Business Policy and Strategic Management : Environmental Scanning

2. TASKS TO BE DONE
ENVIRONMENTAL SCANNING
SETTING VISSION AND MISSION STATEMENT
SETTING STRATEGIC OBJECTIVES
CRAFTING STRATEGIES
IMPLEMENTING/EXECUTING STRATEGIES
PERFORMANCE EVALUATION AND REVISIONS

3. THE NATURE OF ENVIRONMENTAL
SCANNING
Environmental scanning is critical in the sense
that the business organization has to be
responsive to the prevailing and upcoming
situations or scenarios.
• Environmental scanning is a process that takes
into account both external and internal
environment
• ( Wheleen and Hunger as well as Rayport and
Jaworski )

4. THE MARCO ENVIRONMENT
Essentially refers to all forms of direct and
indirect factors of overall environmental
conditions at large considered external or outside
the business organization.

5. COMPONENTS OF A COMPANY’S MACRO ENVIRONMENT

6. ENVIRONMENTAL VARIABLES

7. IMPORTANT VARIABLES IN SOCIETAL ENVIRONMENT
ECONOMIC TECHNOLOGICAL POLITICO -
LEGAL
SOCIO –
CULTURAL
Total government
spending for R& D
GDP trends Total industry
spending for R & D
Antitrust
regulation
Lifestyle changes
Interest rates Focus on
technological efforts
Environmental
protection laws
Career
expectations
Money supply Patent protection Tax Laws Consumer
Activism
Inflation rates New products Special Incentives Rate of family
formation

8. Unemployment
levels
New developments
in technology
transfer from lab to
marketplace
Foreign trade
regulations
Growth rate of
population
Wages / Price
controls
Productivity
improvements
through automation
Attitude toward
foreign companies
Regional shifts in
population
Devaluation/
revaluation
Internet availability Laws on hiring
and promotion
Life expectancy
Energy availability
and cost
Telecommunication
infrastrusture
Stability of
government
Birth rates

9. IMPORTANT VARIABLES IN INTERNATIONAL SOCIETAL
ENVIRONMENT
ECONOMIC TECHNOLOGICAL POLITICO -
LEGAL
SOCIO –
CULTURAL
Economic
development
Regulation on
technology
Form of
government
Cusoms , Norms
values
Per capita
income
Energy
Availability/costs
Political ideology Language
Climate Natural resource
availability
Tax Laws Demographics
GDP rates Transportation
network
Stability of
government
Life expectations
Monetary and
fiscal policies
Skill level of work
force
Government
attitude toward
foreign companies
Social institutions

10. Unemployment
level
Patent trademark
protection
Regulation on
foreign ownership
assets
Status symbols
Currency
converibility
Internet
availability
Strength of
opposition groups
Lifestyles
Wage levels Telecommunicatio
n infrastructure
Trade regulations Religious beliefs
Nature of
competition
Protectionist
sentiments
Attitude towards
foreigner
Membership in
regional
economic
association
Foreign policies Literacy levels
Terrorist activity Human rights
Legal System Environmentalism

11. SWOT
Strength
Weakness
Opportunity
Threat

12. STRENGTH
 Valuable competencies or know – how
 valuable physical assets
Valuable human assets
 Valuable organizational assets
 Valuable intangible assets
 Important competitive capabilities
 an attribute that places a company in a position
of market advantage

13. WEAKNESS
 Deficiencies in know – how relate or expertise or
competencies
 lack of important physical, organizational or
itangible assets
 missing capabilities in key areas

14. OPPORTUNITIES
Refer to the situations where there are potentials
fro developing into products or services or other
business opportunities.

15. THREATS
Are usually come in the form of internal and
external factors that may put the firm in
uncompromising situation.

16. EXAMPLES OF SITUATION WHICH CAN
POSE AS THREATS TO THE BUSINESS IN
GENERAL
 Emergence of cheaper/ better technologies
 introduction of better products by rivals
 intensifying competitive pressures
 onerous regulations
Rise in interest rates
Potential of a hostile takeover
 unfavorable demographic shifts
 adverse shifts in foreign exchange rates
 political upheaval in a country

17. Presented by:
Brenda Acojedo Almerina