Environmental Scanning & Analysis in Organization | Report Writing Example
The following report includes the discussion about the term environmental scanning within the organizations and their benefits which the organization realizes by performing the scanning. The report also includes the several advantages which the organizations have by performing the environmental scanning from time to time. A conclusion has also been done at the end of the report in order to have the facts and figures related to the topic under discussion.
Environmental Analysis or Scanning
Organizational environment consists of both the internal and external factors of the business. Environment can be scanned in order to determine the development and forecasts of the several internal and external factors that influences the organizational success in long term. Environmental scanning refers to the utilization and the possession of the information about the several occasions, trends, patterns and relationship of the organization with these internal and external factors. This scanning aids the managers of the organizations in deciding the future path of the organization. Scanning helps in analyzing the threats and opportunities that exists in the external environment. Environmental scanning includes the internal and external analysis (Kotler 2003).
Internal analysis includes the analysis of the internal organizational factors; this mainly includes the analysis of the management, employees, creditors, suppliers, shareholders and stake holders, organizational structure, operational potential and access to natural resources and so on. Analysis of the internal environment provides the organization with the information in which it is lacking and the factors that needs to be improved for attaining the competitiveness in the business environment (Talloo 2007).
External environmental analysis portrays the analysis of the industry and the external factors that helps the organization in gaining the level of competitiveness and position in the industry. External environmental analysis includes the analysis of the political, legal, social, technological and economic environment or factors.
Advantages of environmental Scanning
There are several advantages and benefits organizations gain from the environmental scanning of the organizations. This can be explained by using several points and this has been explained below:
Information and data for strategic planning
Environmental scanning provides ample information to organization, which aids them in strategic planning for facing future challenges and difficulties. This information’s helps the managers in taking several strategic decisions. A successful strategy can only be developed by the organization when they are aware of the coming circumstances and the position of the industry which brings them the competitive advantage. Sustainable competitive is achieved by the organizations only when they have resources that will be required to face competition and this can only be judged when the organizations have performed the environmental scanning of the environment it is operating or planning to operate into (Sekhar 2009).
Identification of new and lucrative opportunities
The key purpose of the environmental scanning is to detect the business opportunities and forecast the demand for the organization product and services in the market place. It is vital for the organizations to analyze the market dynamics in order to have the idea of the expected demand for the organization products and services. Availability of the environment information helps the organizations in analyzing the factors that can impact the organization in future and also the opportunities which may arise in the market due to the changes in the factors that may impact the industry or organization. The availability of the information helps the organization to prepare itself to face the challenges and grab the opportunities and create competitive advantage for itself and beat competition (Sekhar 2009).
Executive development and stimulation
Executive level planning must be done based on the facts and data rather than based o whim. This is vital as this not only aids the organizations but also portrays a professional image of the company and keeps the executive taking decision in tune with the market activities. It also helps the decision maker who is liable for taking decisions to measure their performances with respect to the prevailing competition. The executive development also comes in place by the environmental scanning as this helps the organization in analyzing the skills required to meet the current level of performance required in the industry to make the organization competitive (Davis 2008).
Monitoring of the fashion and market trends
The success and failure of any strategic decisions depends on the quick reactions of the organization to the changing market trends and the requirements of the market forces. It is vital for the organizations to analyze the changing trends of the market so that they can easily make proactive actions apart from making reactive actions after the happing of any event or actions. Environmental scanning increases the performance of the organization and meet the changing needs of the customers and make the organization proactive in monitoring, predicting and responding to the market trends and actions. The knowledge or idea of the factors that are going to happen in the coming period makes the organization active and plan for the coming period in advance and make competitive strategy to face such challenges.
Monitoring the business environment
The environmental scanning aids the organizations in several ways and one of the factors is that it benefits the organization to monitor the dynamic business environment and it is vital for the organizations to understand the market in order to face the challenges and avail the opportunities prevailing in the market. The changes in the environment of the business like the legislative changes, cultural changes, technological changes, economic changes all have bearing on the business and its activities, scanning’s helps the managers to analyze such changes and face them in an effective and efficient manner (Davis 2008).
From the above analysis of the environment of the business and the scanning it can be said that the environmental scanning is highly beneficial for the organizations operating in this competitive business environment. It can also be concluded that the scanning of the business environment helps the organizations to strategically plan their actions for the future activities and keep themselves competitive in the business environment.
Davis, J.R. 2008. Does Environmental Scanning by Systems Integration Firms Improve Their Business Development Performance. ProQuest.
Kotler, P. 2003. Marketing Management: International edition. USA: Prentice Hall Marketing.
Sekhar, G.V.S. 2009. Business Policy And Strategic Management. I. K. International Pvt Ltd.
Talloo. 2007. Business Organisation And Management. McGraw-Hill Education