The document discusses environmental scanning, which is the process organizations use to monitor opportunities and threats in their business environment. It identifies the key factors of events, trends, issues, and expectations that affect scanning. There are three approaches to scanning: systematic, ad-hoc, and processed form. Environmental scanning involves both external and internal analysis. External analysis uses PEST (Political, Economic, Social, Technological) and five forces frameworks to understand the macro and micro environment. The purpose of environmental scanning is to help management determine the organization's future direction.

1. Presented by: VIDYA.V
Roll No: 83
S1 MBA

2. ENVIRONMENTAL SCANNING

MEANING
The process by which organizations monitors their
environment to identify opportunities and threats
affecting their business, is known as environmental
scanning.

3. PURPOSE
The basic purpose of environmental scanning is to help
management determine the future direction of the
organization.

4. Factors affecting environmental scanning
EVENTS
 TRENDS
 ISSUES
 EXPECTATIONS


5. EVENTS
Important and specific occurrences that taking
place in a certain sector . Past events of
business environment is the important factor of
business environment.

6. TRENDS
The general tendencies of courses of action
along which these events take place. Not to just
see the past events are defective but to establish
the trends on the basis of events is also very
important factor of business environment
scanning.

7. ISSUES
The current concerns that arise in response to
events and trends. As a businessman, have to
scan both cold and burning issues on daily
basis.

8. EXPECTATIONS
The demand made by interested groups in the
light of their concern for issues.

9. Three approaches to scanning

Systematic : Information related to markets &
customers , changes in legislation &regulations that
have a direct impact on organization’s activities that
could be collected continuously to monitor changes.

Ad-hoc: Conduction of special surveys & studies to
deal with specific environmental issues.

Processed form: information available from
different sources both internal & external of the
organization in processed form.

10. Environmental scanning
External analysis
Macro environment
PEST analysis
Internal analysis
Micro environment
Five force analysis

11. A scan of the external macro-environment in which the
firm operates can be expressed in terms of the following
factors:
Political
Economic
Social
Technological
The acronym PEST (or sometimes rearranged as
"STEP") is used to describe a framework for the
analysis of these macro environmental factors.

12. Political Factors include government regulations
and legal issues and define both formal and informal
rules under which the firm must operate
Economic Factors affect the purchasing power of
potential customers and the firm‘s cost of capital.
Social factors include the demographic and cultural
aspects of the external macro environment. These
factors affect customer needs and the size of potential
markets cost of capital.
Technological Factors can lower barriers to entry, reduce
minimum efficient production levels, and influence
outsourcing decisions.

13. A scan of the external micro-environment in which the
firm operates can be expressed in terms of five force
analysis.
FIVE FORCE ANALYSIS





Threat Of New Entrants
Threat Of Substitutes
Bargaining Power Of Buyers
Bargaining Power Of Suppliers
Rivalry Among Existing Firms

14. CONCLUSION
Environmental scanning is one essential component of
the global environmental analysis. Environmental
scanning can be defined as ‘the study and interpretation
of the political, economic, social and technological
events and trends which influence a business, an
industry or even a total market’.