Environmental Scanning & Monitoring

Environmental scanning is a concept from business

management by which businesses gather
information from the environment, to better
achieve a sustainable competitive advantage.

To sustain competitive advantage the company

must also respond to the information gathered
from environmental scanning by altering its
strategies and plans when the need arises.
 Environmental Scanning & Monitoring
Techniques

SWOT

PEST Techniques QUEST

Competitor
Industry Analysis
Analysis
 SWOT
(Strength-Weakness-Opportunity-Threat)

Identification of threats and

Opportunities in the environment
(External) and strengths and
Weaknesses of the firm (Internal) is
the cornerstone of business policy
formulation; it is these factors which
determine the course of action to
ensure the survival and growth of the
firm.
SWOT Analysis
• The SWOT analysis is an extremely useful tool for
understanding and decision-making for all sorts of
situations in business and organizations. SWOT is an
acronym for Strengths, Weaknesses, Opportunities,
Threats.
• SWOT analysis came from the research conducted at
Stanford Research Institute from 1960-1970. The
background to SWOT stemmed from the need to find out
why corporate planning failed. The research was funded by
the fortune 500 companies to find out what could be done
about this failure. The Research Team were Marion Dosher,
Dr Otis Benepe, Albert Humphrey, Robert Stewart, Birger
Lie.
• It all began with the corporate planning trend, which
seemed to appear first at Du Pont in 1949. By 1960 every
Fortune 500 company had a 'corporate planning manager'
(or equivalent) and 'associations of long range corporate
planners' had sprung up in both the USA and the UK.
Strategic and Creative Use of S.W.O.T
Analysis : Orienting to An Objective

If SWOT analysis does not start with defining a

desired end state or objective, it runs the risk
of being useless. A SWOT analysis may be
incorporated into the strategic planning
model.
An example of a strategic planning technique
that incorporates an objective-driven SWOT
analysis is SCAN analysis.
 SWOT: Studying Internal &
External Environment
The aim of any SWOT analysis is to identify
the key internal and external factors that are
important to achieving the objective. SWOT
analysis groups key pieces of information into
two main categories:
– Internal factors – The strengths and
weaknesses internal to the
organization.
– External factors – The opportunities
and threats presented by the external
environment.
• If a clear objective has been identified, SWOT
analysis can be used to help in the pursuit of
that objective. In this case, SWOTs are:

–Strengths: attributes of the organization

that are helpful to achieving the
objective.
–Weaknesses: attributes of the
organization that are harmful to
achieving the objective.
–Opportunities: external conditions that
are helpful to achieving the objective.
–Threats: external conditions that are
harmful to achieving the objective.
 Examples of SWOTs
• Strengths and Weaknesses
– Resources: financial, intellectual, location
– Cost advantages
– Creativity / ability to develop new products
– Valuable intangible assets: intellectual
capital
– Competitive capabilities
• Opportunities and Threats
– Takeovers
– Market Trends
– Economic condition
– Mergers
– Joint ventures
– Strategic alliances
– Expectations of stakeholders
– Technology
– Public expectations
– Competitors and competitive actions
– Poor Public Relations Development
– Criticism (Editorial)
– Global Markets
– Environmental conditions
 Uses of SWOT Analysis
• Corporate planning
• Set objectives – defining what the organisation is
intending to do
• Environmental scanning
– Internal appraisals of the organisations SWOT, this needs to
include an assessment of the present situation as well as a
portfolio of products/services and an analysis of the
product/service life cycle
• Analysis of existing strategies, this should
determine relevance from the results of an
internal/external appraisal. This may include gap
analysis (compare its actual performance with its
potential performance which will look at
environmental factors)
• Strategic Issues defined – key factors in the
development of a corporate plan which needs to be
addressed by the organisation
• Develop new/revised strategies – revised
analysis of strategic issues may mean the
objectives need to change
• Establish critical success factors – the
achievement of objectives and strategy
implementation
• Preparation of operational, resource, projects
plans for strategy implementation
• Monitoring results – mapping against plans,
taking corrective action which may mean
amending objectives/strategies.
 Also;
Use SWOT analysis for business
planning, strategic planning,
competitor evaluation, marketing,
business and product development
and research reports.
 Handling SWOTs

• Strengths (maintain, build and leverage)

• Opportunities (prioritize and optimize)

• Weaknesses (remedy or exit)

• Threats (counter)