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env scan.pptx

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    Define the Environmental ScanningThe process of collecting, analyzing, and distributing information for tactical

    and strategic purposes

    According to Brown and Weiner (1985)

    Environmental Scanning is a kind of radar to scan the world

    systematically and signal the new, the unexpected, the major andminor.

    According to Aguilar (1967):

    In his study of the information gathering practices , defines scanning as the

    systematic collection of external information in order to

    1-lessen the randomness if information flowing into the organization.

    2-Provide early warning for managers of changing external

    Conditions

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    What is Environmental Scanning?

    Whether you are planning a trip, or an excursion to buy groceries, or the direction of acorporation, you need to consider the larger external environment.

    For example, you want to go grocery shopping in the next town. You'd like to get this

    done as quickly as possible. So, you turn on the radio to listen to the traffic report. Oops.

    There's been an accident on the highway you usually take to get to the store. What do

    you do? You plan to take an alternate route that will keep you out of the traffic jam.

    You've done a limited form of environmental scan.

    In terms of organizations and strategic planning, an environmental scan involves

    considering the factors that will influence the direction and goals of your organization.

    And, it includes consideration of both present and future factors that might affect theorganization, since, of course, we're planning for the future, not just the present.

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    What is Environmental Scanning?

    For example, an environmental scan might project that in the next ten years, thenumber of people (potential customers) between the ages of 18-24 will increasefrom 30% to 40%. That's important information if we want to decide what kindsof new products we might consider introducing into the marketplace. Should wework on developing products targeted at a dwindling seniors population? Orshould we develop products to take advantage of the shift to a youth dominatedmarket. The environmental scan forces us to look at these factors.

    While some suggest the environmental scan should address only factors externalto the organization (e.g. markets, legislation and government actions,demographics, marketing trends, etc), we suggest that you also do anINTERNAL ENVIRONMENTAL SCAN.

    An internal environmental scan involves looking at the present capabilities ofthe organization (infrastructure, hardware, personnel, abilities, structure, etc)and that information can be compared to what the organization WILL need inthe future to achieve its strategic goals

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    Objective of Environmental Scanning

    Identified the following objectives of an environmental Scanning system:

    Detecting scientific, technical, economic, social and political trends and

    events important to the business.

    Defining the potential threats, opportunity, or change for the business

    implied by those tends and events.

    Promoting a future orientation in the thinking of management and staff.

    Alerting management and staff to trends that are converging, diverging,speeding up, slow down, or interacting.

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    Modes Of Scanning:

    Systematic scanning Information related to markets and customers, changes in legislation,regulations having a direct impact on the organization's activities,government policy etc. are collected continuously by taking relevant factorsinto account

    Ad-hoc scanning Conducting special surveys and studies to deal with environmental issues from timeto time.

    Processed-form scanning

    sing information in a processed form available from different sources insideand outside the organization

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    Types of environmental scansAd 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

    Pros

    Allows for quicker turn-around of

    scan results

    Lower commitment of resources

    over time

    Predictable frequency allows

    for appropriate budgetplanning

    Frequency provides timely

    information gathering for

    planning

    Planning is proactive

    Dedication of time by researchers

    allows incorporation of data from more

    sources Provides planners with more

    comprehensive information

    Informs planners of critical changes

    sooner

    Plans can be adjusted or adopted more

    proactively

    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

    Planning response is reactive

    Reaction to unforeseen

    changes in environment (e.g.,

    onset of recession) may

    require Ad Hoc scan to

    supplement information.

    Planning response is then

    more reactive

    Requires ongoing institutional

    commitment of resources (funding,

    personnel, and time)

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    Macroenvironment: STEEP Socio-cultural

    Demographics

    population size and distribution

    age distribution

    education levels

    income levels

    race and ethnicity

    Socio-Cultural (continued) Attitudes about higher education

    Cultural shifts

    Technological New products and services training

    opportunities New manufacturing processes

    Infrastructure changes

    Economic Industry/career demand and decline

    Unemployment

    Inflation

    Environmental/Ecological New industry opportunities

    Political Political climate/stability

    State budget deficit or surplus

    Changes in legislation

    What to include in your scanMore things to consider including:

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    Environmental scanning refers to possession and utilization of

    information about occasions, patterns, trends, and relationships within

    an organizations internal and external environment.

    It helps the managers to decide the future path of the organization.Scanning must identify the threats and opportunities existing in the

    environment. While strategy formulation, an organization must take

    advantage of the opportunities and minimize the threats. A threat for one

    organization may be an opportunity for another.

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    Internal analysis of the environment

    Internal analysis of the environment is the first step of environment

    scanning. Organizations should observe the internal organizational

    environment. This includes employee interaction with other employees,

    employee interaction with management, manager interaction with other

    managers, and management interaction with shareholders, access to natural

    resources, brand awareness, organizational structure, main staff, operational

    potential, etc.

    Also, discussions, interviews, and surveys can be used to assess the internal

    environment. Analysis of internal environment helps in identifying

    strengths and weaknesses of an organization.

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    External Analysis of the Environment As business becomes more competitive, and there are rapid changes in the

    external environment, information from external environment adds crucialelements to the effectiveness of long-term plans.

    As environment is dynamic, it becomes essential to identify competitorsmoves and actions. Organizations have also to update the corecompetencies and internal environment as per external environment.

    Environmental factors are infinite, hence, organization should be agile andvigil to accept and adjust to the environmental changes.

    For instance - Monitoring might indicate that an original forecast of theprices of the raw materials that are involved in the product are no morecredible, which could imply the requirement for more focused scanning,forecasting and analysis to create a more trustworthy prediction about theinput costs. In a similar manner, there can be changes in factors such ascompetitors activities, technology, market tastes and preferences.

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    External Environment

    Demographics

    SocialChange

    EconomicConditions

    Political &Legal Factors

    Technology

    Competition

    EnvironmentalScanning

    Target Market

    ProductDistributionPromotion

    Price

    External Environmentis not controllable

    Ever-ChangingMarketplace

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    An environmental scan of todays marketplace

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    Environmental scanning is one of four activities comprising

    External analysis.

    As illustrated in Figure 1, external analysis is the broader activity ofunderstanding the changing external environment that may impact the

    organization.

    In describing external analysis, Fahey and Narayanan (1986) suggest that

    organizationsscan the environment to identify changing trends and patterns,

    monitorspecific trends and patterns, forecast the future direction of thesechanges and patterns, and assess their organizational impact.

    Internal analysis of the organization's vision, mission, strengths, and

    weaknesses, external analysis assists decision makers in formulating

    strategic directions and strategic plans. The goal of environmental scanning is to alert decision makers to potentially

    significant external changes before they crystallize so that decision makers

    have sufficient lead time to react to the change. Consequently, the scope of

    environmental scanning is broad.

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    What is environmental scanning?


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