ENVIRONMENTAL BUSINESS SCANNING

ENVIRONMENTAL BUSINESS SCANNING

 Businessenvironmental scanning refers to the process of
monitoring and analyzing the external environment in
which a company operates in order to identify potential
opportunities and threats that may impact its operations.
 This involves gathering information about the political,
economic, social, technological, and competitive factors
that could affect the business.
 ENVIRONMENTAL BUSINESS SCANNING
 Environmental scanning helps organizations to anticipate
changing market conditions, identify emerging trends, and stay
ahead of the competition.
 It provides valuable insights that can inform strategic decision-
making and enable businesses to adapt proactively to changes in
the external environment
SWOT ANALYSIS
 SWOT analysis stands for Strengths, Weaknesses,
Opportunities, and Threats.
 It is a framework for analyzing the internal strengths and
weaknesses of a business, as well as the external opportunities
and threats it faces.
 SWOT analysis is useful for identifying areas where a business
can improve and leverage its strengths.
 SWOT ANALYSIS
 Strengths
 Strengths describe what an organization excels at and what separates it from the competition: a strong brand,
loyal customer base, a strong balance sheet, unique technology, and so on. For example, a hedge fund may
have developed a proprietary trading strategy that returns market-beating results. It must then decide how to
use those results to attract new investors.
 Weaknesses
 Weaknesses stop an organization from performing at its optimum level. They are areas where the business
needs to improve to remain competitive: a weak brand, higher-than-average turnover, high levels of debt, an
inadequate supply chain, or lack of capital.
 Opportunities
 Opportunities refer to favorable external factors that could give an organization a competitive advantage. For
example, if a country cuts tariffs, a car manufacturer can export its cars into a new market, increasing sales
and market share.
 Threats
 Threats refer to factors that have the potential to harm an organization. For example, a drought is a threat to a
wheat-producing company, as it may destroy or reduce the crop yield. Other common threats include things
like rising costs for materials, increasing competition, tight labor supply. and so on.
SWOT ANALYSIS
Strengths
Weaknesses
1. What is our competitive
1. Where can we improve?
advantage?
2. What products are
2. What resources do we have?
underperforming?
3. What products are performing
3. Where are we lacking resources?
well?

Opportunities
1. What new technology can we
use?
2. Can we expand our operations?
3. What new segments can we test?
Threats
1. What regulations are changing?
2. What are competitors doing?
3. How are consumer trends
changing?
SWOT ANALYSIS STRATEGIES
PESTEL ANALYSIS
A PESTEL analysis or PESTLE analysis (formerly known as PEST
analysis) is a framework or tool used to analyse and monitor the macro-
environmental factors that may have a profound impact on an
organisation’s performance.
 This tool is especially useful when starting a new business or entering a
foreign market. It is often used in collaboration with other analytical
business tools such as the SWOT analysis and Porter’s Five Forces to give
a clear understanding of a situation and related internal and external
factors.
 PESTEL is an acronym that stand for Political, Economic, Social,
Technological, Environmental and Legal factors.
POLITICAL

 Stability of governments
 Political leaning
 Regulation and deregulation
 Government influence
 Political system
 Political activism
 Lobbying
 Corruption
 Government subsides
 Preferred industries
 Political aims
 Bilateral relationships
ECONOMIC
 Currency strength
 Interest rates
 Inflation rates
 Growth rates
 Access to debt
 Consumer confidence
 Unemployment levels
 Disposable income
 Stock exchange and markets
 Cryptocurrency impact
SOCIO-CULTURAL
 Age range
 Attitude to health
 Social classes
 Birth and death rates
 Marriages and divorces
 Immigration and emigration
 Cultural values
 Life expectancy
 Population size
 Distribution of wealth
 Ethical attitudes
 Religion
 Education levels
 Attitude to risk
TECHNOLOGICAL
 Artificial Intelligence
 Block chain impact
 Automation
 R&D focus
 Data analysis
 Internet infrastructure
 Access to connectivity
 Adoption of technology
 IoT
 Communication advances
 AR & VR
LEGAL

 Health and safety laws

 Employment laws
 Privacy laws
 Consumer protection laws
 Copyright and patent laws
 Education laws
 Discrimination laws
 Safeguarding laws
ENVIRONMENTAL/NATURAL
Climate and weather
Climate change
Attitude to green technology
Pollution levels
Carbon footprint
PORTER’S FIVE FORCES MODEL

 The Porter Five Forces Model is a framework developed by Michael

E. Porter in 1979 to analyze and assess the competitiveness and
attractiveness of an industry. The model helps businesses
understand the dynamics of their industry and determine the potential
profitability and strategic position within the market.
 Threat of new entrants: This force examines the barriers to entry for
new competitors in the industry. Factors such as economies of scale,
product differentiation, capital requirements, and government
regulations can impact the threat of new entrants.
PORTER’S FIVE FORCES MODEL
 Bargaining power of buyers: This force evaluates the power that buyers hold in the market. Factors
such as the concentration of buyers, price sensitivity, availability of substitutes, and switching costs
can influence the bargaining power of buyers.
 Bargaining power of suppliers: This force assesses the power that suppliers have over the industry.
Factors such as supplier concentration, availability of substitutes, supplier switching costs, and the
importance of suppliers' products can affect the bargaining power of suppliers.
 Threat of substitute products or services: This force looks at the potential threat posed by
alternative products or services that could replace or compete with the industry's offerings. Factors
such as price-performance trade-offs, switching costs, and customer loyalty influence the threat of
substitutes.
 Competitive rivalry within the industry: This force examines the intensity of competition among
existing players in the industry. Factors such as industry growth, product differentiation, market
concentration, exit barriers, and strategic alliances impact competitive rivalry.
Porter’s Five Forces Model