Environmental analysis process

Environment analysis is managerial decision making based on the assessment of opportunities and threats in the environment.
The step in environmental analysis are :
1)Scanning :It involves information gathering for assessing the nature of the environment in terms of uncertainly,complexity and dynamism it :

• Identifies early signs of future environmental changes.They are indicated by trends and events.
• Detects changes already underway.They are happening.

2)Monitoring :It involves tracking environmental trends and events.It is auditing of environment.The likely impact of environmental influences on business performance are identified.

3)Forecasting :This step forecast what is likely to happen.It lays out of path for anticipated changes. This step provides:

• Key force at work in the environment.They can be politicalegal,economic,social cultural,technological.
• Understanding of the nature of key influences and drivers of change.
• Projection of future alternative paths available.

4)assessment :This step identifies key opportunities and threats.The competitive position of business analyzed in terms of how the organization stands in relation to other organizations.competing for some resources of customers.

• Opportunities is a favorable condition which creates risks and weakens the competitive position.
• Threat is an unfavourable condition which strengthens organization's competitive position of the organization.

Environmental analysis identifies competitive position of a business organization.

Factors affecting the competitive position are :

• Competitors :Current and positional competitive and their objectives and strategics.
• Strategic groups:Other firms in the industry following similar competitive approaches.
• Market factors :Customer needs,market segments,market power,market share and growth.
• Market attractiveness :The degree of market attractiveness for the products.