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November 2008Dr. Roopali Srivastava
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Jan 2011Dr. Roopali Srivastava
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` The dictionary meaning is to look carefully into or
to examine.
` The term environmental scanning in businessmeans to carefully analyze the various factors
influencing the business.
` The process of collecting, analyzing, and
distributing information for tactical andstrategic purposes
November 2008Dr. Roopali Srivastava
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November 2008Dr. Roopali Srivastava
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November 2008Dr. Roopali Srivastava
Ad Hoc Periodic Continuous
General
Character-
istics
Usually performed in response
to crisis
Not as in-depth
Forecasts are more short-term
Tied to planning cycle
(e.g., every 3 years)
In-depth
Forecasts 5 to 10 years
Also called Continuous Learning
Structured, in-depth data collection
and analyses by dedicated staff
Data gathered is more
comprehensive
Pr
Allows for quicker turn-around ofscan results
Predictable frequency
allows for appropriate
budget planning Frequency provides timely
information gathering for
planning
Dedication of time by researchers
allows incorporation of data from
more sources
Provides planners with more
comprehensive information
Informs planners of critical changes
sooner
Cons
Data can be more superficial
Results may address immediate
issues, but are less
generalizable
If only conducted in response to
crises, indicates lack of
organized institutional planning
efforts
Reaction to unforeseen
changes in environment(e.g., onset of recession)
may require Ad Hoc scan
to supplement information.
Requires ongoing institutional
commitment of resources (funding
and time)
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` Effective utilization ofresource :All this evolves the evaluation of
the companys strength & weaknesses in the light of the
environmental threats & opportunities & give the measures to
harness the opportunities or to compact the threat.` Help in converting threats into opportunities
` Strategic management starts with environmental scanning
` Constant monitoring of the environment : E.S provides clear cut
idea about the existing environment. Without it ,it would not be
possible to know the change in consumers taste & preferences,competitors& latest policy development .
` Useful for the manager.
` Prediction offuture
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` Often refers only to the environment that is
external to the organization
(also called th
e macroenvironment)
` Good strategic planning requires information on
internal organizational factors, so whenever
possible include th
ese also
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November 2008Dr. Roopali Srivastava
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` One cycle in the strategic planning process
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` The absence of certain strengths or capabilities
that are needed to move the organization forward
` Lack of marketing expertise.
` Undifferentiated products (i.e. in relation to yourcompetitors).
` Location of your business.
` Poor quality goods .
` Damaged reputation.
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` May be identified by asking questions: Why does business do well?
What do we do less well?
In what areas is business healthy & robust?
In what areas is business weak or struggling?
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` May be identified by asking questions: ? What resources can we call upon?
How do these resources compare with our needs?
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` Chances for growth or positive change in direction
revealed by changes or trends in the external
environment
` A developing market such as the Internet.` Mergers, joint ventures or strategic alliances.
` Moving into new market segments that offer
improved profits.
` A new international market.` A market vacated by an ineffective competitor.
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` Are identified by looking beyond the boundaries of
the organization
` Questions might include the following:
What are the external trends that will affect us? How? What is changing in our communities that will affect us?
How?
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` Questions might include the following: What are the needs in the external environment that
could be met by deploying the strengths of business and
its members?
Do any of our weaknesses make us particularly
vulnerable to a changing environment?
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` S-O strategies are strategies that build on
organizational strengths and resources to pursue
opportunities
` W-O strategies require the organization toovercome weakness to pursue opportunities
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` S-T strategies utilize the organizations strengths
to overcome external threats
` S-W strategies create a defensive plan to keep an
organizations weakness from making itsusceptible to external threats
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` Be realistic about businesss strengths &weaknesses Not too modest, not overly critical
` Seek a balance between strengths & weaknesses
` Distinguish between where is business today andcouldbe tomorrow
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` Look at business in relation to competing(external) organizations & interests
` Be as specific as you can Avoid fuzziness or shades of gray in this analysis
` Keep it short & simple. Dont over-analyze
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` The aim is not to identify every factor affecting
businesss future Identify key factors
A good target would be 10 factors in each of the four
areas
` Remember that SWOT is subjective There is no right or wrong answers
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` The underlying purpose is to develop strategies
that ensure the best alignment between the
external environment (opportunities & threats) and
th
e internal environment (strength
s &weaknesses)
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` A SWOT exercise is a valuable way of obtaining
observations and predictions from a group of
knowledgeable and involved participants during
th
e planning process
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` Be realistic about the strengths and weaknesses
of your organization wh
en conducting SW
OTanalysis.
` SWOT analysis should distinguish between where
your organization is today, and where it could be
in th
e future.` SWOT should always be specific.
` Always apply SWOT in relation to your
competition i.e. better than or worse than your
competition.` Keep your SWOT short and simple. Avoid
complexity and over analysis
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` Depends Type of scan (Ad hoc, Periodic, Continuous)
Your institutions relationship to its service area
How the scan information will be used
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` Rate factors on two dimensions: Potential impact on your institution
Probability of occurrence
` Look for changes in current trends
` Look for potential interaction effects between
factors.
November 2008Dr. Roopali Srivastava