CHALLENGES IN EXTERNAL AND INTERNAL ENVIRONMENT

ENVIRONMENTAL SCANNING
- THE STUDY AND INTERPRETATION OF THE FORCES EXISTING IN BOTH EXTERNAL AND
INTERNAL ENVIRONMENTS

MODES OF ENVIRONMENTAL SCANNING

1. UNDIRECTED VIEWING – SOURCES OF INFORMATION ARE WIDE-RANGING AND LARGE
CHUNKS OF INFORMATION ARE QUICKLY DROPPED FROM THE INDIVIDUAL’S ATTENTION
WITH NO SPECIFIC INFORMATIONAL NEED IN MIND
2. CONDITIONED VIEWING – A MERE VIEWING OF INFORMATION TO SPECIFIED FACTS AND
DATA TO ASSESS THE GENERAL IMPACT ON THE ORGANIZATION
3. INFORMAL SEARCH – ACTIVELY LOOKING FOR INFORMATION TO INCREASE KNOWLEDGE OF
A PARTICULAR ISSUE; RELATIVELY INVOLVES UNSTRUCTURED EFFORT
4. FORMAL SEARCH – FOCUSED AND STRUCTURED SEARCH; A RESEARCH METHODOLOGY IS
CLEARLY ENUMERATED AND FOLLOWED (EX. INDUSTRY ANALYSIS, MARKET STUDIES,
COMPETITOR AND CUSTOMER ANALYSES, ETC)

SWOT MATRIX ANALYSIS

❖ STRENGTHS – FEATURES THAT ORGANIZATIONS POSSESS THAT GIVE SIGNIFICANT
ADVANTAGE OVER OTHERS
❖ WEAKNESSES – CHARACTERISTICS THAT PLACE THE ORGANIZATIONS AT A DISADVANTAGE
RELATIVE TO OTHERS (I.E LIMITATIONS, VULNERABILITIES)
❖ OPPORTUNITIES – POSSIBILITIES IN THE EXTERNAL ENVIRONMENT THAT ORGANIZATIONS
CAN EXPLOIT TO THEIR ADVANTAGE
❖ THREATS – CHALLENGES IN EXTERNAL ENVIRONMENT THAT CAN CAUSE PROBLEMS TO
ORGANIZATIONS
CHALLENGES IN EXTERNAL ENVIRONMENT
PEST ANALYSIS:

P POLITICAL FORCES (POLITICAL INDEPENDENCE, TERRORISM, SUICIDE BOMBINGS, CHEMICAL

AND NUCLEAR THREATS, GLOBAL ALLIANCE)

E ECONOMIC FORCES (GLOBALIZATION, INCREASING OIL PRICES, ECONOMIC TRADE

AGREEMENTS, EMERGING MARKETS/ONLINE CUSTOMERS)

S SOCIAL FORCES (CHANGING SOCIAL STRUCTURE, CROSS CULTURAL DIVERSITY, SOPHISTICATED

LIFESTYLE OF PEOPLE, AGING POPULATION)

T TECHNOLOGICAL FORCES (E-BANKING, E-LEARNING, COMMUNICATION TECHNOLOGY, E-

COMMERCE, COMPUTER-INTEGRATED BUSINESS)

ADDITIONAL FORCE:

ENVIRONMENTAL FORCE (CLIMATE CHANGE, ENVIRONMENTAL WASTE MANAGEMENT,

PRESERVATION OF RAINFOREST AND MARINE LIFE)

CHALLENGES IN INTERNAL ENVIRONMENT

GOVERNMENT THE BUSINESS CARETAKER; IMPLEMENTS BUSINESS OPERATING GUIDELINES
AND REGULATES THE CONDUCT OF BUSINESS ACTIVITIES

CULTURE A COMMUNAL CONVERGENCE; PRACTICES WITHIN THE ORGANIZATION

(HOSPITALITY, BAYANIHAN, BEING POLITICALLY INVOLVED, ETC)

STAKEHOLDERS THE BUSINESS INVESTORS; LIFEBLOOD OF THE ORGANIZATION; INITIATE

BUSINESS OPERATIONS AND COMPETE AMONG THEMSELVES

COMPETITORS THE BUSINESS THREATS; ORGANIZATIONS/COMPANIES THAT OFFER AND

SELL PRODUCTS AND SERVICES (SAME/SIMILAR PRODUCTS/SERVICES,
SUBSTITUTE PRODUCTS, DIFFERENT PRODUCTS/SERVICES);
COMPLEMENTARY COMPETITORS, COLLABORATIVE COMPETITORS,
CORRUPTED COMPETITORS

WHO ARE YOUR COMPETITORS?

1. DETERMINE SIMILARITY IN CHARACTERISTICS

2. STUDY CONSUMERS, DEMOGRAPHICS, PSYCHOGRAPHIC VARIABLES
3. RESEARCH COMPANY DATA (COMPANY GROWTH, NUMBER OF YEARS IN
OPERATION, NUMBER OF CUSTOMERS)
4. CONSIDER CORPORATE SUCCESS (SALES VOLUME/AMOUNT, MARKET
LEADERSHIP, GOODWILL)
CUSTOMERS THE BUSINESS CHALLENGE; PRODUCTS AND SERVICES SHOULD PROVIDE:

LEVEL 1: CUSTOMER SATISFACTION CUSTOMER APPROVAL

THE PRODUCT FULFILLED ITS INTENDED USE AND ATTRACTED THE
CUSTOMERS

LEVEL 2: CUSTOMER DELIGHT CUSTOMER PATRONAGE

CUSTOMERS BECOME EXCITED OVER THE PRODUCTS AND SERVICES OFFERED
DUE TO QUALITY SERVICE, PRODUCT EXCELLENCE, PRODUCT VERSATILITY, OR
ANY ATTRIBUTE THAT GREATLY GRATIFY AND CREATE DISTINCT IMPACT ON
THEM

LEVEL 3: CUSTOMER INTIMACY CUSTOMER LOYALTY

RELATIONSHIP BETWEEN COMPANY AND CUSTOMERS BECOME WARM,
COMPLIMENTARY, SUPPORTIVE AND “BUSINESSLY PERSONAL”; CUSTOMERS
CONTINUE SUPPORTING THE PRODUCT/SERVICE ASIDE FROM BEING PLEASED
WITH THE PRODUCT/SERVICE

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

- INTERPLAY OF COMPANY, PRODUCT, CUSTOMERS
-TO ACHIEVE OPTIMUM LEVEL OF GAIN AND PATRONAGE, PRODUCTS
SHOULD BE COMPETITIVELY PRICED, OF GOOD QUALITY, ACCESSIBLE, AND
IDEALLY THE BEST
-COMPANIES DO THEIR PART IN SATISFYING CUSTOMER EXPECTATIONS AND
DELIGHTING THEM WITH QUALITY , INNOVATIONS AND PERSONALIZED
BUSINESS RELATIONSHIP

SUPPLIERS THE BUSINESS PARTNERS; RESPONSIBLE FOR THE QUALITY OF PRODUCTS

PRODUCED AND SERVICES RENDERED; AFFECTS CONTINUITY IN
OPERATIONAL PROCESS

JUST IN TIME (JIT) RELATIONSHIP – SUPPLIER IS ASSURED OF ORDERS WHILE

COMPANY IS ASSURED OF STOCK DELIVERY

COMMUNITY THE BUSINESS CONCERN; INTERMIXTURE OF PEOPLE; CORPORATE SOCIAL

RESPONSIBILITY (CSR) ACTIVITIES OF THE COMPANY FOR THE COMMUNITY

“A SATISFIED CUSTOMER IS THE BEST BUSINESS STRATEGY OF ALL.” – MICHAEL LEBOEUF