Environmental Scanning

° Is the process of conducting research through surveys, observation and other

methods, and gathering and analyzing information for the organization.
° The external environment has two parts task and social environment

Task Environment

' Consists of those two aspects of

the organization that affect the
company itself.

' These factors are the stakeholders

such as community, creditors,
suppliers, customers, competitors
and other organizations.

Social Environment

° Includes the political, legal,

economic, socio cultural and
technological aspects.

Market Structure

1. Market Concentration- it is the degree by which a small number of

companies dominate a particular market.

' 2. Entry Barriers - this refer to the difficulties and challenges by

potential new entrants which are entering the
market.

' 3. Product Differentiation-this refers to the. degree by which a company is

able to distinguish its product or service to other
players in the market as valued customers.

SOCIAL ENVIRONmENT — includes the

political, legal, economic, sociocultural, and

technological aspects.

Political Environment — Consist of government

rules and regulations which the organizations follow.

These include taxes and licenses, political health and

sanitation, registration, among others.

Market Structure based on No. of Sellers in the

Market
' 1. Atomistic- there are many small sellers with a low level of interaction to
one another.
' 2. Oligopolistic-few large sellers have a high level of intemction \fith one
another.
’ 3. Monopoly- there is one seller who dominates the market.

' Homogenous Products

-highly identical

-n0t differentiated from one supplier

to another

Differrentiated Products

differentiated by design, quality,

branding, among others.

-they have certain features which

differentiate from ne another.

Market entry

° 1. Ease of Entry - no difficulties in entering the market.

° 2. Moderate Difficulty Entry- there are barriers but not too difficult for
sellers to monopolize the market.

' 3. Blockaded Entry - there are barriers that are too high which
potential players cannot enter.
The five forces model

Potential New Entent

Buyers

Substitutes

Suppliers

Industrial Competitors

Competitive Intelligence

’ Is the act of gathering, analyzing, and distributing vast information, coined as

intelligence about anything that would help competing in the market.
' \‘(kirks on the perfonnance of the following areas:
1 . Assessment of strategies
2. Perception of competitor strategies
3. Effectiveness of current operations
4. Capabilities of competitors
5. Long term market prospects

Approaches

' STRATEGIC INTELLIGENCE - is understanding the competitor’s future

prospects and goals. I
' TACTICAL INTELLIGENCE - is small scale intelligence and operational
in short run.
' COUNTER INTELLIGENCE - is knowing how to defend company
secrets.

SWOT ANALYSIS — takes note of the changes in the economic, political legal,
competitive, and sociocultural environment.
STRENGHTS- the company evaluates its
own strengths in terms of its own capabilities.
WEAKNESSES- to be customer focused , the weakfiesser.’
company minimizes actions that day drive 63““
away customers. a
OPPORTUNITIES- the company take
advantage of the possible opportunities that “v“
may further gain strong foothold in the . ofiu‘wfie—S
market
THREATS- the company is keen in looking at
possible threats and arresting them before
they become obvious.

``