{"id":99,"date":"2018-10-11T06:12:47","date_gmt":"2018-10-11T06:12:47","guid":{"rendered":"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/?post_type=chapter&#038;p=99"},"modified":"2019-01-10T09:56:41","modified_gmt":"2019-01-10T09:56:41","slug":"environmental-scanning-and-approaches","status":"publish","type":"chapter","link":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/chapter\/environmental-scanning-and-approaches\/","title":{"rendered":"Environmental Scanning and Approaches"},"content":{"raw":"<div><span style=\"float: right\"><a href=\"https:\/\/youtu.be\/MsDRWeUenjk\" target=\"_blank\" rel=\"noopener\"><img src=\"http:\/\/epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/2018\/11\/download.png\" alt=\"epgp books\" width=\"75px\" height=\"75px;\" \/><\/a>\r\n<\/span><\/div>\r\n&nbsp;\r\n<div>\r\n\r\n<strong>1.\u00a0\u00a0<\/strong><strong>Learning Outcomes<\/strong>\r\n\r\n&nbsp;\r\n\r\nAfter studying this module, you shall be able to\r\n<ol>\r\n \t<li>Understand the concept of environmental scanning<\/li>\r\n \t<li>Know different factors to be considered for environmental scanning<\/li>\r\n \t<li>Understand the need for environmental scanning<\/li>\r\n \t<li>Study various approaches to environmental scanning<\/li>\r\n \t<li>Learn about the sources of information for environmental scanning<\/li>\r\n \t<li>Analyse the methods and techniques for environmental scanning<\/li>\r\n \t<li>Understand SWOT Analysis<\/li>\r\n \t<li>Learn about PESTLE Analysis<\/li>\r\n<\/ol>\r\n&nbsp;\r\n\r\n<strong>2.<\/strong>\u00a0<strong>Meaning\u00a0\u00a0\u00a0 of\u00a0\u00a0\u00a0 Environmental\u00a0\u00a0\u00a0 Scanning<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>and\u00a0\u00a0\u00a0 Factors\u00a0\u00a0\u00a0 to\u00a0\u00a0\u00a0 be\u00a0\u00a0 considered<\/strong>\u00a0\u00a0\u00a0\u00a0 <strong>for<\/strong>\r\n\r\n&nbsp;\r\n\r\n<strong>Environmental Scanning<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">Environmental Scanning relates to examining and understanding the environment in which a business unit exists, in order to facilitate strategic decision making. It refers to studying both internal as well as external environment and analysing its impact on the business opportunities. It also includes making prior judgements about the risks and uncertainties that the business may have to encounter in near future.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">Hunger pointed out that Environmental scanning is the monitoring, evaluating and disseminating of information from the external and internal environments to key people within the corporation. It is a tool that a corporation uses to avoid strategic surprise and to ensure long \u2013 term health.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">Azhar Kazmi, quoted in his book \u2013 \u201cBusiness Policy and Strategic Management\u201d that \u2013 \u201cThe process by which organizations monitor their relevant environment to identify opportunities and threats defecting their business is known as environmental scanning.\u201d<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">The businesses function in an environment which is ever changing as the environment is known to be dynamic; therefore the scanning of the environment has to be a fast and regular process.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><span style=\"font-size: 1em;text-align: initial\">The environmental scanning cannot be a onetime action in a business; in fact it is constantly watching the external environment and micro-scoping of internal environment.<\/span><\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><span style=\"text-align: initial;font-size: 1em\">Environmental Scanning provides a broader perspective to the management and planning department to formulate plans and strategies. In other words, it is the process which helps organisations to observe the environment in which they function in order to identify the opportunities and threats impacting their business.<\/span><\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><span style=\"text-align: initial;font-size: 1em\">Factors to be consider for environmental scanning \u2013<\/span><\/p>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n1.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>Events <\/strong>are relevant and specific incidents which take place in the different environmental factors.\r\n\r\n&nbsp;\r\n\r\n2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>Trends <\/strong>are the general courses of action along which the events take place.\r\n\r\n&nbsp;\r\n\r\n3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>Issues <\/strong>are the current matters that may arise as a result of the events and trends.\r\n\r\n&nbsp;\r\n\r\n4.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>Expectations <\/strong>are the demands and requirements of the concerned groups in view of the trends and issues.\r\n\r\n&nbsp;\r\n\r\n<strong>Example: Gas leakage accident at Bhopal in Dec. 1984<\/strong>\r\n\r\n<img class=\"alignnone size-full wp-image-105\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/1-14.png\" alt=\"\" width=\"587\" height=\"205\" \/>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">The environmental scanning process enables an organisation to analyse the influence which various situations and changes in the environment exert on its strategic management process. Since the environment facing any organization is complex and its scanning is absolutely\u00a0<span style=\"font-size: 1em;text-align: initial\">essential, strategists (who, as individuals or in groups \u2013 internal or external; are concerned with and play a role in strategic management) have to deal cautiously with the process of environmental scanning.<\/span><\/p>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong>Objectives \u2013<\/strong>\r\n<ul>\r\n \t<li style=\"text-align: justify\">To make efforts to deal with the important issues impacting the business and avoid wasting time and effort on irrelevant factors.<\/li>\r\n \t<li style=\"text-align: justify\">To enable this it is important to devise an approach, or a combination of approaches to environmental scanning.<\/li>\r\n<\/ul>\r\n&nbsp;\r\n\r\n<strong>3.\u00a0<\/strong><strong>Need for Environmental Scanning<\/strong>\r\n\r\n&nbsp;\r\n\r\nEnvironmental Scanning is essential because of following reasons \u2013\r\n\r\n&nbsp;\r\n<ol>\r\n \t<li style=\"text-align: justify\"><strong>Prime Influence <\/strong>\u2013 Environment impacts the effectiveness of business strategies majorly. The strategic planning can be undertaken without taking environment into account as any change in the environmental factors affects the business decisions. In addition, the successful implementation of strategies is also dependent on the environment.<\/li>\r\n \t<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">A tool to anticipate Changes <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 Environmental scanning is an effective tool for predicting the changes that may happen in the environmental factors in near future. It not only makes an organisation aware of its business surroundings but also prepares it to face the challenges in future.<\/span><\/li>\r\n \t<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">Time for adjustment <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 Environment scanning gives time to an organisation to adjust according to the changing environment. As businesses may have to come across sudden changes in the environment, environmental scanning helps the organisation in adapting to the changes by predicting them before hand.<\/span><\/li>\r\n \t<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">Early Warning system <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 The scanning process, if done properly, may predict the adverse changes in the business environment and help the organisation in developing a defence mechanism to counter the adverse changes.<\/span><\/li>\r\n<\/ol>\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong>Approaches to Environmental Scanning<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">As suggested by Kubr, three approaches can be to organise the information for the process of environmental scanning<\/p>\r\n&nbsp;\r\n<ol>\r\n \t<li style=\"text-align: justify\"><strong>Systematic Approach \u2013 <\/strong>Gathering information for environmental scanning which have a direct impact on organizations activities, Govt. policy statements relating to the business and industry, keeping a track of alterations and taking the same into account. The information so collected necessarily needs to be updated to the strategic management team for strategic decision-making and also for making changes in the operational activities.<\/li>\r\n \t<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Ad Hoc Approach <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 In this approach, organisations periodically conduct special projects and evaluate existing strategies and also to formulate new strategies. Sometimes special surveys and studies are also undertaken in order to address the environmental issues.<\/span><\/li>\r\n \t<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">Processed \u2013 form Approach \u2013 <\/strong><span style=\"text-align: initial;font-size: 1em\">Some organisations may use secondary data which is\u00a0<\/span>processed by Govt. or private agencies; this is often referred to as processed form approach.Since environmental scanning is absolutely necessary for strategy formulation of any organization, whatever approaches is adapted, DATA Collection and Processing systematically is ultimate for Strategic Management Process.<\/li>\r\n \t<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">Sources of Information for Environmental Scanning\u00a0<\/strong>Strategists use different information sources depending on their needs for environmental scanning. The sources of information could be formal or informal, written as well as verbal and external or internal.<\/li>\r\n<\/ol>\r\n&nbsp;\r\n\r\n<strong>1.\u00a0\u00a0<\/strong><strong>External Sources \u2013<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">a)\u00a0 Documentary or secondary sources of information like publications. These could be newspaper, magazines, journals, books, trade and industry association newsletter, Govt. Publications, annual reports of competitions etc., information from<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><span style=\"font-size: 1em;text-align: initial\">b)\u00a0 \u00a0Media sources like audio, visual, audio-visual media (radio, television, internet)<\/span><\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><span style=\"text-align: initial;font-size: 1em\">c)\u00a0 External Agencies like customers, marketing intermediaries, suppliers, trade associations, Govt. agencies and so on.<\/span><\/p>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong>2.\u00a0<\/strong><strong>Internal Sources \u2013<\/strong>\r\n\r\n&nbsp;\r\n\r\na) Company files and documents, MIS, databases, company employees.\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">b) Formal analysis and studies undertaken by organisations with the help of employees, market research agencies, consultants and educational institutions etc.<\/p>\r\n&nbsp;\r\n\r\nSome of the important sources of information used in Indian context can be \u2013\r\n\r\n&nbsp;\r\n\r\n<strong>1.\u00a0<\/strong><strong>International Publications<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">a)\u00a0 Data published by Intergovernmental and international agencies like UN, UNCTAD, UNESCO, WTO, IMF, OECD, etc.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">b) International private data agencies like Fitch, Moody\u2019s, Standard &amp; Poor, etc.<\/p>\r\n&nbsp;\r\n\r\n<strong>11.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><strong>World Wide Web, Online databases and systems<\/strong>\r\n\r\n&nbsp;\r\n\r\na)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Search engines.\r\n\r\n&nbsp;\r\n\r\nb)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Online databases of govt and private data agencies.\r\n\r\n&nbsp;\r\n\r\n<strong>111. Government Publications<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">a) Government information sources such as Census of India report; five-year plan reports etc. provide important inputs for planning purpose.<\/p>\r\n<p style=\"text-align: justify\">b)\u00a0 \u00a0Periodic reports like economic surveys, annual surveys etc. provide current data.<\/p>\r\n<p style=\"text-align: justify\">c) Occasional reports brought out by statutory agencies such as guidelines to industries, export-import policies etc. which are relevant for business and industry.<\/p>\r\n<p style=\"text-align: justify\">d) Reference books and encyclopaedias.<\/p>\r\n&nbsp;\r\n\r\n<strong>1V.\u00a0\u00a0\u00a0 Institutional Publications<\/strong>\r\n\r\n&nbsp;\r\n\r\na)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Information on economic indices published by Centre of Monitoring India Economy (CMIE).\r\n\r\n&nbsp;\r\n\r\nb)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Publications of market research agencies like NCAER etc.\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\"><span style=\"font-size: 1em;text-align: initial\">c)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Publications of trade and industry federations such as CII, FICCI, ASSOCHAM, NASSCOM, ATMA etc.<\/span><\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><span style=\"text-align: initial;font-size: 1em\">d)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Annual company reports having data relating to balance sheet and profit and loss account.<\/span><\/p>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong>V.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><strong>Periodicals and Newspapers<\/strong>\r\n\r\n<strong>\u00a0<\/strong>\r\n\r\n<strong>V1.\u00a0 Industrial Espionage agencies<\/strong>\r\n\r\n<strong>\u00a0<\/strong>\r\n<p style=\"text-align: justify\">Private agencies provide information and reports on competitors, which may be essential for strategic planning.<\/p>\r\n&nbsp;\r\n\r\n<strong>5.\u00a0<\/strong><strong>Methods and Techniques Used for Environmental Scanning<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">There are wide range of methods and techniques available for environmental scanning. Strategists may choose one which suit their needs in terms of the \u2013<\/p>\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n\u2022\u00a0 Quantity\r\n\r\n\u2022\u00a0 Quality\r\n\r\n\u2022\u00a0 Availability\r\n\r\n\u2022\u00a0 Time lines\r\n\r\n\u2022\u00a0 Application\/ Relevance\r\n\r\n\u2022\u00a0 Expenditure on getting environmental information\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">Many authors have given various methods and techniques which can be used for environmental scanning. Le Bell and Krasner have outlined 9 groups of techniques:<\/p>\r\n&nbsp;\r\n\r\n1.\u00a0\u00a0\u00a0\u00a0\u00a0 Unstructured expert opinion\r\n\r\n2.\u00a0\u00a0\u00a0\u00a0\u00a0 Structured expert opinion\r\n\r\n3.\u00a0\u00a0\u00a0\u00a0\u00a0 Single \u2013 variable extrapolation\r\n\r\n4.\u00a0\u00a0\u00a0\u00a0\u00a0 Theoretical \u2013 limit envelopes\r\n\r\n5.\u00a0\u00a0\u00a0\u00a0\u00a0 Dynamic modes\r\n\r\n6.\u00a0\u00a0\u00a0\u00a0\u00a0 Mapping\r\n\r\n<span style=\"font-size: 1em;text-align: initial\">7.\u00a0\u00a0\u00a0\u00a0\u00a0 Multivariable interaction analysis<\/span>\r\n\r\n<span style=\"text-align: initial;font-size: 1em\">8.\u00a0\u00a0\u00a0\u00a0\u00a0 Structured in expert speculation<\/span>\r\n\r\n<span style=\"text-align: initial;font-size: 1em\">9.\u00a0\u00a0\u00a0\u00a0\u00a0 Unstructured in expert speculation<\/span>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\nBut the most popular of these are \u2013\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>1)\u00a0\u00a0<\/strong><strong>Structured\/ Unstructured expert opinion <\/strong>\u2013 The opinions of experts in field of business, in related industry, working in similar type of markets can be used for the purpose of environmental scanning. These people have expertise knowledge about the business as they are well aware of the current trends and may also be valuable in predicting future trends of the business e.g. a person who a wants to set up a restaurant may seek opinion of expert in the same business in order to know the prospects of the business. The opinions can be gathered through a structured survey and also through informal talk with the experts. These opinions may help in giving a clear picture of the business environment and also the future trends.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>2)\u00a0<\/strong><strong>Extrapolation <\/strong>\u2013 The statistical technique of extrapolation helps to calculate the future trends from the data of current trends; for instance, a company may use the data of sales of past 10 years to predict the future sale trends.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>3)\u00a0<\/strong><strong>Estimate <\/strong>\u2013 This technique considers the best and worst scenarios the business may have to witness as a result of the changes in its environment. These cases are further used to predict more possibilities and probabilities of opportunities and threats which may occur in near future.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>4)\u00a0<\/strong><strong>Mapping <\/strong>\u2013 Mapping is a tool that tracks the environmental factors to identify that which factors are changing and how much change is there is each of them. Mapping also tries to uncover the rate and trends of change taking place in each factor, as all the factors do not change simultaneously. While, some factors change frequently others remain constant for some time. Thus, mapping defines the direction of changes taking place in environmental factors and also the level of change.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>5)\u00a0<\/strong><strong>Modelling <\/strong>\u2013 In modelling various statistical tools like regression analysis or probability tables etc. are used for future prediction.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">6)\u00a0\u00a0<\/strong><span style=\"text-align: initial;font-size: 1em\">C<\/span><strong style=\"text-align: initial;font-size: 1em\">haos Theory<\/strong> <strong style=\"text-align: initial;font-size: 1em\">\u2013<\/strong><span style=\"text-align: initial;font-size: 1em\"> Chaos theory by Edward Lorenz and Michael Feigenbaum, uses mathematical models, known as chaotic models, to interpret the process of non \u2013 linear and dynamic system.<\/span><span style=\"text-align: initial;font-size: 1em\">The phenomenon of Chaos is observed in a wide variety of processes \u2013 biological, sociological, economic, and meteorological. The applications of Chaos theory in management may range from predicting market behaviour, financial forecasting and anticipating competitive strategies.<\/span><\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">7)\u00a0\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">QUEST Technique \u2013 <\/strong><span style=\"text-align: initial;font-size: 1em\">Quick environmental scanning techniques is a process which analyses various scenarios after scanning the environment and then come out with different strategic options available. The process involves four steps which are \u2013<\/span><\/p>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n1.\u00a0\u00a0\u00a0\u00a0 Internal\u00a0 strategists\u00a0 will\u00a0 observe\u00a0 and\u00a0 identify\u00a0 the\u00a0 major\u00a0 events\u00a0 and\u00a0 trends\u00a0 in\u00a0 the\r\n\r\n2.\u00a0\u00a0 Speculate on a wide range of important ISSUES that might affect the future of their organization.\r\n<p style=\"text-align: justify\">3.\u00a0\u00a0\u00a0\u00a0 Preparing a report summarizing the major issues and their implications and 3-5 scenarios incorporating the major themes of their discussion.<\/p>\r\n<p style=\"text-align: justify\">4. Report and scenarios are reviewed by a group of strategists who identify feasible strategic options to deal with the evolving environment.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">After the environmental scanning process is complete, the strategists start to appraise the environment - called environmental appraisal. It is structured by the preparation of the environmental threats and opportunities profile (ETOP), which involves breaking up the environment in various segments or sectors and predicting the influence of each segment on the business.<\/p>\r\n\r\n<\/div>\r\n&nbsp;\r\n\r\n<strong style=\"text-align: initial;font-size: 1em\">6.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">SWOT Analysis<\/strong>\r\n<div>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\">SWOT, is an instrumental framework in value based management and strategy formulation to give in-depth information about strengths, weaknesses, opportunities and threats for a particular company \/ organization. SWOT analysis or environmental analysis is a process which enables an organisation to examine its related environment to find out the existing opportunities and threats that may affect its business. It is a process of studying the environment before taking decisions and formulating strategies.<\/p>\r\n<img class=\"size-full wp-image-109 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/1-15.png\" alt=\"\" width=\"407\" height=\"143\" \/>\r\n\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\nPossible strengths are \u2013\r\n<ul>\r\n \t<li>Name recognition<\/li>\r\n \t<li>Proprietary technology<\/li>\r\n \t<li>Cost advantages<\/li>\r\n \t<li>Skilled employees<\/li>\r\n \t<li>Loyal customers etc.<\/li>\r\n<\/ul>\r\n&nbsp;\r\n<p style=\"text-align: justify\">And weakness is a company\u2019s lack of ability or a situation that acts as a disadvantage for it in comparison to its counterparts. Weakness is an inherent limitation or shortcoming of an organisation, which can lead it to strategic disadvantage; however, weaknesses are areas which are capable of improvement. Possible weaknesses are \u2013<\/p>\r\n\r\n<ul>\r\n \t<li>Poor market image<\/li>\r\n \t<li>Limited finance<\/li>\r\n \t<li>Lack of efficient human resources<\/li>\r\n \t<li>Obsolete facilities<\/li>\r\n \t<li>Internal operating problems<\/li>\r\n \t<li>Poor marketing skills etc.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<div>\r\n<p style=\"text-align: justify\">An opportunity is a favourable condition in the organization\u2019s environment which enables it to strengthen its position.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">A threat is an unfavourable condition in the business environment that may adversely affect the business and cause damage to the organization. Threats are anything from the environment that can adversely affect its performance or achievement of its goals. Threats can be external or internal, external threats could be inflation, new legislation, or a new competitor in your market while internal threats could include a skill or staff shortage within your organisation.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">The relationships in a SWOT analysis are generally\u2019 represented by a 2x2 matrix, wherein the \u2018Strength\u2019 and \u2018Opportunities\u2019 are both positive considerations while \u2018Weakness\u2019 and \u2018Threats\u2019 are both negative considerations.<\/p>\r\n&nbsp;\r\n<p style=\"text-align: justify\">The matrix identifies the strength, weaknesses, threats and opportunities of a business firm. This formation can be used by the company in many ways in evolving its options for the future. In general, the company should attempt to \u2013<\/p>\r\n&nbsp;\r\n\r\n\u00a7\u00a0\u00a0\u00a0\u00a0\u00a0 Build its strength\r\n\r\n\u00a7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Reverse its weakness\r\n\r\n\u00a7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Maximize its response to opportunities\r\n\r\n\u00a7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Overcome to its threats\r\n\r\n<\/div>\r\n&nbsp;\r\n\r\n<span style=\"text-align: initial;font-size: 1em\">The final results of an analysis could be listed in the matrix in given below \u2013<\/span>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong>The SWOT Matrix \u2013<\/strong>\r\n\r\n<img class=\"size-full wp-image-112 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/1-16.png\" alt=\"\" width=\"612\" height=\"568\" \/>\r\n\r\n&nbsp;\r\n\r\n<strong>ROLE AND IMPORTANCE OF SWOT ANALYSIS<\/strong>\r\n\r\n&nbsp;\r\n<p style=\"text-align: justify\"><strong>A.\u00a0\u00a0<\/strong><strong>Identify strengths <\/strong>\u2013 The internal environment analysis identifies the strengths of an organisation. The internal environment includes the resources of the organisation - physical,\u00a0<span style=\"font-size: 1em;text-align: initial\">financial and human resources for instance \u2013 when a company has superior technology in comparison to its counterparts, it becomes strength for the company.<\/span><\/p>\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">B.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Identify weaknesses <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 SWOT analysis also identifies the areas where a company needs improvement and which puts it at a disadvantage in comparison to its competitors. The analysis helps a company to spot such weaknesses and take corrective actions, for instance \u2013 having lesser financial resources can be a weakness and in order to work on this issue the company may have to explore for avenues to raise additional funds.<\/span><\/p>\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">C.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Identify opportunities <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 The external environment may have to offer many new opportunities for businesses and SWOT analysis helps a company in recognising them.<\/span><\/p>\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">D.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Identify threats <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 With many opportunities, the external environment also leads a company to various threats from competitors, govt. policies, etc. Early identification of such threats helps a company to counter them in future. For instance, the govt. may change the taxation policies which may further affect the costing for the firms; therefore, business firm must take necessary steps to reduce the effect of such changes.<\/span><\/p>\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">E.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Effective planning <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 Environmental analysis also helps a firm in planning its future actions and facilitates quick decision-making. The planning exercise must take into account the\u00a0<\/span><span style=\"text-align: initial;font-size: 1em\">internal and external environment and the SWOT analysis enables a firm to make well defined plans.<\/span><\/p>\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">F.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Facilitates Organising Resources <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 Environmental analysis helps an organisation to predict the future demand of their products which enables it to organise its resources accordingly. The organisation can plan the requirement of resources to handle the activities of the market.<\/span><\/p>\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">G.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Face Competition <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 The environmental analysis helps a firm to identify the strengths and weaknesses of its competitors, which further enables it to counter the strengths of the\u00a0<\/span><span style=\"text-align: initial;font-size: 1em\">competitors and also exploit the competitors\u2019 weaknesses in its favour.<\/span><\/p>\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">H.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Flexibility in Operations <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 As the environment keeps changing, the environmental analysis enables a firm to adjust its operations accordingly.<\/span><\/p>\r\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">7.\u00a0\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">PESTLE Analysis\u00a0<\/strong><span style=\"text-align: initial;font-size: 1em\">Environmental Scanning is an important component when the business is in Competition.<\/span><\/p>\r\n\r\n<\/div>\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<strong>The PESTLE Matrix \u2013<\/strong>\r\n\r\n&nbsp;\r\n\r\n<img class=\"alignnone size-full wp-image-118\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/1-17.png\" alt=\"\" width=\"540\" height=\"604\" \/>\r\n\r\n<\/div>\r\n<strong>\u00a0<\/strong>\r\n<div>\r\n<p style=\"text-align: justify\">PESTLE analysis involves identifying the political, economic, socio-cultural, technological, legal and environmental influences of an organization or policy in the past, and how they might do so in future. The advantage of this tool is that it encourages management into proactive and structured thinking in its decision making.<\/p>\r\n\r\n<ul>\r\n \t<li style=\"text-align: justify\">Like the SWOT analysis, the PESTLE analysis is also simple, quick, and uses four key perspectives. PESTLE analysis, has its origins in the PEST analysis, which involves identifying the political, economic, socio-cultural and technological influences on an organization.<\/li>\r\n \t<li style=\"text-align: justify\">The PESTLE analysis is used to provide a context for the organisation's \/ individual's role in relation to the external environment (mainly macro and mega environment).<\/li>\r\n \t<li style=\"text-align: justify\">Depending on which elements are included it can also be referred to as STEP, STEEP, PESTEL, PESTLE or LEPEST.<\/li>\r\n \t<li style=\"text-align: justify\">Recently it was even further extended to STEEPLE and STEEPLED, including education and demographics.<\/li>\r\n \t<li style=\"text-align: justify\">PESTLE is useful before SWOT - not generally the other way round as it helps to identify SWOT factors.<\/li>\r\n<\/ul>\r\n&nbsp;\r\n\r\n<strong>8.\u00a0<\/strong><strong>Pitfalls in Environmental Scanning<\/strong>\r\n\r\n&nbsp;\r\n\r\nFew pitfalls faced while using environmental scanning can be \u2013\r\n<ul>\r\n \t<li style=\"text-align: justify\">Increased focus of planners on relevant environment of the business organisation may sometimes lead to avoidance of the events taking place in the general business environment that may affect the business.<\/li>\r\n \t<li style=\"text-align: justify\">Environmental scanning may lead to increased information inflow for the organisation creating an information overload which may further delay timely actions, thus leading to paralysis by analysis.<\/li>\r\n \t<li style=\"text-align: justify\">The purpose of environmental scanning is to uncover influences that matter for the future of the organisational strategic decision-making. This purpose should not be lost and environmental scanning should not be used for purposes other than this.<\/li>\r\n \t<li style=\"text-align: justify\">Environmental scanning function should not be integrated too closely with operational and functional activities of the organisation.<\/li>\r\n \t<li style=\"text-align: justify\">Environmental should not be too far from realities of the organisation, making it impersonal, staff function.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<div>\r\n<p style=\"text-align: justify\">After the scanning process is complete, the strategists have to give structure to the huge information available. They have to filter the information in such a manner that a clear picture of opportunities and threats operating in different sectors emerges and can be utilised by the organisational benefits.<\/p>\r\n&nbsp;\r\n\r\n<strong>9.\u00a0<\/strong><strong>Summary<\/strong>\r\n<ul>\r\n \t<li style=\"text-align: justify\">Environmental scanning refers to studying both internal as well as external environment and analysing its impact on the business opportunities.<\/li>\r\n \t<li style=\"text-align: justify\">Environmental Scanning provides a broader perspective to the management and planning department to formulate plans and strategies.<\/li>\r\n \t<li style=\"text-align: justify\">The environmental scanning process enables an organisation to analyse the influence which various situations and changes in the environment exert on its strategic management process.<\/li>\r\n \t<li style=\"text-align: justify\">Environmental Scanning is essential because environment has a major affect on the effectiveness of business strategies, helps to anticipate the changes, gives time to the company to get adjust to the changed environment and gives advance warning or danger signals of the adverse changes in environment.<\/li>\r\n \t<li style=\"text-align: justify\">Environmental Scanning can be done by following different approaches viz. systematic approach, ad-hoc approach and processed-form approach.<\/li>\r\n \t<li style=\"text-align: justify\">Environmental scanning requires information to be analysed and the sources of information may be formal or informal, written as well as verbal and external or internal.<\/li>\r\n \t<li style=\"text-align: justify\">A wide range of methods and techniques can be adopted for environmental scanning. Strategists may choose one caters to their requirements on factors like quantity, quality, availability, time lines, relevance and cost of environmental information.<\/li>\r\n \t<li style=\"text-align: justify\">SWOT analysis is a systematic approach to find the strengths, weaknesses opportunities and threats relating to an organisation and its environment.<\/li>\r\n \t<li style=\"text-align: justify\">In the SWOT analysis, \u2018SW\u2019 stands for strengths and weaknesses while \u2018OT\u2019 stands for opportunities and threats. Strengths and weaknesses are internal to an organisation whereas the external environment creates opportunities and threats for the business. SWOT analysis helps an organisation to find out its positive and negative points.<\/li>\r\n \t<li style=\"text-align: justify\">PESTLE analysis involves identifying the political, economic, socio-cultural, technological, legal and environmental influences of an organization or policy in the past, and how they might do so in future.<\/li>\r\n \t<li style=\"text-align: justify\">PESTLE analysis encourages management into proactive and structured thinking in its decision making.<\/li>\r\n<\/ul>\r\n&nbsp;\r\n\r\n<\/div>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong>you can view video on Environmental Scanning and Approaches<\/strong><\/td>\r\n<td><a href=\"https:\/\/youtu.be\/MsDRWeUenjk\" target=\"_blank\" rel=\"noopener\"><img class=\"alignnone wp-image-120\" src=\"http:\/\/epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/2018\/11\/download.png\" alt=\"\" width=\"36\" height=\"36\" \/><\/a><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>","rendered":"<div><span style=\"float: right\"><a href=\"https:\/\/youtu.be\/MsDRWeUenjk\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" src=\"http:\/\/epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/2018\/11\/download.png\" alt=\"epgp books\" width=\"75px\" height=\"75px;\" \/><\/a><br \/>\n<\/span><\/div>\n<p>&nbsp;<\/p>\n<div>\n<p><strong>1.\u00a0\u00a0<\/strong><strong>Learning Outcomes<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>After studying this module, you shall be able to<\/p>\n<ol>\n<li>Understand the concept of environmental scanning<\/li>\n<li>Know different factors to be considered for environmental scanning<\/li>\n<li>Understand the need for environmental scanning<\/li>\n<li>Study various approaches to environmental scanning<\/li>\n<li>Learn about the sources of information for environmental scanning<\/li>\n<li>Analyse the methods and techniques for environmental scanning<\/li>\n<li>Understand SWOT Analysis<\/li>\n<li>Learn about PESTLE Analysis<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p><strong>2.<\/strong>\u00a0<strong>Meaning\u00a0\u00a0\u00a0 of\u00a0\u00a0\u00a0 Environmental\u00a0\u00a0\u00a0 Scanning<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>and\u00a0\u00a0\u00a0 Factors\u00a0\u00a0\u00a0 to\u00a0\u00a0\u00a0 be\u00a0\u00a0 considered<\/strong>\u00a0\u00a0\u00a0\u00a0 <strong>for<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Environmental Scanning<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Environmental Scanning relates to examining and understanding the environment in which a business unit exists, in order to facilitate strategic decision making. It refers to studying both internal as well as external environment and analysing its impact on the business opportunities. It also includes making prior judgements about the risks and uncertainties that the business may have to encounter in near future.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Hunger pointed out that Environmental scanning is the monitoring, evaluating and disseminating of information from the external and internal environments to key people within the corporation. It is a tool that a corporation uses to avoid strategic surprise and to ensure long \u2013 term health.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Azhar Kazmi, quoted in his book \u2013 \u201cBusiness Policy and Strategic Management\u201d that \u2013 \u201cThe process by which organizations monitor their relevant environment to identify opportunities and threats defecting their business is known as environmental scanning.\u201d<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">The businesses function in an environment which is ever changing as the environment is known to be dynamic; therefore the scanning of the environment has to be a fast and regular process.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><span style=\"font-size: 1em;text-align: initial\">The environmental scanning cannot be a onetime action in a business; in fact it is constantly watching the external environment and micro-scoping of internal environment.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><span style=\"text-align: initial;font-size: 1em\">Environmental Scanning provides a broader perspective to the management and planning department to formulate plans and strategies. In other words, it is the process which helps organisations to observe the environment in which they function in order to identify the opportunities and threats impacting their business.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><span style=\"text-align: initial;font-size: 1em\">Factors to be consider for environmental scanning \u2013<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p>1.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>Events <\/strong>are relevant and specific incidents which take place in the different environmental factors.<\/p>\n<p>&nbsp;<\/p>\n<p>2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>Trends <\/strong>are the general courses of action along which the events take place.<\/p>\n<p>&nbsp;<\/p>\n<p>3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>Issues <\/strong>are the current matters that may arise as a result of the events and trends.<\/p>\n<p>&nbsp;<\/p>\n<p>4.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <strong>Expectations <\/strong>are the demands and requirements of the concerned groups in view of the trends and issues.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Example: Gas leakage accident at Bhopal in Dec. 1984<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-105\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/1-14.png\" alt=\"\" width=\"587\" height=\"205\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-14.png 587w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-14-300x105.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-14-65x23.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-14-225x79.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-14-350x122.png 350w\" sizes=\"auto, (max-width: 587px) 100vw, 587px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">The environmental scanning process enables an organisation to analyse the influence which various situations and changes in the environment exert on its strategic management process. Since the environment facing any organization is complex and its scanning is absolutely\u00a0<span style=\"font-size: 1em;text-align: initial\">essential, strategists (who, as individuals or in groups \u2013 internal or external; are concerned with and play a role in strategic management) have to deal cautiously with the process of environmental scanning.<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p><strong>Objectives \u2013<\/strong><\/p>\n<ul>\n<li style=\"text-align: justify\">To make efforts to deal with the important issues impacting the business and avoid wasting time and effort on irrelevant factors.<\/li>\n<li style=\"text-align: justify\">To enable this it is important to devise an approach, or a combination of approaches to environmental scanning.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>3.\u00a0<\/strong><strong>Need for Environmental Scanning<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>Environmental Scanning is essential because of following reasons \u2013<\/p>\n<p>&nbsp;<\/p>\n<ol>\n<li style=\"text-align: justify\"><strong>Prime Influence <\/strong>\u2013 Environment impacts the effectiveness of business strategies majorly. The strategic planning can be undertaken without taking environment into account as any change in the environmental factors affects the business decisions. In addition, the successful implementation of strategies is also dependent on the environment.<\/li>\n<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">A tool to anticipate Changes <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 Environmental scanning is an effective tool for predicting the changes that may happen in the environmental factors in near future. It not only makes an organisation aware of its business surroundings but also prepares it to face the challenges in future.<\/span><\/li>\n<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">Time for adjustment <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 Environment scanning gives time to an organisation to adjust according to the changing environment. As businesses may have to come across sudden changes in the environment, environmental scanning helps the organisation in adapting to the changes by predicting them before hand.<\/span><\/li>\n<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">Early Warning system <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 The scanning process, if done properly, may predict the adverse changes in the business environment and help the organisation in developing a defence mechanism to counter the adverse changes.<\/span><\/li>\n<\/ol>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p><strong>Approaches to Environmental Scanning<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">As suggested by Kubr, three approaches can be to organise the information for the process of environmental scanning<\/p>\n<p>&nbsp;<\/p>\n<ol>\n<li style=\"text-align: justify\"><strong>Systematic Approach \u2013 <\/strong>Gathering information for environmental scanning which have a direct impact on organizations activities, Govt. policy statements relating to the business and industry, keeping a track of alterations and taking the same into account. The information so collected necessarily needs to be updated to the strategic management team for strategic decision-making and also for making changes in the operational activities.<\/li>\n<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Ad Hoc Approach <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 In this approach, organisations periodically conduct special projects and evaluate existing strategies and also to formulate new strategies. Sometimes special surveys and studies are also undertaken in order to address the environmental issues.<\/span><\/li>\n<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">Processed \u2013 form Approach \u2013 <\/strong><span style=\"text-align: initial;font-size: 1em\">Some organisations may use secondary data which is\u00a0<\/span>processed by Govt. or private agencies; this is often referred to as processed form approach.Since environmental scanning is absolutely necessary for strategy formulation of any organization, whatever approaches is adapted, DATA Collection and Processing systematically is ultimate for Strategic Management Process.<\/li>\n<li style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">Sources of Information for Environmental Scanning\u00a0<\/strong>Strategists use different information sources depending on their needs for environmental scanning. The sources of information could be formal or informal, written as well as verbal and external or internal.<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p><strong>1.\u00a0\u00a0<\/strong><strong>External Sources \u2013<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">a)\u00a0 Documentary or secondary sources of information like publications. These could be newspaper, magazines, journals, books, trade and industry association newsletter, Govt. Publications, annual reports of competitions etc., information from<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><span style=\"font-size: 1em;text-align: initial\">b)\u00a0 \u00a0Media sources like audio, visual, audio-visual media (radio, television, internet)<\/span><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><span style=\"text-align: initial;font-size: 1em\">c)\u00a0 External Agencies like customers, marketing intermediaries, suppliers, trade associations, Govt. agencies and so on.<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p><strong>2.\u00a0<\/strong><strong>Internal Sources \u2013<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>a) Company files and documents, MIS, databases, company employees.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">b) Formal analysis and studies undertaken by organisations with the help of employees, market research agencies, consultants and educational institutions etc.<\/p>\n<p>&nbsp;<\/p>\n<p>Some of the important sources of information used in Indian context can be \u2013<\/p>\n<p>&nbsp;<\/p>\n<p><strong>1.\u00a0<\/strong><strong>International Publications<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">a)\u00a0 Data published by Intergovernmental and international agencies like UN, UNCTAD, UNESCO, WTO, IMF, OECD, etc.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">b) International private data agencies like Fitch, Moody\u2019s, Standard &amp; Poor, etc.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>11.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><strong>World Wide Web, Online databases and systems<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>a)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Search engines.<\/p>\n<p>&nbsp;<\/p>\n<p>b)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Online databases of govt and private data agencies.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>111. Government Publications<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">a) Government information sources such as Census of India report; five-year plan reports etc. provide important inputs for planning purpose.<\/p>\n<p style=\"text-align: justify\">b)\u00a0 \u00a0Periodic reports like economic surveys, annual surveys etc. provide current data.<\/p>\n<p style=\"text-align: justify\">c) Occasional reports brought out by statutory agencies such as guidelines to industries, export-import policies etc. which are relevant for business and industry.<\/p>\n<p style=\"text-align: justify\">d) Reference books and encyclopaedias.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>1V.\u00a0\u00a0\u00a0 Institutional Publications<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>a)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Information on economic indices published by Centre of Monitoring India Economy (CMIE).<\/p>\n<p>&nbsp;<\/p>\n<p>b)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Publications of market research agencies like NCAER etc.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><span style=\"font-size: 1em;text-align: initial\">c)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Publications of trade and industry federations such as CII, FICCI, ASSOCHAM, NASSCOM, ATMA etc.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><span style=\"text-align: initial;font-size: 1em\">d)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Annual company reports having data relating to balance sheet and profit and loss account.<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p><strong>V.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><strong>Periodicals and Newspapers<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>V1.\u00a0 Industrial Espionage agencies<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p style=\"text-align: justify\">Private agencies provide information and reports on competitors, which may be essential for strategic planning.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>5.\u00a0<\/strong><strong>Methods and Techniques Used for Environmental Scanning<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">There are wide range of methods and techniques available for environmental scanning. Strategists may choose one which suit their needs in terms of the \u2013<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>\u2022\u00a0 Quantity<\/p>\n<p>\u2022\u00a0 Quality<\/p>\n<p>\u2022\u00a0 Availability<\/p>\n<p>\u2022\u00a0 Time lines<\/p>\n<p>\u2022\u00a0 Application\/ Relevance<\/p>\n<p>\u2022\u00a0 Expenditure on getting environmental information<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">Many authors have given various methods and techniques which can be used for environmental scanning. Le Bell and Krasner have outlined 9 groups of techniques:<\/p>\n<p>&nbsp;<\/p>\n<p>1.\u00a0\u00a0\u00a0\u00a0\u00a0 Unstructured expert opinion<\/p>\n<p>2.\u00a0\u00a0\u00a0\u00a0\u00a0 Structured expert opinion<\/p>\n<p>3.\u00a0\u00a0\u00a0\u00a0\u00a0 Single \u2013 variable extrapolation<\/p>\n<p>4.\u00a0\u00a0\u00a0\u00a0\u00a0 Theoretical \u2013 limit envelopes<\/p>\n<p>5.\u00a0\u00a0\u00a0\u00a0\u00a0 Dynamic modes<\/p>\n<p>6.\u00a0\u00a0\u00a0\u00a0\u00a0 Mapping<\/p>\n<p><span style=\"font-size: 1em;text-align: initial\">7.\u00a0\u00a0\u00a0\u00a0\u00a0 Multivariable interaction analysis<\/span><\/p>\n<p><span style=\"text-align: initial;font-size: 1em\">8.\u00a0\u00a0\u00a0\u00a0\u00a0 Structured in expert speculation<\/span><\/p>\n<p><span style=\"text-align: initial;font-size: 1em\">9.\u00a0\u00a0\u00a0\u00a0\u00a0 Unstructured in expert speculation<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p>But the most popular of these are \u2013<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>1)\u00a0\u00a0<\/strong><strong>Structured\/ Unstructured expert opinion <\/strong>\u2013 The opinions of experts in field of business, in related industry, working in similar type of markets can be used for the purpose of environmental scanning. These people have expertise knowledge about the business as they are well aware of the current trends and may also be valuable in predicting future trends of the business e.g. a person who a wants to set up a restaurant may seek opinion of expert in the same business in order to know the prospects of the business. The opinions can be gathered through a structured survey and also through informal talk with the experts. These opinions may help in giving a clear picture of the business environment and also the future trends.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>2)\u00a0<\/strong><strong>Extrapolation <\/strong>\u2013 The statistical technique of extrapolation helps to calculate the future trends from the data of current trends; for instance, a company may use the data of sales of past 10 years to predict the future sale trends.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>3)\u00a0<\/strong><strong>Estimate <\/strong>\u2013 This technique considers the best and worst scenarios the business may have to witness as a result of the changes in its environment. These cases are further used to predict more possibilities and probabilities of opportunities and threats which may occur in near future.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>4)\u00a0<\/strong><strong>Mapping <\/strong>\u2013 Mapping is a tool that tracks the environmental factors to identify that which factors are changing and how much change is there is each of them. Mapping also tries to uncover the rate and trends of change taking place in each factor, as all the factors do not change simultaneously. While, some factors change frequently others remain constant for some time. Thus, mapping defines the direction of changes taking place in environmental factors and also the level of change.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>5)\u00a0<\/strong><strong>Modelling <\/strong>\u2013 In modelling various statistical tools like regression analysis or probability tables etc. are used for future prediction.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">6)\u00a0\u00a0<\/strong><span style=\"text-align: initial;font-size: 1em\">C<\/span><strong style=\"text-align: initial;font-size: 1em\">haos Theory<\/strong> <strong style=\"text-align: initial;font-size: 1em\">\u2013<\/strong><span style=\"text-align: initial;font-size: 1em\"> Chaos theory by Edward Lorenz and Michael Feigenbaum, uses mathematical models, known as chaotic models, to interpret the process of non \u2013 linear and dynamic system.<\/span><span style=\"text-align: initial;font-size: 1em\">The phenomenon of Chaos is observed in a wide variety of processes \u2013 biological, sociological, economic, and meteorological. The applications of Chaos theory in management may range from predicting market behaviour, financial forecasting and anticipating competitive strategies.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">7)\u00a0\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">QUEST Technique \u2013 <\/strong><span style=\"text-align: initial;font-size: 1em\">Quick environmental scanning techniques is a process which analyses various scenarios after scanning the environment and then come out with different strategic options available. The process involves four steps which are \u2013<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p>1.\u00a0\u00a0\u00a0\u00a0 Internal\u00a0 strategists\u00a0 will\u00a0 observe\u00a0 and\u00a0 identify\u00a0 the\u00a0 major\u00a0 events\u00a0 and\u00a0 trends\u00a0 in\u00a0 the<\/p>\n<p>2.\u00a0\u00a0 Speculate on a wide range of important ISSUES that might affect the future of their organization.<\/p>\n<p style=\"text-align: justify\">3.\u00a0\u00a0\u00a0\u00a0 Preparing a report summarizing the major issues and their implications and 3-5 scenarios incorporating the major themes of their discussion.<\/p>\n<p style=\"text-align: justify\">4. Report and scenarios are reviewed by a group of strategists who identify feasible strategic options to deal with the evolving environment.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">After the environmental scanning process is complete, the strategists start to appraise the environment &#8211; called environmental appraisal. It is structured by the preparation of the environmental threats and opportunities profile (ETOP), which involves breaking up the environment in various segments or sectors and predicting the influence of each segment on the business.<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p><strong style=\"text-align: initial;font-size: 1em\">6.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">SWOT Analysis<\/strong><\/p>\n<div>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">SWOT, is an instrumental framework in value based management and strategy formulation to give in-depth information about strengths, weaknesses, opportunities and threats for a particular company \/ organization. SWOT analysis or environmental analysis is a process which enables an organisation to examine its related environment to find out the existing opportunities and threats that may affect its business. It is a process of studying the environment before taking decisions and formulating strategies.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-109 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/1-15.png\" alt=\"\" width=\"407\" height=\"143\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-15.png 407w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-15-300x105.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-15-65x23.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-15-225x79.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-15-350x123.png 350w\" sizes=\"auto, (max-width: 407px) 100vw, 407px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>Possible strengths are \u2013<\/p>\n<ul>\n<li>Name recognition<\/li>\n<li>Proprietary technology<\/li>\n<li>Cost advantages<\/li>\n<li>Skilled employees<\/li>\n<li>Loyal customers etc.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">And weakness is a company\u2019s lack of ability or a situation that acts as a disadvantage for it in comparison to its counterparts. Weakness is an inherent limitation or shortcoming of an organisation, which can lead it to strategic disadvantage; however, weaknesses are areas which are capable of improvement. Possible weaknesses are \u2013<\/p>\n<ul>\n<li>Poor market image<\/li>\n<li>Limited finance<\/li>\n<li>Lack of efficient human resources<\/li>\n<li>Obsolete facilities<\/li>\n<li>Internal operating problems<\/li>\n<li>Poor marketing skills etc.<\/li>\n<\/ul>\n<\/div>\n<div>\n<p style=\"text-align: justify\">An opportunity is a favourable condition in the organization\u2019s environment which enables it to strengthen its position.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">A threat is an unfavourable condition in the business environment that may adversely affect the business and cause damage to the organization. Threats are anything from the environment that can adversely affect its performance or achievement of its goals. Threats can be external or internal, external threats could be inflation, new legislation, or a new competitor in your market while internal threats could include a skill or staff shortage within your organisation.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">The relationships in a SWOT analysis are generally\u2019 represented by a 2&#215;2 matrix, wherein the \u2018Strength\u2019 and \u2018Opportunities\u2019 are both positive considerations while \u2018Weakness\u2019 and \u2018Threats\u2019 are both negative considerations.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\">The matrix identifies the strength, weaknesses, threats and opportunities of a business firm. This formation can be used by the company in many ways in evolving its options for the future. In general, the company should attempt to \u2013<\/p>\n<p>&nbsp;<\/p>\n<p>\u00a7\u00a0\u00a0\u00a0\u00a0\u00a0 Build its strength<\/p>\n<p>\u00a7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Reverse its weakness<\/p>\n<p>\u00a7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Maximize its response to opportunities<\/p>\n<p>\u00a7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Overcome to its threats<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p><span style=\"text-align: initial;font-size: 1em\">The final results of an analysis could be listed in the matrix in given below \u2013<\/span><\/p>\n<div>\n<p>&nbsp;<\/p>\n<p><strong>The SWOT Matrix \u2013<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-112 aligncenter\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/1-16.png\" alt=\"\" width=\"612\" height=\"568\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-16.png 612w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-16-300x278.png 300w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-16-65x60.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-16-225x209.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-16-350x325.png 350w\" sizes=\"auto, (max-width: 612px) 100vw, 612px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p><strong>ROLE AND IMPORTANCE OF SWOT ANALYSIS<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify\"><strong>A.\u00a0\u00a0<\/strong><strong>Identify strengths <\/strong>\u2013 The internal environment analysis identifies the strengths of an organisation. The internal environment includes the resources of the organisation &#8211; physical,\u00a0<span style=\"font-size: 1em;text-align: initial\">financial and human resources for instance \u2013 when a company has superior technology in comparison to its counterparts, it becomes strength for the company.<\/span><\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">B.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Identify weaknesses <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 SWOT analysis also identifies the areas where a company needs improvement and which puts it at a disadvantage in comparison to its competitors. The analysis helps a company to spot such weaknesses and take corrective actions, for instance \u2013 having lesser financial resources can be a weakness and in order to work on this issue the company may have to explore for avenues to raise additional funds.<\/span><\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">C.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Identify opportunities <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 The external environment may have to offer many new opportunities for businesses and SWOT analysis helps a company in recognising them.<\/span><\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">D.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Identify threats <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 With many opportunities, the external environment also leads a company to various threats from competitors, govt. policies, etc. Early identification of such threats helps a company to counter them in future. For instance, the govt. may change the taxation policies which may further affect the costing for the firms; therefore, business firm must take necessary steps to reduce the effect of such changes.<\/span><\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">E.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Effective planning <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 Environmental analysis also helps a firm in planning its future actions and facilitates quick decision-making. The planning exercise must take into account the\u00a0<\/span><span style=\"text-align: initial;font-size: 1em\">internal and external environment and the SWOT analysis enables a firm to make well defined plans.<\/span><\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">F.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Facilitates Organising Resources <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 Environmental analysis helps an organisation to predict the future demand of their products which enables it to organise its resources accordingly. The organisation can plan the requirement of resources to handle the activities of the market.<\/span><\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">G.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Face Competition <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 The environmental analysis helps a firm to identify the strengths and weaknesses of its competitors, which further enables it to counter the strengths of the\u00a0<\/span><span style=\"text-align: initial;font-size: 1em\">competitors and also exploit the competitors\u2019 weaknesses in its favour.<\/span><\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">H.\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">Flexibility in Operations <\/strong><span style=\"text-align: initial;font-size: 1em\">\u2013 As the environment keeps changing, the environmental analysis enables a firm to adjust its operations accordingly.<\/span><\/p>\n<p style=\"text-align: justify\"><strong style=\"text-align: initial;font-size: 1em\">7.\u00a0\u00a0<\/strong><strong style=\"text-align: initial;font-size: 1em\">PESTLE Analysis\u00a0<\/strong><span style=\"text-align: initial;font-size: 1em\">Environmental Scanning is an important component when the business is in Competition.<\/span><\/p>\n<\/div>\n<div>\n<p>&nbsp;<\/p>\n<p><strong>The PESTLE Matrix \u2013<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-118\" src=\"http:\/\/mgmtp03.epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/sites\/68\/2018\/10\/1-17.png\" alt=\"\" width=\"540\" height=\"604\" srcset=\"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-17.png 540w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-17-268x300.png 268w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-17-65x73.png 65w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-17-225x252.png 225w, https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-content\/uploads\/sites\/68\/2018\/10\/1-17-350x391.png 350w\" sizes=\"auto, (max-width: 540px) 100vw, 540px\" \/><\/p>\n<\/div>\n<p><strong>\u00a0<\/strong><\/p>\n<div>\n<p style=\"text-align: justify\">PESTLE analysis involves identifying the political, economic, socio-cultural, technological, legal and environmental influences of an organization or policy in the past, and how they might do so in future. The advantage of this tool is that it encourages management into proactive and structured thinking in its decision making.<\/p>\n<ul>\n<li style=\"text-align: justify\">Like the SWOT analysis, the PESTLE analysis is also simple, quick, and uses four key perspectives. PESTLE analysis, has its origins in the PEST analysis, which involves identifying the political, economic, socio-cultural and technological influences on an organization.<\/li>\n<li style=\"text-align: justify\">The PESTLE analysis is used to provide a context for the organisation&#8217;s \/ individual&#8217;s role in relation to the external environment (mainly macro and mega environment).<\/li>\n<li style=\"text-align: justify\">Depending on which elements are included it can also be referred to as STEP, STEEP, PESTEL, PESTLE or LEPEST.<\/li>\n<li style=\"text-align: justify\">Recently it was even further extended to STEEPLE and STEEPLED, including education and demographics.<\/li>\n<li style=\"text-align: justify\">PESTLE is useful before SWOT &#8211; not generally the other way round as it helps to identify SWOT factors.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>8.\u00a0<\/strong><strong>Pitfalls in Environmental Scanning<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>Few pitfalls faced while using environmental scanning can be \u2013<\/p>\n<ul>\n<li style=\"text-align: justify\">Increased focus of planners on relevant environment of the business organisation may sometimes lead to avoidance of the events taking place in the general business environment that may affect the business.<\/li>\n<li style=\"text-align: justify\">Environmental scanning may lead to increased information inflow for the organisation creating an information overload which may further delay timely actions, thus leading to paralysis by analysis.<\/li>\n<li style=\"text-align: justify\">The purpose of environmental scanning is to uncover influences that matter for the future of the organisational strategic decision-making. This purpose should not be lost and environmental scanning should not be used for purposes other than this.<\/li>\n<li style=\"text-align: justify\">Environmental scanning function should not be integrated too closely with operational and functional activities of the organisation.<\/li>\n<li style=\"text-align: justify\">Environmental should not be too far from realities of the organisation, making it impersonal, staff function.<\/li>\n<\/ul>\n<\/div>\n<div>\n<p style=\"text-align: justify\">After the scanning process is complete, the strategists have to give structure to the huge information available. They have to filter the information in such a manner that a clear picture of opportunities and threats operating in different sectors emerges and can be utilised by the organisational benefits.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>9.\u00a0<\/strong><strong>Summary<\/strong><\/p>\n<ul>\n<li style=\"text-align: justify\">Environmental scanning refers to studying both internal as well as external environment and analysing its impact on the business opportunities.<\/li>\n<li style=\"text-align: justify\">Environmental Scanning provides a broader perspective to the management and planning department to formulate plans and strategies.<\/li>\n<li style=\"text-align: justify\">The environmental scanning process enables an organisation to analyse the influence which various situations and changes in the environment exert on its strategic management process.<\/li>\n<li style=\"text-align: justify\">Environmental Scanning is essential because environment has a major affect on the effectiveness of business strategies, helps to anticipate the changes, gives time to the company to get adjust to the changed environment and gives advance warning or danger signals of the adverse changes in environment.<\/li>\n<li style=\"text-align: justify\">Environmental Scanning can be done by following different approaches viz. systematic approach, ad-hoc approach and processed-form approach.<\/li>\n<li style=\"text-align: justify\">Environmental scanning requires information to be analysed and the sources of information may be formal or informal, written as well as verbal and external or internal.<\/li>\n<li style=\"text-align: justify\">A wide range of methods and techniques can be adopted for environmental scanning. Strategists may choose one caters to their requirements on factors like quantity, quality, availability, time lines, relevance and cost of environmental information.<\/li>\n<li style=\"text-align: justify\">SWOT analysis is a systematic approach to find the strengths, weaknesses opportunities and threats relating to an organisation and its environment.<\/li>\n<li style=\"text-align: justify\">In the SWOT analysis, \u2018SW\u2019 stands for strengths and weaknesses while \u2018OT\u2019 stands for opportunities and threats. Strengths and weaknesses are internal to an organisation whereas the external environment creates opportunities and threats for the business. SWOT analysis helps an organisation to find out its positive and negative points.<\/li>\n<li style=\"text-align: justify\">PESTLE analysis involves identifying the political, economic, socio-cultural, technological, legal and environmental influences of an organization or policy in the past, and how they might do so in future.<\/li>\n<li style=\"text-align: justify\">PESTLE analysis encourages management into proactive and structured thinking in its decision making.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<\/div>\n<table>\n<tbody>\n<tr>\n<td><strong>you can view video on Environmental Scanning and Approaches<\/strong><\/td>\n<td><a href=\"https:\/\/youtu.be\/MsDRWeUenjk\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-120\" src=\"http:\/\/epgpbooks.inflibnet.ac.in\/wp-content\/uploads\/2018\/11\/download.png\" alt=\"\" width=\"36\" height=\"36\" \/><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"author":3,"menu_order":7,"template":"","meta":{"_acf_changed":false,"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-99","chapter","type-chapter","status-publish","hentry"],"part":3,"_links":{"self":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters\/99","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":6,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters\/99\/revisions"}],"predecessor-version":[{"id":630,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters\/99\/revisions\/630"}],"part":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/parts\/3"}],"metadata":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapters\/99\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/media?parent=99"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/pressbooks\/v2\/chapter-type?post=99"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/contributor?post=99"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp03\/wp-json\/wp\/v2\/license?post=99"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}