environmentalscanning

8/7/2019 EnvironmentalScanning

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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



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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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` 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.


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