SAMPLE OF OPPORTUNITY ANALYSIS

OPPORTUNITY ANALYSIS
- refers to establishing demand and competitive analysis, and studying market conditions to
be able to have a clear vision and plan strategies accordingly. Opportunity analysis is a
vital process for the growth of an organization and needs to be performed frequently.

Example:
 Changes in technology and markets, eg the Internet.
 Changes in government policy or regulations / legislation.
 Local and global events.
 Potential new uses of products and / or services.
 Use of marketing or promotional techniques to boost the business.

a. Environmental scanning
 refers to the collection and utilization of information regarding events, relationships,
and trends in an organization's industry, and the use of the acquired knowledge in
shaping the organization's future strategies and objectives.
 requires people in an organization to search for opportunities, important lessons,
trends, and weaknesses or threats outside of their organization which can affect the
success of the company.

What is the purpose of Environmental Scanning?

- s important for a variety of reasons. It is the responsibility of company executives to keep tabs on
issues that have a direct impact on their customers and suppliers. They must also be aware of the
strengths and weaknesses of competitors, changes in regulatory standards, as well as
macroeconomic and political changes that can affect their company. The business landscape is highly
dynamic due to the rapid advancement in technological innovations. This makes it critical for
organizations to have an in-depth understanding of the market dynamics to create winning business
strategies. Businesses can prevent being left behind through consistent research and learning as well
as organization-wide knowledge sharing to keep everybody up to date on the most important industry
trends.

How Often Should Organizations Perform Environmental Scanning?

- The number of environmental scans a company should perform depends on its
needs. If an organization is active in a highly dynamic and technology-driven
environment, the company needs to consistently track trends and developments in its
industry and apply the results to develop improved strategies and processes.
However, organizations operating in less dynamic environments may only require
environmental scans once in a while.

What are the Areas Covered by Environmental Scanning?

- To survive, grow, and succeed in a highly competitive and constantly changing
commercial landscape, organizations must become adept at identifying and adapting
to the multiple challenges and opportunities in the industry. One of the best ways of
conducting a successful, result-oriented environmental scan requires assessment of
the factors listed below.

1. Economic conditions
2. Competition
 3. Global opportunities
4. Employment trends
5. Technological advancement
6. Industry
7. Geopolitical climate
8. Socio-cultural expectations

What are the Guidelines in Performing an Effective Environmental Scanning?

- the following highlights as essential to an effective environmental scan:
1. Deliberate data acquisition using market research studies.
2. Gaining insights through informal conversations with executives.
3. Gathering information through secondary sources such as magazines, newspapers,
journal literature and web articles.
4. Monitoring demographic data.
5. Setting up a benchmark of metrics that compare the organization or industry's
performance, finances and other vital variables to another organization or industry.

Example of Environmental Scanning

Here is an example of a company that is using environmental scanning to increase its
market reach and bottom-line.

PepsiCo has been able to successfully use its knowledge of the changing environment in the food and
beverage industry towards healthier and functional foods to increase its bottom-line and boost its footprint
in the environment. The long-term strategy of the company's CEO is to make Pepsi one of the biggest brands
in the nutrition business. To achieve this, the company has acquired Naked, a big name in the functional food
and beverage subsector and is increasing R&D to create healthier food ingredients that will be more
acceptable by an increasing health conscious buying public and regulatory agencies. Not many companies
have been able to adapt successfully as PepsiCo.

The Importance of Environmental Scanning

Environmental scanning offers many advantages to companies irrespective of their industry
or market environment. Here are some of the ways by which environmental scanning can
benefit an organization:
1. Environmental scanning allows an organization to have current information about its
external environment and develop coping strategies.

2. It enables companies to quickly identify and exploit opportunities before their

competitors, counter threats before they grow into bigger issues and also position the
company to meet the demand of the commercial landscape.

ENVIRONMENTAL ANALYSIS
- is a strategic tool. It is a process to identify all the external and internal elements,
which can affect the organization’s performance. The analysis entails assessing the
level of threat or opportunity the factors might present. These evaluations are later
translated into the decision-making process. The analysis helps align strategies with
the firm’s environment.

Our market is facing changes every day. Many new things develop over time and the whole
scenario can alter in only a few seconds. There are some factors that are beyond your
control. But, you can control a lot of these things.
Businesses are greatly influenced by their environment. All the situational factors which
determine day to day circumstances impact firms. So, businesses must constantly analyze
the trade environment and the market.

There are many strategic analysis tools that a firm can use, but some are more common.
The most used detailed analysis of the environment is the PESTLE analysis. This is a bird’s
eye view of the business conduct. Managers and strategy builders use this analysis to find
where their market currently. It also helps foresee where the organization will be in the
future.

PESTLE analysis consists of various factors that affect the business environment. Each
letter in the acronym signifies a set of factors. These factors can affect every industry
directly or indirectly.

The letters in PESTLE, also called PESTEL, denote the following things:
1. Political factors
2. Economic factors
3. Social factors
4. Technological factors
5. Legal factors
6. Environmental factor

P FOR POLITICAL FACTORS

The political factors take the country’s current political situation. It also reads the global political
condition’s effect on the country and business. When conducting this step, ask questions like “What
kind of government leadership is impacting decisions of the firm?”

Some political factors that you can study are:

1. Government policies
2. Taxes laws and tariff
3. Stability of government
4. Entry mode regulations

E FOR ECONOMIC FACTORS

Economic factors involve all the determinants of the economy and its state. These are
factors that can conclude the direction in which the economy might move. So, businesses
analyze this factor based on the environment. It helps to set up strategies in line with
changes.

Listed some determinants that you can assess to know how economic factors are affecting
the business below:
 The inflation rate
 The interest rate
 Disposable income of buyers
 Credit accessibility
 Unemployment rates
 The monetary or fiscal policies
 The foreign exchange rate
S FOR SOCIAL FACTORS
Countries vary from each other. Every country has a distinctive mindset. These attitudes
have an impact on the businesses. The social factors might ultimately affect the sales of
products and services.

Some of the social factors should study are:

 The cultural implications
 The gender and connected demographics
 The social lifestyles
 The domestic structures
 Educational levels
 Distribution of Wealth

T FOR TECHNOLOGICAL FACTORS

Technology is advancing continuously. The advancement is greatly influencing businesses.
Performing environmental analysis on these factors will help you stay up to date with the
changes. Technology alters every minute. This is why companies must stay connected all
the time. Firms should integrate when needed. Technological factors will help you know how
the consumers react to various trends.

Firms can use these factors for their benefit:

 New discoveries
 Rate of technological obsolescence
 Rate of technological advances
 Innovative technological platforms

L FOR LEGAL FACTORS

Legislative changes take place from time to time. Many of these changes affect the business
environment. If a regulatory body sets up a regulation for industries, for example, that law
would impact industries and business in that economy. So, businesses should also analyze
the legal developments in respective environments.

Legal factors you need to be aware of:

 Product regulations
 Employment regulations
 Competitive regulations
 Patent infringements
 Health and safety regulations

E FOR ENVIRONMENTAL FACTORS

The location influences business trades. Changes in climatic changes can affect the trade.
The consumer reactions to particular offering can also be an issue. This most often affects
agri-businesses.

Some environmental factors you can study are:

 Geographical location
 The climate and weather
 Waste disposal laws
 Energy consumption regulation
 People’s attitude towards the environment