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Environmental scanning


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Environmental scanning

  1. 1. Environmental scanning<br />Environmental scanning is a process of gathering, analyzing, 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<br />
  2. 2. Kinds of environmental scanning<br />Ad-hoc scanning - Short term, infrequent examinations usually initiated by a crisis<br />Regular scanning - Studies done on a regular schedule (e.g. once a year)<br />Continuous scanning (also called continuous learning) - continuous structured data collection and processing on a broad range of environmental factors<br />
  3. 3. 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 the company's internal environment.<br />
  4. 4. Environmental scanning<br />External analysis<br />Internal analysis<br />Macro environment<br />Micro environment<br />PEST analysis<br />Five force analysis<br />
  5. 5. A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:<br />Political<br />Economic<br />Social<br />Technological<br />The acronym PEST (or sometimes rearranged as "STEP") is used to describe a framework for the analysis of these macro environmental factors.<br />
  6. 6. Political Factors:-Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:<br /><ul><li>tax policy
  7. 7. employment laws
  8. 8. environmental regulations
  9. 9. trade restrictions and tariffs
  10. 10. political stability</li></li></ul><li>Economic Factors :-Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in the macro economy:<br /><ul><li>economic growth
  11. 11. interest rates
  12. 12. exchange rates
  13. 13. inflation rate</li></li></ul><li>Social Factors<br />Social factors include the demographic and cultural aspects of the external macroenvironment. These factors affect customer needs and the size of potential markets. Some social factors include:<br /><ul><li>health consciousness
  14. 14. population growth rate
  15. 15. age distribution
  16. 16. emphasis on safety</li></ul>Technological Factors:-Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include:<br /><ul><li>R&D activity
  17. 17. Automation
  18. 18. technology incentives
  19. 19. rate of technological change</li></li></ul><li>Five force analysis<br />Threat Of New Entrants<br />Threat Of Substitutes<br />Bargaining Power Of Buyers<br />Bargaining Power Of Suppliers<br />Rivalry Among Existing Firms<br />
  20. 20. Why ?????????<br />Macro environmental and industry scanning are useful as they reveal current conditions of help managers to predict the future characteristics of the organizational environment and hence make decisions today that will help the firm deal with the environment of tomorrow<br />
  21. 21. Thank You<br />Presented by:<br />Rajesh Kumar<br />