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
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.