Environmental Analysis

1. Environmental Analysis
Dr. Gopal Thapa
Associate Professor
Tribhuvan University

2. Environmental Analysis
 Environmental analysis is the process of assessing
the emerging trends.
 Philip Kotler
 Three types of emerging trends
 Fad
 Trend
 Mega trend
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3. Environmental Analysis
 Environmental analysis involves identifying the
present and future opportunities and threats to and
from the firm’s principal constituents/
stakeholders along the dimensions pf the firm’s
economic, political, legal, technological and social
environments.
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4. Process of Environmental Analysis
 Scanning
 Monitoring
 Forecasting
 Assessment
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5. Environment Scanning
 Environmental scanning involves monitoring
changes and developments in the environment that
have potential impact on the business of an
organization
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6. Methods of Scanning
 Extrapolations method
 History analogy
 Intuitive reasoning
 Scenario building
 Cross impact matrix
 Network methods
 Model building
 Delphi technique
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7. Variables Considered for Scanning
 Changes in macro environment
 Changes in market
 Nature of competition
 Customer needs
 Product offerings
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8. Types of Scanning
 Concentrated
 Comprehensive
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9. Process of Scanning
 Identify relevant forces in environment (PEST)
 Determine sources of observation
 Selecting scanning methods
 Scan and respond to data
 Events
 Trends
 Expectations
 Issues
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10. Monitoring
 It involves tracking trends and events
 It is auditing of environmental influences
 It includes:
 Specific description of environmental trends and
events
 Identification of trends and events for further
monitoring
 Identification of areas of forecasting
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11. Forecasting
 It is related with estimation of future situation
 It focuses on what is likely to happen
 It involves
 Identification of key forces
 Understanding of the nature of key influences and
drivers of change
 Projection of future alternative paths available
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12. Assessment
 It identifies key opportunities and threats
 Competitive position is analyzed –
 i.e. how the organizations stands in relation to
other organization competing for same resources
or consumers
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13. Models of Environmental
Analysis(Proposed by Johnson and Scholes)
 PEST model
 PESTEL model
 Porter’ model
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14. PEST Model
 Political –legal forces
 Economic forces
 Socio-cultural forces
 Technological forces
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15. PESTEL Model
 Political factors
 Economic factors
 Socio- cultural factors
 Environmental factors
 Legal factors
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16. Porters’ Model
 Competitive rivalry
 Threats of Entry
 The power of suppliers
 The power of customers
 The threat of substitute products
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17. Business Environment Analysis for
Strategic Management
 Environmental analysis
 Strategic choice
 Strategy formulation
 Strategic implementation
 Strategic control
 Feedback
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18. Emerging Business Environment
in Nepal
 Emergence of open market economy
 Increasing role of private sectors
 Private sectors’ investment in infrastructure
development
 Increasing multinational companies
 Development of information technology
 Increased consumerism
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19. Recent Trends & Emerging
Business Environment in Nepal
 Growth of service sector
 Changing socio-cultural values
 Rising consumer awareness
 Work force diversity
 Rise in online business
 Use of social media
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20. Any Queries?

 Thank you
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