enviromental forces environmental scanning and business environment

1. ENVIRONMENTAL FORCES,
ENVIRONMENTAL
SCANNING, AND BUSINESS
ENVIRONMENT

2. OBJECTIVES
• At the end of the lesson, the learners are
expected to:
• K: identify various forces/elements of the
firm’s environment and summarize these
forces using the PEST and SWOT analysis;
• S: describe the local and international
business environment of the firm; and
• A: appreciate the importance of analyzing
various forces/elements of the business
environment using PEST and SWOT
strategies.

3. DEFINITION OF TERMS
Environmental scanning – seeking for and sorting
through data about the enviroment.
Inflation – a period of above normal general price
increases, as reflected in the consumer and wholesale
price index.

4. • inflation rate – rate reflected during a period of above
normal general price increases.
• Interest rates – the total amount that a borrower must pay
annually to the lender and above the total amount borrowed.

5. •Changing options – the consumers change in
preference of goods and
•services offered
•Gross National Product (GNP) – total domestic and
foreign output
•claimed by the residents of a country
•Gross Domestic Product (GDP) – total final output
of goods and services
•produced by the country’s economy, within the
country’s territoryhe country’s territory.

6. • DISCUSSION
• Environmental Forces and Environmental Scanning
• Business environment refers to the factors or elements
affecting a
• business organization. It may be divided into External and
Internal
• Business Environments. . The External Business
Environment includes.
• factors and elements outside the organization which may
affect its performances.

7. Components of the External Business Environment:
General and Specific
Systematic monitoring of the major external forces
influencing
organizations is necessary to improve the management
of companies.
Failure to consider a company’s general and specific
business environments may affect the strategies that
management will make
and use.

8. Components of the Internal Business
Environment
An organization’s internal business
environment is composed of its resources,
research and development, production,
procurement of supplies, and the products
and the products and services it offers.
The organization’s internal environment
must also be subjected to internal analyses.

9. • Components of Environmental Scanning: Developing a
Competitive Mindset, Considering Future Business
Scenarios, Business Prediction, SWOT Analysis, and
Benchmarking Adapting to environmental uncertainties
must start with developing a competitive mindset.
Ignorance of present-day realities may cause individuals or
organizations to do certain things that may regret in the
future; hence, environmental scanning is necessary.

10. • The Local and International Business Environment of the
Firm Understanding the local and international business
environment of the firm requires managers of organizations
to sharpen their cultural intelligence. Cultural intelligence is
an individual’s ability to favorably receive and adjust to an
unfamiliar way of doing things.

11. • Power Distance – the degree to which a society accepts or
rejects the unequal distribution of power among people in
organizations and the institutions of society.

12. • Uncertainty Avoidance – the degree to which society is
uncomfortable with risk.

13. • Individualism-Collectivism – the degree to which a society
emphasizes individual accomplishments.

14. • Masculinity-Femininity – the degree to which a society
values assertiveness and feelings of material success versus
concern for relationships.

15. • Time Orientation – the degree to which a society
emphasizes short-term thinking versus greater concern for
the future or long-term thinking. Time Orientation – the
degree to which a society emphasizes
• short-term thinking versus greater concern for the future or
long-term thinking.

16. What is PEST Analysis
• PEST Analysis is a strategic framework used to evaluate the
external environment for a business by breaking down
opportunities and threats into Political, Economic, Social,
and Technological factors. PEST analysis can be an effective
framework to use in Corporate Strategy Planning. useful in
identifying the pros and cons of a Business Strategy.