envrnmnt scan tech
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ENVIRONMENTENVIRONMENTSCANNING TECHNIQUESSCANNING TECHNIQUES
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Environmental Scanning & MonitoringEnvironmental Scanning & Monitoring
y Environmental scanning is a concept from business
management by which businesses gather information from the
environment, to better achieve a sustainable competitive
advantage.
y To sustain competitive advantage the company must also
respond to the information gathered from environmental
scanning by altering its strategies and plans when the need
arises.
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Environmental Scanning & MonitoringEnvironmental Scanning & Monitoring--
TechniquesTechniquesSWOT
TechniquesPEST QUEST
Industry Analysis Competitor Analysis
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SWOT AnalysisSWOT Analysis
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SWOT SWOT
(Strength(Strength--WeaknessWeakness--Opportunity Opportunity--Threat Threat ) )
Identification of threats and Opportunities in
the environment (External) and strengths and
Weaknesses of the firm (Internal) is the
cornerstone of business policy formulation; it
is these factors which determine the course of
action to ensure the survival and growth of the
firm.
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SWOT: Studying Internal & SWOT: Studying Internal & External EnvironmentExternal Environment
The aim of any SWOT analysis is to identify the key internal and
external factors that are important to achieving the objective.
SWOT analysis groups key pieces of information into two
main categories:
Internal factors ± The strengths and weaknesses
internal to the organization.
External factors ± The opportunities and threats
presented by the external environment.
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Strengths and Weaknesses Opportunities and Threats
Resources: financial,
intellectual, location
Creativity / ability to develop
new products
Valuable intangible assets:intellectual capital
Competitive capabilities
Takeovers Market Trends Economic condition
Mergers
Joint ventures Strategic alliances Expectations of stakeholders Technology Public expectations
Competitors and competitiveactions
Global Markets Environmental conditions
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Uses of SWOT AnalysisUses of SWOT Analysis
y Corporate planning
y
Set objectives ± defining what the organisation is intendingto do
y Environmental scanning
Internal appraisals of the organisations SWOT, this needs to
include an assessment of the present situation as well as a
portfolio of products/services and an analysis of the
product/service life cycle
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y Establish critical success factors ± the achievement of
objectives and strategy implementation
y Preparation of operational, resource, projects plans for strategy implementation
y Monitoring results ± mapping against plans, taking
corrective action which may mean amendingobjectives/strategies.
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PEST ANALYSIS PEST ANALYSIS
A scan of the external macro-environment in which thefirm operates can be expressed in terms of the followingfactors:
Political Economic Social Technological
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y The acronym PEST (or sometimes rearranged as
"STEP") is used to describe a framework for the
analysis of these macroenvironmental factors. A PEST
analysis fits into an overall environmental scan as
shown in the following diagram:Environmental Scan
/ \
External Analysis Internal Analysis
/ \
Macroenvironment Microenvironment
|
P.E.S.T.
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Political Factors Economic Factors
tax policy
employment laws
environmental
regulations
trade restrictions and
tariffs
political stability
economic growth
interest rates
exchange rates
inflation rate
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Social Factors Technological Factors
health consciousness
population growth rate
age distribution
career attitudes
emphasis on safety
R&D activity
automation
technology incentives
rate of technological
change
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Competitive Analysis: Porter¶s Five Forces Model Competitive Analysis: Porter¶s Five Forces Model ::
y According to Porter,the nature of competitiveness in given
industry can be viewed as a composite of five forces:
o Rivalry among competitive firms
o Potential entry of new competitors
o Potential development of substitute products
o Bargaining power of suppliers
o Bargaining power of consumers
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Use of the Information from FiveUse of the Information from FiveForces AnalysisForces Analysis
Five Forces Analysis can provide valuable information for
three aspects of corporate planning:
o Statical Analysis
o Dynamical Analysis
o Analysis of Options
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QUESTQUEST
The Quick Environmental Scanning Technique,is a
scanning procedure designed to assist executives and
planners to keep uptodate of change and its
implications for the organizational strategies and
policies.
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The procedure permits administrators and top executives to
share their views and to develop a shared understanding
of high priority issues, future options and eventualities
which have implications to the institution. QUEST
produces
a) broad and comprehensive analysis of the external
environment and
b) analysis and assessment of the institutions capacity and
strategic options for dealing with the external
environment.
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The QUEST procedure involves four stages. These are:
a) preparation,
b) environmental scanning workshop,
c) intermediate analysis and report,
d) strategic options workshop and follow-up.
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y Preparation:involves four specific tasks.
o definition of the strategic issue,
o selection of participants (usually between twelve and
fifteen members),
o preparation of a notebook which contains information
on the major environmental trends and events which
are pertinent to the institution, and
o selection of suitable distraction-free sites for the
QUEST workshop.
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y Environmental Scanning Workshop:
Following the preparation phase, an all-day workshop is
organized to discuss the strategic environment in
which the institution operates.
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y Intermediate Analysis and Report:
The results are summarized in a written report.
The brief report is presented in two sections with the
first part dealing with the institution's mission,
purposes,objectives, stakeholders, and the second
part presenting alternative scenarios describing the
external environments which the institution may facein the interested future.
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y Strategic Options Workshop and Follow-up:
The final QUEST step is to hold a strategy meeting,
usually for about half a day, to discuss the report and
the strategic options open to the organization.
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Preparing ETOP Preparing ETOP
Environmental threat and opportunity profile is referred as
ETOP profile. It identifies the relevant environmental factors.
Such factors might be general environmental factors and
task environment factors. Thereafter, it is necessary to
identify their nature. Some factors are positive to the
organization whereas others are negative. Therefore, it is
necessary to find out their impact to the organization.
Positive, neutral, and negative sign in ETOP denotes the
relevant impact of environmental factor s.
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y Environmental threats and opportunities profile
(ETOP) is a commonly used profile related to external
business environment.
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