The document discusses various tools and approaches for conducting environmental scanning, which is important for businesses to understand factors in their external environment that could impact their operations. It describes PESTEL analysis, which examines political, economic, social, technological, ecological and legal forces. A PESTEL analysis template is provided. Additionally, it outlines Porter's Five Forces framework for industry analysis, and provides examples of how to construct an environmental forces matrix and competitive forces matrix to assess threats and opportunities from external factors. Internal scanning tools like SWOT analysis and BCG matrix are also overviewed.

1. ENVIRONMENTAL
SCANNING:

2. CONNECTING THE
DOTS…….
•The business firms operates in a
business environment that contains
factors and elements that may have
adverse effects on the business if they
are not properly addressed.

3. WHAT IS ENVIRONMENTAL SCANNING?
• refers to the gathering, critical evaluation, and
utilization of information on events and
activities and their relationships with the
physical, societal, and industry environment.
•This includes the different forces existing
in every environmental later that have a
direct and indirect effects on the
entrepreneurial venture.

4. IMPORTANCE OF ENVIRONMENTAL
SCANNING:
• It clearly portrays the trend, activities and
developments happening in every layers of
the business environment. This also includes
the interrelatedness of the relationships
between and among these various forces in
the environment
•It identifies the expected threats
and opportunities existing in the
environment

5. IMPORTANCE OF ENVIRONMENTAL
SCANNING:
•It points out the possible factors that
will determine the success of the
entrepreneurial venture.
•It help define the future path of
the business
•It assists in the formulation of
the most appropriate

6. ENVIRONMENTAL SCANNING
APPROACH

7. SOCIETAL ENVIRONMENT
SCANNING APPROACH
• the different layers of the external
environment or macro environment
(physical, societal, industry) and the forces
comprising each environmental layers are
interrelated.
• They do not operate independently
• the process of conducting an evaluation and
analysis, the particular environmental layer
has an influence or impact on another

8. PESTEL ANALYSIS

9. WHAT IS P.E.S.T.E.L
ANALYSIS?
•is a tabular framework of the trends
and developments in the different
forces in the external environment
•stands for Political, Economic,
Sociocultural, Technological,
Ecological and Legal Forces

10. WHAT IS P.E.S.T.E.L
ANALYSIS?
•is considered to be the most
commonly used
environmental scanning tool
today.
•though not a perfect tool in
itself, it is considered the most
appropriate tool because of its

11. SEVERAL VARIATIONS IN THE PESTEL
ANALYSIS
•PEST analysis which disregards the
ecological and legal forces
•STEEPLE analysis which ethics is
added as an additional factor
•STEEPLED which is similar to STEEPLE
but added demographic factor

12. HOW TO DO IT..
• The emphasis of the evaluation tool is the
analysis of trends and development existing in
the external environment.
• The point of view to assume is that of the
business itself and not other business from
different industry.
• The emphasis may also change depending on
the nature of the business.

13. Political
Forces
Economi
c Forces
Sociocultura
l Forces
Technologic
al Forces
Ecological
Forces
Legal
Forces
Instability of
the
Philippine
Government
High
interest
rates
given by
commerci
al banks
Low
level of
literacy
rates
High
speed
internet
connectivi
ty
Abundant
source of
raw
materials
Frequently
change tax
laws
PESTEL ANALYSIS
TEMPLATE

14. •There are no strict rules as
to the presentation or
conduct of the PESTEL
Framework.
•The framework can be
modified based on the
business venture one wants
to pursue

15. ENVIRONMENTAL FORCES
MATRIX

16. •This aspect of the PESTEL Model can
be supplement by the Environmental
•The PESTEL tabular framework simply list
down trends and development in the
different environment forces that have
effect on business.
•It does not represent frequency of
occurrence on a particular
environment and the degree of its
impact to the business

17. ENVIRONMENTAL FORCES
MATRIX
•is a modified version of the issue priority
matrix (Wheleen and Hunger)
•classifies the environmental forces into
their frequency and level of effect to the
existing or proposed ventures
•the type of rating used for this matrix is
high, moderate, low

18. ENVIRONMENTAL FORCES
MATRIX
•In the process of evaluating the
different environmental forces, ,
the entrepreneur must give
preferential attention to the
forces that have high frequencies
and effect or those considered
high environmental forces.

19. Level of Effect on Entrepreneurial Venture
Frequency
of
Occurrence
High Moderate Low
High High
Environmental
Force
High
Environmental
Force
Moderate
Environmental
Forces
Moderat
e
High
Environmental
Force
Moderate
Environmental
Forces
Low
Environmental
Forces
Low Moderate
Environmental
Forces
Low
Environmental
Forces
Low
Environmental
Forces

20. LET’S ILLUSTRATE
Political
Forces
Economic
Forces
Sociocultu
ral Forces
Technolo
gical
Forces
Ecological
Forces
Legal Forces
Election is
upcoming in
the
Philippines
Many
people
have lost
income/job
High
Literacy
Rate
High
speed
internet
connectivi
ty
New
environmenta
l law banning
use of plastic
Imposition of
Health
Protocols

21. Level of Effect on Entrepreneurial Venture
Frequency
of
Occurrence
High Moderate Low
High Many people have lost
income/job
Imposition of Health
Protocols
High speed
internet
connectivity
Moderate
New environmental law
banning use of plastic
High Literacy Rate
Low Election is
upcoming in the
Philippines

22. INDUSTRY ANALYSIS SCANNING
TOOL
•The different forces in the industry
environment of the business must be
evaluated since they will either become a
catalyst for growth in business or the
cause of its failure.
•The primary objective in scanning the
industry environment is to determine the
strategic position of the business.

23. ANALYTICAL TOOL USE TO SCAN
INDUSTRY ANALYSIS TOOL
•SWOT Model
•Forces of Competition
Model
•Competitive Forces
Matrix

24. FORCES OF
COMPETITION MODEL

25. •This model was popularize by Michael
Porter, a prominent figure in
competitive strategy formulation.
•this is also known as FIVE
FORCES OF COMPETITION.

26. •the industry environment is a
competitive environment, therefore
the business have no choice but to
compete.
•through this model, the
business must determine that
intensity of competition within
its industry environment

27. •the level of intensity is primarily
dependent on the competitive
forces that exist within the
industry.
•the long term survival of the
business is measured by its
successful efforts against the
competitive forces.

28. •In the revision of the model, Porter
added Other stakeholders, that
includes labor unions, government,
trade association, and other special
interest groups.
•All the competitive forces are all
threats to the profitability,
growth, and survival of the

29. 5 FORCES COMPETING WITHIN
THE INDUSTRY:
•Potential new entrants
•Buyer
•Substitute Products
•Suppliers
•Rivalry among existing firms

31. COMPETITIVE FORCES
MATRIX
•is a tool that entrepreneurs can utilized to
provide total overview of the respective
competition in the industry where the
business will operate.
•The possible intensity and effect of
the threat of the competitive forces
can be high, moderate, or low.

32. Five Competing
Forces
Barriers to the
Forces
Effects of the
Barrier to the
force (High,
Medium, Low)
Effects of Threats to the Business
High Medium Low
Potential New
Entrants
Bargaining power of
the Buyers
Bargaining Powers
of the Supplier
Threat of the
Substitute products
Rivalry Among
existing firms

33. •the barriers to the competitive force to
be considered in determining the
degree of the threat as high or low.
•the relationship between the
barriers and the threat are
inverse in nature.
•If the potential barrier to the
competitive forces is high, then the

34. •Once the threat is low, it
will have a low effect on
the business.
•A week competing force
may not adversely affect
the business.

35. BARRIERS TO THE FIVE FORCES OF
COMPETITION
• New Entrant- potential new players in the
industry or the field of business. It is a threat
in the business because they become part of
the competition.
Intensity of new entrants can be affected by the following:
1. Strict government policy
2. Substantial capital requirement
3. Economies of Scale
4. High cost of product differentiation
5. High switching cost
6. Difficulty in accessing distribution channels

36. BARRIERS TO THE FIVE FORCES OF
COMPETITION
•Buyers- they represent the recipient of the
business’s products and services. This possess
strong and magnified bargaining power in the
industry.
The threat of its bargaining power will be less due to the following
factors:
• buyer has the potential for backward integration
• The cost of switching the supplier cost is minimal
• The buyer purchases large portion of the seller’s product or
services

37. BARRIERS TO THE FIVE FORCES OF
COMPETITION
•Suppliers
The threat of its bargaining power will be strong
if the following holds true:
• The product or service is unique
• The switching cost is high
• Suppliers in the industry are few, but the sales
volume is high
• Substitute products are not readily available
• The supplier has the availability for forward
integration.

38. BARRIERS TO THE FIVE FORCES OF
COMPETITION
•Rivalry Among existing firms
The intensity among rival firms can be attributed to
the following:
• Number of competing firms
• Rate of Industry Growth
• Characteristics of the Products and Services
• Amount of Fixed Cost
• Increased Capacity
• Diversity of Rival

39. BARRIERS TO THE FIVE FORCES OF
COMPETITION
•Substitute Products
The threat of substitute product can pose great
threats in the industry if the following factors are
present:
• The price of the substitute product is
substantially lower.
• Preference and tastes of customers easily
changes
• The Quality of Substitute products

40. Five
Competing
Forces
Barriers to
the Forces
Effects of the
Barrier to the
force (High,
Medium, Low)
Effects of Threats to the Business
High Medium Low
Potential
New
Entrants
Capitalization on
my chosen
business is low
Government
regulation is loose
Low
Low
XXX
XXX
Bargaining
power of the
Buyers
There are several
alternatives in the
market
Low XXX
Bargaining
Powers of the
Supplier
There are a lot of
suppliers in the
market
High XXX
Threat of the
Substitute
products
There are few
substitute products,
however preference
for my product is
Moderat
e
XXX

41. •The next step is to determine the
strategy to ensure competitiveness
and survivability of the venture.

42. INTERNAL ENVIRONMENT SCANNING
TOOLS
•The following are analysis tool that
can be used to analyze the internal
environment of the business:
•SWOT ANALYSIS
•BCG ANALYSIS

43. SWOT ANALYSIS

44. •is an environmental analysis tool
pioneered by George Albert Smith Jr
and Roland Christensen, professors of
Harvard Business School
•It is a popular tool that evaluates the
internal environment for Strengths,
Weakness, Opportunities and Threats
of the firm.
•sometimes referred to as TOWS

45. •In conducting SWOT analysis, one
must list down factors that are
considered strengths, weaknesses,
opportunities and threats affecting
the business
•However, more than just jotting down the
strengths, weaknesses, opportunities and
threats, entrepreneurs must derived and
define concreted strategy to utilized these
information

46. •Strengths- refers to the strong
attributes or capabilities of the
business that provides great advantage
in exploiting an opportunity.
•Weaknesses- refers to the poor
attributes or deficiency that gives
disadvantages to the business.
•Noted: Both strengths and weaknesses
in the SWOT analysis are done within the
business firms and thus within the

47. Opportunities- refers to business situations in
the form of products and services that must be
exploited because of their potential terms of
profit and growth.
•Threats- are possible external events in
the environment that may provide harm
to the business.
•
•Note: both opportunities and
threats in SWOT are outside the
business environment.

48. Business
Strengths
Business Weaknesses Environmental
Opportunities
Environmental
Strengths
Complete and
new
processing
facilities
Unskilled workers
to handle new
technological
equipment
New Potential
consumers
Entry of new
competitors
BASIC SWOT TEMPLATE

49. Using SWOT analysis, the entrepreneurs therefore
must:
1.use the strengths to exploit the business
opportunities
2.improve the weaknesses to avoid the threats.

50. Strengths/Weaknesses
Opportunities and Threats
Business strengths
Complete and new processing
facilities
Business Weaknesses
Unskilled workers to handle new
technological equipment
Environmental
Opportunities
New Potential
consumers
(Opportunity Strength Strategy)
Use strengths to exploit or take
advantage of the business
opportunity.
(Opportunity Weakness Strategy)
Overcome or avoid weaknesses
by taking advantage of
opportunities
Environmental
Threats
Entry of new
competitors
(Threats Strength Strategy)
Use strengths to minimize or
avoid threats.
(Threats Weakness Strategy)
Minimize weaknesses to avoid
threat.

51. BCG ANALYSIS

52. BCG ANALYSIS
MATRIX
•is an internal analysis tool developed by the
BOSTON CONSULTING GROUP.
• This tool is used to analyze several products or
services that are produced or rendered by the
business
•It is also equally effective in analyzing the
product or service line of the business.
•The products are classified as stars,
question mark, cash cow and dogs.