The document discusses environmental analysis, which involves assessing emerging trends and identifying opportunities and threats from a firm's economic, political, legal, technological, and social environments. It describes the main processes of environmental analysis as scanning, monitoring, forecasting, and assessment. Scanning involves monitoring environmental changes that could impact a business. Monitoring tracks trends and events, while forecasting estimates future situations. Assessment identifies key opportunities and threats. The document also outlines several models for environmental analysis, including PEST, PESTEL, and Porter's models, which analyze political/legal, economic, socio-cultural, and technological forces.

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. Any Queries?

 Thank you
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