2. DEFINITION Environmental scanning can be defined as ‘the study and interpretation of the political, economic, social and technological events and trends which influence a business, an industry or even a total market. The factors which need to be considered for environmental scanning are events, trends, issues and expectations of the different interest groups. Issues are often forerunners of trend breaks.
3. MODES OF SCANNING There are three modes of scanning Systematic scanning - Information related to markets and customers, changes in legislation, regulations having a direct impact on the organization's activities, government policy etc. are collected continuously by taking relevant factors into account Ad-hoc scanning - Conducting special surveys and studies to deal with environmental issues from time to time Processed-form scanning - Using information in a processed form available from different sources inside and outside the organization
5. The six environmental factors of the PESTEL analysis are the following: Political factors Taxation Policy Trade regulations Governmental stability Unemployment Policy etc. Economical factors Inflation rate Growth in spending power Rate of people in a pensionable age etc. Technological factors Technological changes New or improved distribution channels Improved communication and knowledge transfer etc.
6. Environmental factors Laws on Waste disposal Energy consumption Pollution monitoring etc. Legal factors Unemployment law Health and safety Product safety Advertising regulations Product labelling etc.
7. Social factors. Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. In the UK, for example, the population has been ageing. This has increased the costs for firms who are committed to pension payments for their employees because their staff are living longer. It also means some firms such as Asda have started to recruit older employees to tap into this growing labour pool. The ageing population also has impact on demand: for example, demand for sheltered accommodation and medicines has increased whereas demand for toys is falling.
9. Strengths: characteristics of the business or team that give it an advantage over others in the industry. Weaknesses: are characteristics that place the firm at a disadvantage relative to others. Opportunities: external chances to make greater sales or profits in the environment. Threats: external elements in the environment that could cause trouble for the business.
