Environmental Scanning process.

1. BUSINESS ENVIRONMENT
ENVIRONMENTAL SCANNING
BY SAG

2. Environmental scanning is a process of gathering,
analysing, 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 considering
entering.
WHAT IS ENVIRONMENTAL SCANNING?

3. Ad-hoc scanning – Short term, infrequent examinations usually initiated
by a crisis.
Regular scanning- Studies done on a regular schedule(e.g. once a year).
Continuous scanning-continuous structured data collection and
processing on a board range of environmental factors.
KINDS OF ENVIRONMENTAL SCANNING

4. 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 company’s internal

5. External analysis Internal analysis
Macroenvironment
PESTanalysis Fiveforceanalysis
Microenvironment
ENVIRONMENTAL SCANNING

6. 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 is used to describe a framework for the analysis of the
these macro environmental factors.
PEST
SOCIAL ECONOMIC
TECHNOLOGICAL
POLITICAL

7. 1.POLITICAL FACTORS:-
Political factors include government regulations and legal
issues and define both formal and informal rules under which the firm
must operate. Sum examples include;
Tax policy
Employment Laws
Environmental Regulations
Trade restrictions and tariffs
Political stability

8. 2.ECONOMIC FACTORS:
Economic factors effects the purchasing power of potential
customers and the firm’s cost of capital . The following are example of
factors of factors in the macro economy:
Economic Growth
Interest Rates
Exchange Rates
Inflation Rates

9. 3.SOCIAL FACTORS:
Social factors include the demographic and cultural aspects of the external
macro environment .These factors effect customer needs and the size of potential
market, some social factors include:
Health consciousness
Population growth rate
Age distribution
Emphasis on safety

10. 4.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

11. FIVE FORCES ANALYSIS
Threat of New Entrants
Threat of Substitutes
Bargaining Power of Buyers
Bargaining Power of suppliers
Rivalry Among existing Firms

12. WHY……………?
Macro environmental 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 decision today that will help
the firm deal with the environment of tomorrow.