis.<br />Environmental Scanning<br />Internal elements & external elements.<br />All are interrelated.<br />
  4. 4. Factors affecting Environmental Scanning<br />External Environment<br />Internal Environment<br />Events<br />Trends<br />Issues<br />Expectations<br />Infrastructure<br />HR<br />Hardware<br />Abilities<br />Structure<br />
  5. 5. Three approaches to Scanning<br />Kubr has suggested three approaches to scanning,<br /><ul><li>Systematic: Information related to markets & customers, changes in legislation & regulations that have a direct impact on organization’s activities that could be collected continuously to monitor changes.
  6. 6. Ad-hoc: Conduction of special surveys & studies to deal with specific environmental issues.
  7. 7. Processed form: Information available from different sources both internal & external of the organization in processed form.</li></li></ul><li>Sources of Information<br />
  8. 8.
  9. 9. What scanning can accomplish?<br /><ul><li>It helps an organization capitalize on early opportunities rather than lose these to competitors.
  10. 10. It provides an early signal of impending problems, which can be defused if recognized well in advance.
  11. 11. It sensitizes an organization to the changing needs and wishes of its customers.
  12. 12. It provides a base of objective qualitative information about the environment that strategists can utilize.
  13. 13. It provides intellectual stimulation to strategists in their decision making.
  14. 14. It improves the image of the organization with its publics by showing that it is sensitive to its environment and responsive to it.
  15. 15. It is a means of continuing broad-based education for executives, especially for strategy developers.</li></li></ul><li>PEST analysis: An environmental scan for business.<br />Micro Environment<br />Macro Environment<br />
  16. 16. Components<br />
  17. 17.
  18. 18. Current scanning processes<br /><ul><li>Porter’s Five Forces
  19. 19. Intelligence Cycle
  20. 20. Linear Process
  21. 21. Concentric Circles
  22. 22. Scientific Method
  23. 23. Hub & Spoke
  24. 24. Visualization</li></li></ul><li>P<br />O<br />R<br />T<br />E<br />R’<br />S<br />F<br />I<br />V<br />E<br />F<br />O<br />R<br />C<br />E<br />S<br />Source: Porter, Michael. Competitive Strategy. New York<br />
  25. 25. I<br />N<br />T<br />E<br />L<br />L<br />I<br />G<br />E<br />N<br />C<br />E<br />C<br />Y<br />C<br />L<br />E<br />Source: Journal of Business Strategy, May/June, 1988<br />
  26. 26. L<br />I<br />N<br />E<br />A<br />R<br />P<br />R<br />O<br />C<br />E<br />S<br />S<br />
  27. 27. C<br />O<br />N<br />C<br />E<br />N<br />T<br />R<br />I<br />C<br />C<br />I<br />R<br />C<br />L<br />E<br />S<br />
  28. 28. S<br />C<br />I<br />E<br />N<br />T<br />I<br />F<br />I<br />C<br />M<br />E<br />T<br />H<br />O<br />D<br />Source: Cliff Kalb, Merck<br />
  29. 29. Responses<br />When an issue is detected, there are generally six ways of responding to them:<br /><ul><li>Opposition strategy - try to influence the environmental forces so as to negate their impact - this is only successful where you have some control over the environmental variable in question .
  30. 30. Adaptation strategy - adapt your marketing plan to the new environmental conditions .
  31. 31. Offensive strategy - try to turn the new influence into an advantage - quick response can give you a competitive advantage .
  32. 32. Redeployment strategy - redeploy your assets into another industry .
  33. 33. Contingency strategy- determine a broad range of possible reactions - find substitutes .
  34. 34. Passive strategy - no response - study the situation further .</li></li></ul><li>R<br />E<br />F<br />E<br />R<br />E<br />N<br />C<br />E<br />S<br /><ul><li>Scanning the business environment- Aguilar, F.
  35. 35. The New Competitor Intelligence by Leonard</li></ul>M. Fuld. New York, John Wiley & Sons, Inc.,<br />1995.<br /><ul><li>Strategic Management & Business Policy by AzharKazmi, 3rd. edition</li></ul>http://www.bing.com<br />http://www.carr-research.com<br />