Environmental Threat

& Opportunities
Profile (ETOP)
• ETOP analysis is a management tool that analyses environmental
information and determines the relative impact of threats and
opportunities for the systematic evaluation of the environment.
•  ETOP analysis (environmental threat and opportunity profile) is
the process of gathering information about events and their
relationships within an organization’s internal and external
environments.
• Environment scanning is the process of gathering, analyzing and
dispensing information for tactical or strategic purposes.
• ETOP process involves dividing the environment into different
environmental sectors and then analyzing the impact of each
sector on the organisation.
• ETOP gives a clear picture to the strategies about each aspect of
the business environment, the various individual factors within
each sector which affect the business favourably or otherwise.
• The strategic managers should keep focus on the following
dimensions,
• 1. Issue Selection:
• Focus on issues, which have been selected, should not be
missed since there is a likelihood of arriving at incorrect
priorities. Some of the impotent issues may be those
related to market share, competitive pricing, customer
preferences, technological changes, economic policies,
competitive trends, etc.
• 2. Accuracy of Data:
• Data should be collected from good sources otherwise the
entire process of environmental scanning may go waste.
The relevance, importance, manageability, variability and
low cost of data are some of the important factors, Which
must be kept in focus.
• 3. Impact Studies:
• Impact studies should be conducted focusing on the various
opportunities and threats and the critical issues selected. It
may include study of probable effects on the company’s
strengths and weaknesses, operating and remote
environment, competitive position, accomplishment of
mission and vision etc. Efforts should be taken to make
assessments more objective wherever possible.
• 4. Flexibility in Operations:
• There are number of uncertainties exist in a business
situation and so a company can be greatly benefited buy
devising proactive and flexible strategies in their plans,
structures, strategy etc. The optimum level of flexibility
should be maintained.