Environmental scanning is the process through which an organization gathers, analyzes, and interprets information from the internal and external environment to identify potential opportunities and threats that could impact its strategic decisions.
🔶 1. Process of Environmental Scanning
1.1 Identify Scope and Need of Scanning
Organizations first determine why they need to scan the environment and what areas they want to focus on, such as economic trends, competitors, technological changes, or customer behavior. This step ensures that the scanning is goal-oriented and relevant.
1.2 Determine Sources of Information
Once the scope is clear, organizations identify various sources of data such as government reports, industry publications, news articles, market research, internal data, or expert opinions.
1.3 Acquisition of Information
In this step, information is collected systematically from selected sources using tools like surveys, interviews, online databases, and observation. The goal is to ensure the data is reliable and relevant.
1.4 Determine Techniques of Scanning
Organizations choose appropriate techniques to analyze and interpret the information. These could include SWOT analysis, PESTLE analysis, competitive intelligence, or scenario planning.
1.5 Information Assessing and Evaluating
The collected data is then assessed and evaluated based on accuracy, relevance, consistency, and impact. This helps in filtering useful insights from irrelevant noise.
1.6 Dissemination of Information
The useful findings are shared with the right people within the organization—such as strategic planners or top management—through reports, presentations, or dashboards.
1.7 Organization and Storage of Information
Finally, all the gathered data and insights are stored systematically for future use, enabling continuity in strategy development and quick access to historical data when needed.
🔶 2. Techniques of Environmental Scanning
▪️ SWOT Analysis
This technique helps identify Strengths, Weaknesses, Opportunities, and Threats of an organization, providing a balanced view of internal and external environments.
▪️ PESTLEG Analysis
PESTLEG stands for Political, Economic, Social, Technological, Legal, Environmental, and Global factors. It is used to assess the macro-environmental factors influencing the organization.
▪️ Competitive Intelligence
This involves systematically gathering information about competitors’ strengths, strategies, market position, and customer base to make informed decisions.
▪️ Marketing Intelligence
This focuses on market trends, consumer preferences, pricing strategies, and product demand to guide marketing strategies and product development.
▪️ Scenario Planning
This technique involves creating multiple future scenarios based on possible changes in the external environment, helping businesses prepare for uncertainty.
🔶 3. Methods of Environmental Scanning
▪️ Extrapolation Method
This method projects past trends into the future assuming that historical patterns will continue.
▪️ Intuitive Reasoning
Based on experts’ judgment and experience, this method uses gut-feelings and logical reasoning rather than data.
▪️ Scenario Building
Involves constructing different possible future situations and planning organizational responses accordingly.
▪️ Cross Impact Matrix
This technique evaluates how one event may influence the likelihood of other events happening, helping in better strategic planning.
▪️ Morphological Analysis
This is a systematic approach for exploring all possible solutions to a complex problem by combining different attributes or factors.
▪️ Delphi Technique
A structured group communication process where experts provide opinions in multiple rounds to reach a consensus on future trends.
▪️ Survey Method
Organizations collect opinions or feedback from customers, employees, or other stakeholders to understand the current and future environment.
▪️ Brainstorming
A group creativity technique used to generate new ideas and explore different perspectives on environmental trends.
▪️ Historical Analogy
In this method, past events are used to draw parallels and predict future outcomes.
🔶 4. Types of Environmental Scanning
▪️ Concentrated Scanning
This type of scanning focuses on specific environmental factors or a single issue. It is used when an organization wants to monitor a particular trend or competitor closely.
▪️ Comprehensive Scanning
Comprehensive scanning involves observing the entire environment, including political, economic, social, technological, and legal aspects. It provides a holistic view of all potential factors that might impact the organization.
