ENVIRONMENT SCANNING
* MEANING :
It is a process of gathering information about event and there
relationship with internal and external environment
scanning is to find out the future prospects business
organisation.
* DEFINITION :
The process of collecting, evaluating and delivering
information for a strategic purpose is defined as environment
scanning.
The process of environment scanning both accurate and
personalized data on the business environment, in which the
organisation is operating or considering entry.

COMPONENT OF ENVIRONMENT SCANNING

• Internal Environmental Component
• External Environmental Component
• Internal Environmental Component : The company that lie with in the organisation
are internal component and changes in these affect the general performance of the
organisation.
For example : HR , Capital Resources andTechnological Resources are some of the
internal environmental component.
• External Environmental Component : The component that fall outside the business
organisation are called external environment component. Although, the component lie
outside the organisation, they still affect the organisation activities.
The external environmental component are divided into two parts :
• Micro Environment Component
• Macro Environment Component
COMPONENT OF ENVIRONMENT SCANNING

• Micro Environment Component: It includes competitors, consumers, markets,
suppliers, organisation etc.
• Macro Environment Component: It includes economic, political, legal, socio-culture,
technological demographic factors etc.

• Economic Environment
It means all external economic factor that
influence buying habits consumers and businesses
and therefore affect the performance of a
company.These factors are often beyond a
company control and may be either large scale
(macro) and small scale (micro).
• Macro factors :
• Income
• Inflation
• Tax rate
• Currency exchange rate
• Micro factors :
• Size of available market.
• Demand for company product’s and services
competition.
• Availability and quality of suppliers.

Legal Environment
It is based on a set of conditions and those are social,
legal, political, economical, and institutional
comditions. Akl of them based opn two differentt
position and that are internal and external
environment .
• Internal Environment :
• It includes manpower, capital, machinery, raw
material, and the last but not least is the
management.
• Generally controlled by business internally.
• External Environment :
• These factor are beyond the control of a certain
enterprise.
• Govt. Policies, tax, legal factor, polotical factor,
social events, economic function and also
geographical factors are main external factor of
the business .

Social Environment :
• These factors includes traditional,
values, social trends, level of education
the standard of living etc. All these have
a vast impact of the business.
• Impact – more demand during festival
provide opportunity for various
business.
• Values – moral principle prevailing in the
society such as freedom of choice in
market , social justice. Equally of
opportunity, non – discriminatory
practices etc.

Technological Environment
• It consists of scientific improvement and
innovation which provides new ways to
producing goods, rendering services, new
methods and techniques to operate a
business.
• It is very important for a firm to understand
the level of scientific achievement of a
particular economy before introducing its
products.
• Example : E-commerce has changed the
scenario of doing the business, buying goods
and availing services at the click of a mouse
or through mobile.

Political Environment
• It means that actions which were take by
government and potentially affect the routine
activities of any business or company on a
domestic or at the global level.
• The success of the business and industry
depends upon the government attitude
towards the business and industry stability of
government and peace of the country.
• Example : Political stability and central
government attitude towards business
industry and employment has interacted many
national and international business
entrepreneur to invest in India.

ETOP
• It helps an organisation analys the impact of
environment based on threat and opportunity.
• Steps involves in the preparation of the ETOP dividing
the environment into different sectors :
• Analysing the impact of each sector on the
organisation.
• Sub-dividing each environment factor into sub-factor
for a comprehensive ETO.
• Analysing the impact of each sub-factor on
organisation in the firm of a statement.
• Preparing a summary to show the major factor for the
sake of simplicity.

QUEST
• This technique is design to analyse the environment quickly and
inexpensively. So, that business can focus on critical issue that
have to be addressed in a short span.
• QUEST is a systematic as well as intensive process.
• QUEST are four types :
• Discovery
• Practice
• Design
• Reflection.
• The process of environment scanning start with the observation
of the organisation events and trends by strategist.
• After observation important issue that which have may impact
the organisation are considered using organisation appraisal.
• A report is created by making a summary of these issues and
their impact.
• In final steps, planners who are responsibility for deciding the
feasibility of the proposed strategy review report.

SWOT
• It is an ecronium for strength, weakness, opportunities and threats analysis of the
environment.
• Strength and weakness are considered as internal factor where as opportunities
and threats are considered as external factors.
• These factors determined the course of action to ensure the growth of the
business.
• STRENGTH : Internal attributes and resources that support a successful outcomes.
• WEAKNESS : Internal attributes and resources that work against a successful
outcomes.
• OPPORTUNITIES : External factor that the entity can capitalise on or use to ist
advantages.
• THREATS : External factor that could geoparadize the entity success.

ORGANISATIONAL CAPABILITIES
The factors which are strategic strength and
weakness in different functional area with in
organisation which are crucial importance to
strategic formulation and implement.
These are divided into six largely accepted and
commonly understood functional areas.
• Financial Capability
• Marketing Capability
• Human Resource Capability
• Operational Capability
• Information Capability
• General Management Capability

FINANCIAL CAPABILITIES
• These factor is relatedvto source , uses and
management of fundsTypical strength that
support financial capability are assessed to
financial resources (reserve).
• Amicable relationship with financial
institutions (Bankers).
• High level of credit worthiness, efficient,
capital budgeting system low cost of capital
as compare to competitors.
• High level of shareholder and confidence
(reliance).
• Effective manager control system (Birla
group)
Tax benefits due to various govt. policies.

MARKETING CAPABILITIES
The factor is related price, promotion, product and place and
integrating and systematic aspect.
• Typical strength that support marketing capability are
wide variety of products (PNG and Hindustan Lever).
• Better quality of products (Toyota and sony)
• Sharply focused position ( Amway and tupperware HDFC)
• How pricing to similar product (Walmart)
• Price protection due to govt. policy. (Farm produced
global)
• High quality customer service (Fedex)
• Effective distribution ( Bisleri )
• Effective sales promotion (Tata salt and Swaach bharat)
• High profile advertising ( Mercedes , Rolex)
• Favourable company product image (TATA and GE)
• Effective MIS (Coke)

OPERATIONAL CAPABILITY
These factors related production system, operation
and control system and related to the research and
development and new product development system
typical strength that supports operation capability
are :
• High level of capacity utilisation express.
• Reliable sources of supply effective : Wallmart,
Toyota’s andTata motors.
• High level calibres.
• Technological collaboration with reputed firm with
other companies :Toyota

HUMAN RESOURCE MANAGEMENT
HR capability related to personal system
organisational and employee
characteristics and related to industry
relation.
Typical strength that support capability are
genuine concern for HRM and development:
• Efficient and effective HR system (Tata
steel)
• Organisation perceived as a fair and a
model employee ( infosys)
• High level of organisation loyalty (TCS)
(Foreign banks)

INFORMATION CAPABILITY FACTOR
It related to the acquisition and retention of
information retrieval usage transmission and
dissemination of information. Also, the factors related
to the integrative systematic and supportive elements.
Typical strength that support the information.
Marketing capability are ease and convenience of
access to information system and access availability to
employee, customer suppliers etc.
• Widespread usage of computerized information and
operability of high tech equipment.
• Positive attitude sharing and dissimating
information.
• Proof information security system top management.
• Understanding of and support to its application.

BALANCE SCORE CARD (BSC)
Identifying and improve various problem.
The term BSC is refer to the SM performance
metric used to identify and improve various
internal business function and their resulting
external outcomes.
• Used to measure and provide feedback to
organisation.
• BSC are common among companies and UK,
Japan, and Europe.
• Data collection is crucial to providing
quantitative results as manager executive
gather and interpret information.
• Company personal can use these information
to make better decision for the future of
there organisation.

CRITICAL SUCCESS FACTOR ( CSF)
Critical Success Factor also known as key success
factor are condition that a team or organisation
must meet for a company overall business strategy
to be successful. For Example :
• A company strategic goal is to increase market
share to help them reach this goal, they identify
increase brand loyalty as a CSF. CSF‘s are often
supported by key performance indicators(KPI’s)
metric that help determine the success of a
project.
• In this example a KPI could be making the brand
more recognisable and gaining new customer
through strategic marketing campaign KPI
support CSF.Which in turn support the company
strategic goals.

IDENTIFICATION OF CRITICAL SUCCESS FACTOR
There is how to identify critical success factor for your
business.
• INITIATE STRATEGIC PLANNING : Before you
can find your critical success factors, you need a
strategic plan. A strategic plan outlines where your
organisation hopes to go and how it will get there.
The lead strategic planner, be it a project manager or
chief executive business strategy.
• IDENTIFY KEY RESULT AREA : Key Result Area
are broad generalized goals for your organisation
management team populated by key stakeholder to
determine the KRAs. Some example of KRAs includes
profitability, efficiency, customer satisfaction etc.

• DETERMINE YOUR SUCCESS CRITERIA :Once
you have established your KRAs and have a strategic
plan in place, you are ready to determine your critical
success factor including increase marketing share.
Attracting new customer or launching new product.
Once you have determined your CSFs you can set key
performance indicators which will establish
deliverable and specific criteria to measure project
performance.
• TRACK AND MEASURE YOUR PROGRES : With
your CSFs and KPIs established, you can ready to
begin working towards meeting your goals. Set up a
performance management process for measuring
success to ensure that the project team stays on