Environmental Scanning Case Study

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2.2.4 Environmental Scanning Before doing the strategy formulation, it is very important for any organisation to scan the external environment for the possible opportunities and threats. This part of the unit is concerned with the methods and techniques that the organisations use to examine their relevant environment and to collect data to identify opportunities and threats affecting their business. Environmental scanning refers to the process by which organisations monitor their environment and gather data to obtain information about opportunities and threats affecting their business with intent to making strategic decisions. (i)Factors to be taken into account for Environmental Scanning The external environment of an organisation encompasses…show more content…
• Systematic Approach: Systematic approach is concerned with systematically obtaining information for environmental scanning. This approach involves constantly updating information related to markets and customers, changes in legislation and regulations that directly affect the business of an organisation, government policy statements with regard to the business of the organisation, etc. so as to monitor changes and consider the relevant factors. This continuous process of bringing such information up to date is crucial for strategic management as well as operational activities. • Ad hoc Approach: Ad hoc approach is concerned with occasionally conducting special surveys and studies to take care of specific environmental issues. Usually, organisations use this approach when they need to undertake special projects, assess the current strategies or develop new…show more content…
Therefore, organisations use different practical combinations or approaches for environmental scanning. These approaches that organisations adopt may range from the informal way of monitoring the environmental factors to a highly systematic and formal way. The infor¬mal way of monitoring is taken as a reactive measure to a crisis and ad hoc studies may be conducted from time to time. A highly systematic and formal way of monitoring environmental factors may be adopted as a proactive measure expecting changes in environmental factors and structured data compilation and processing method may be used continuously. Based on varying degrees of concern for the environment, organisation may take different positions between the two extremes of the informal and formal approaches. Organisations may use systematic and ad hoc approaches for the relevant environment; they may adopt the processed-form approach for the relevant and the general environ¬ment. No matter what approach is used for environmental scanning, data collection is essential for deriving information about environmental factors or

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