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Business Environment
CA-IPCC

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Following is a sample excerpt from STRATEGIC MANAGEMENT - By CA K S Jolly
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TOPIC:
3.4 Why Environmental Analysis/Scanning?
Before an organization can begin strategy formulation, it must scan the external environment to identify possible
opportunities and threats and its internal environment for strengths and weaknesses.
The external environment consists of variables (Opportunities and Threats) that are outside the
organization and are not typically within the short-run control of top management.
The internal environment consists of variables (Strengths and Weaknesses) that are within the organization
itself and are not usually within the short-run control of top management.
Purpose of Environmental Scanning
1. Understand Environmental Changes: To provide an understanding of current and potential changes taking
place in business environment.
2. Identify Strategic Factors: To identify those variables that are most important to the organisations future
i.e. strategic factorsthose external and internal elements that will determine the future of the
organisation. (These strategic factors become inputs for strategic decision making)
3. Facilitate Strategic Thinking: To facilitate and foster strategic thinking in organization.





1
Business Environment
CA-IPCC

www.coursemateonline.com



+91 99887 12345