Transcript Environmental Scanning

Get the 411
Environmental Scanning
Information
Management
LAP 2
Objectives
Explain the purpose of environmental
scanning.
Demonstrate procedures for conducting an
environmental scan.
Objective
Explain the purpose of
environmental scanning.
• Sonny’s product:
 A fun, humorous SAT
study guide
 Something to keep
students’ attention
• CDs are selling poorly.
• Students wanted to buy it
online!
• Sonny failed to scan the
environment.
Environmental Awareness
• The
Howterm
does“environment”:
it affect your ability to
concentrate
and
your
 Often used
to perform
refer to the
earth
workand
successfully?
its resources
 Can also exist
simply
refer to
• Businesses
within
surroundings
environments,
too.
• What
environment
areisyou
 How
they respond
a critical
currently
factor in?
for success.



Classroom?
They
must be “mindful of the
environment.”
Library?
To
do so, they use
Bedroom?
environmental scanning.
Environmental Scanning
• Environmental scanning—three-step
process in which businesses:
 Gather information about their
surroundings
 Analyze that information
 Determine the future impact of that
information
Environmental Scanning
• What might happen if you weren’t
aware of your surroundings?
 You could miss a potential threat,
such as:
 A pothole
 A pick-pocket
 You could miss a potential
opportunity, such as:
 A sign for soccer try-outs
 An empty chair next to someone you
want to talk to
Environmental Scanning
• Being aware of threats and
opportunities—and knowing their
potential impact—helps a business
with:
 Strategic planning
 Management decision making
Environmental Scanning
• A business cannot control its
external environment.
• But, it can control its internal
environment to meet upcoming
threats and opportunities.
Environmental Scanning
• Internal environment:
 Finances
 Personnel
 Research and development
 Production
 Marketing
Environmental Scanning
• A business’s environment is always
in flux (changing).
 It is faced with a choice—adapt
or fail.
 To adapt successfully, it relies on
environmental scanning.
Categories of Information to Scan
• Demographics
 The
Markets,
physical
like individuals,
and social have
characteristicscharacteristics.
demographic
of the population
 Examples:
Businesses must pay close
 Age
attention
to them so that
 Gender
they
can identify trends in
 Income
demographic
data.
 Employment status
 Current
trends in the U.S.:







Family status
Aging of the population
Education
Increased populations of
Geographic location
minority groups
Religious affiliation
Race/Ethnic origin
Categories of Information to Scan
• Society and culture
 What do customers value?
 What are their attitudes toward
the world around them?
 Our society is transforming at a
rapid rate.
 Successful businesses stay on
top of changes so they can
remain sensitive to customer
needs and wants.
Categories of Information to Scan
• Society and culture
 Examples of social trends that
affect business decision making:
 Concern
Need for convenience
for
fitness
and health—
Changing
family
roles:
 affected
People
are
busier
thanin
ever.
More working
moms
has
businesses
all
 Customers
often willing to
More singleare
parents
industries
more
for products
that
save
 pay
More
two-income
households
 Going
“green”—customers
are
or fit
into their
hectic
 them
More time
diverse
attitudes
about
concerned
about
the
environment
schedules.
what a family is
but also
about their wallets
 Examples:
More diverse attitudes about
 Frozen
dinners
roles
within
families
 Drive-thrus
 24-hour gyms
Categories of Information to Scan
• The economy
 Greatly
Economic
affects
factors
businesses
included and
in an
the decisions they
environmental
scan:
must make to
 Stagecustomers
of the business
cycle
satisfy
and remain
(prosperity, recession,
profitable







recovery, etc.)
Inflation
Interest rates
Unemployment rates
Investor confidence
Tax rates
Currency exchange rates
Foreign economic conditions
Categories of Information to Scan
• Competition
 Brand
General
competition
competition—competition
 Competition
between two
similar
among
all businesses
for scarce
productsdollars
customer
 Example—Nike basketball shoes
vs. Adidas basketball shoes
 Competition for substitute
products
 Competition between two
different products that
satisfy the same need
 Example—movie
theaters vs.
bowling alleys
Categories of Information to Scan
• Government
 Political factors to scan:
 Changing
Monetary and
lawsfiscal
and regulations,
policies
such as:
 Import/export
restrictions and
 Minimum-wage laws
regulations
 Environmental-protection
 Government
relations with laws
 Worker-safety
specific
industrieslaws
(Example:
subsidies for agricultural
businesses)
 Marketing-specific legislation
 State and local laws
 Political climates and stability in
foreign markets
Categories of Information to Scan
• Technology
 Perhaps the most rapidly
changing category of
information
 Falling behind on
technology has been the
downfall of many
businesses.
 High-tech businesses aren’t
the only ones that need to
monitor technology.
Reminders About Information Categories
• All of these factors are dynamic, changing all the time.
• All of these factors are interrelated, affecting each other.
• Each business has a unique relationship with its
environment— certain factors and trends affect some
businesses and industries more than others.
Objective
Demonstrate procedures
for conducting an
environmental scan.
How to Conduct an Environmental Scan
• Step one: Identify participants
and responsibilities.
 Who
In some
willcases,
participate in
responsibilities
may be
environmental scanning?
 more
What formal:
specific tasks will they
 Conducting
market
be
responsible
for? research
for an
 Onora arranging
certain level,
alloutside
firm to do should
so
employees
participate.
 Creating or maintaining a
 Everyone
should be aware of
database to organize relevant
the environment and how it
environmental information
affects:
 Heading up efforts to make


The
business
contact
with customers and
Her/His
particular job
gather information
from them
How to Conduct an Environmental Scan
• Step two: Carry out scanning
activities.
will
from
 Activities
Focus only
onvary
what’s
business to business.
relevant—avoid
information
 overload.
Some tools you can use to
gather information:





Surveys
Questionnaires
Focus groups
Informal conversations
Newspapers, magazines,
trade journals
 Television news and
programming
 Market research studies
How to Conduct an Environmental Scan
• Step three: Identify and analyze
important issues and trends.
Information
gathered
only
 Ask
Determine
criticalwhether
questions,
oris
not
such
theas:
 How
this trend
affect
useful
business
knows
how
trend
isifdoes
an
important
one
for
demand
for our goods
or
it affects
strategic
planning
your
business.
services?
and
decision making.
 How
this trend
 Look
at does
information
andaffect
our business’s
ability to
identify
specific trends:
 compete?
May be identified for you
 How
critical
is this trend to
(Census
Bureau)
organizational
 long-term
May have to
draw
success?
conclusions yourself
How to Conduct an Environmental Scan
• Step four: Report results or
select issues and trends to
act on.
 Not all trends can be
addressed immediately or
all at once.
 A business must prioritize
trends in its strategic
planning.
How to Conduct an Environmental Scan
• Step five: Scan on a continuous basis.
 It’s not a one-time activity, or even a
once-a-year activity.
 It must be conducted on a continuous
basis since the environment is dynamic
and new trends can arise at any time.
 Scanning on a continuous basis allows
your business to:
 Act quickly
 Take advantage of opportunities before
competitors do
 Respond to threats before they can
cause damage
• Sometimes, businesses attempt to
influence their external environments.
• They might lobby the government for
changes in laws that affect them or
their industries.
• They might contribute to campaign
funds for political candidates who are
on “their side.”
• Some people think it is unethical for
businesses to involve themselves in
government this way.
• What do you think?
MBAResearch
Acknowledgments
Original Developers
Christopher C. Burke,
Sarah Bartlett Borich, MBAResearch
Version 1.0
Copyright © 2010
MBA Research and Curriculum Center®
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