Environmental analysis

1. ENVIRONMENTAL ANALYSIS and forecasting ANJU RAJ S4 MBA, MACFAST COLLEGE, TIRUVALLA

2. Definitions Environment : It refers to all external forces which have the bearing on the functioning of BUSINESS. Analysis : It refers to detailed study or examination of something in order to understand more about it. Environmental Analysis : Scrutinizing of the external forces which have the bearing on the functioning of the BUSINESS..

3. WHY ENVIRONMENTAL ANALYSIS ? Analysis of the environment makes the business aware of the threats & opportunities in the environment.

4. Stages of Environmental Analysis Scanning Monitoring Forecasting Assessing

5. Environmental scanning ‘the study and interpretation of the political, economic, social and technological events and trends which influence a business, an industry or even a total market’.   It helps the managers to decide the future path of the organization. Scanning must identify the threats and opportunities existing in the environment.

6. Environmental monitoring Focused & systematic in-depth analysis of relevant environmental trends. Gather data to determine emerging patterns  Outputs of monitoring : Environmental patterns to be forecast Trends for further monitoring Patterns requiring further scanning.

7. Environmental forecasting Environmental forecasting involves the development of plausible projections about the direction, scope, speed, and intensity of environmental change. Estimating the intensity, nature, and timing of the external forces  that may effect the performance of a firm, disrupt its plans , or force a change  in its strategies.

8. Environmental assessing  Assess/Evaluate the impact on organization's business . It involves drawing of possible impacts of the environmental changes on the organization.

9. Approaches to environmental analysis Inside-out (micro) – narrow view of environment, forecast the immediate future environment Outside-in (macro) scenario analysis – broad view of BE, long term perspective, develop alternative scenarios

10. Steps in environmental forecasting Identification of relevant environmental variables Collection of Information Selection of Forecasting Technique Monitoring

11. Types of forecasting Economic Forecast Social Forecast Political forecast Technological forecast

12. Uses of environmental analysis The environmental analysis makes one aware of the environment-organization linkage. It helps an organization to identify present and future, threats and opportunities. It helps to understand the transformation of the industry environment. It contributes in identification of risks. It helps in formulation of strategies. It keeps the manger informed, alert and dynamic.

13. Thank you