This document discusses environmental scanning, which is the process of gathering, analyzing, and sharing information for strategic purposes. There are three types of environmental scanning: ad-hoc, regular, and continuous. Environmental scanning examines both external and internal factors. Externally, it analyzes the macro environment using the PEST framework of political, economic, social, and technological factors. It also analyzes the micro environment using Porter's five forces model of new entrants, substitutes, buyer power, supplier power, and industry rivalry. Internally, environmental scanning analyzes the company's internal environment. The document concludes that environmental scanning is useful for revealing current market conditions and helping managers predict future conditions to make strategic decisions.

1. Business EnvironmentalBusiness Environmental
SScanningcanning
PUTTU GURU PRASAD
M.Com. M.B.A., L.L.B., M.Phil. PGDFTM, APSET.
ICFAI TMF, (PhD) at JNTU K,
Asst.Professor
S&H Department

2. Business EnvironmentalBusiness Environmental
SScanningcanning
Professor, Lawyer & EntrepreneurProfessor, Lawyer & Entrepreneur
Puttu GuruprasadPuttu Guruprasad

5. EnvironmentalEnvironmental scanningscanning
EnvironmentalEnvironmental scanningscanning isis aa
processprocess ofof
gathering,gathering, analyzing,analyzing, andand
dispensingdispensing informationinformation forfor
tacticaltactical oror strategicstrategic purposes.purposes.
TheThe environmentalenvironmental scanningscanning
processprocess entailsentails obtainingobtaining bothboth
factualfactual andand subjectivesubjective informationinformation
onon thethe businessbusiness environmentsenvironments inin

6. KindsKinds ofof environmentalenvironmental scanningscanning
Ad-hocAd-hoc scanningscanning - Short term, infrequent
examinations usually initiated by a crisis
RegularRegular scanningscanning - Studies done on a regular
schedule (e.g. once a year)
ContinuousContinuous scanningscanning (also(also calledcalled continuouscontinuous
learning)learning) - continuous structured data
collection and processing on a broad range of
environmental factors

7. Environmental scanning usually refers just to the
macro environment, but it can also include industry,
competitor analysis, marketing research (consumer
analysis), new product development (product
innovations) or the company's internal
environment.

8. EnvironmentalEnvironmental scanningscanning
External analysis Internal analysis
Macro environment Micro environment
PEST analysis Five force analysis

9. A scan of the external macro-environment in
which the firm operates can be expressed in
terms of the following factors:
Political Economic Social Technological
The acronym PEST (or sometimes rearranged as
"STEP") is used to describe a framework for the
analysis of these macro environmental factors.
PPoliticalolitical EEconomicconomic SSocialocial TTechnological - PESTechnological - PEST

10. PoliticalPolitical FactorsFactors :-Political factors include
government regulations and legal issues and define
both formal and informal rules under which the firm
must operate. Some examples include:
tax policy
employment laws
environmental regulations
trade restrictions and tariffs
political stability

11. Economic Factors :-
Economic factors affect the purchasing
power of potential customers and the firm's
cost of capital. The following are examples
of factors in the macro economy:
economic growth
interest rates
exchange rates
inflation rate

12. Social Factors
Social factors include the demographic and
cultural aspects of the external macro
environment. These factors affect customer
needs and the size of potential markets.
Some social factors include:
health consciousness
population growth rate
age distribution
emphasis on safety

13. Technological Factors :-
Technological factors can lower barriers to
entry, reduce minimum efficient production
levels, and influence outsourcing decisions.
Some technological factors include:
R&D activity
Automation
technology incentives
rate of technological change

14. Five force analysisFive force analysis
• Threat Of New Entrants
• Threat Of Substitutes
• Bargaining Power Of Buyers
• Bargaining Power Of
Suppliers
• Rivalry Among Existing Firms

15. EnvironmentalEnvironmental SScanningcanning
Macro environmental and industry
scanning are useful as they reveal current
conditions of market.
It help managers to predict the future
characteristics of the organizational
environment and hence make decisions
today that will help the firm deal with the
environment of tomorrow

16. Thank You