Environmental

Analysis
&
Forecasting

Chapter 2,
Business Environment,
Francis Cherunilam
ENVIRONMENTAL
ANALYSIS
 Managers are responsible for the success of an
organization and concerned about the effect that
factors in the external environment have upon it.

 They cannot control the external environment much

but they need to identify, evaluate and react to those
forces outside the organization which may affect
them.

 The way in which managers attempt to achieve this

is by means of a qualitative assessment of signals
they receive which are relative to outside influences.
There is therefore a need to carry out an analysis of
these forces by various means and this is called the
environmental analysis.
Scenario Building
Methods
 Premising Method
 Systems Diagram method
 Critical Site Method
 Newspaper Headline method
 Logical Possibilities Method
Benefits of Environmental
Analysis & Forecasting
 To identify the future THREATS &
OPPORTUNITIES
 To observe more closely the factors which
influence the business (ex the GROWTH
model)
 To keep a more closer eye on transformations
in the industry environment (Ford, Textiles)
 To observe more minutely the technological
developments (Use of MIS in the malls)
 To identify the Risk
 To formulate & modulate the strategies