Sunday, March 21, 2010

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 Environmental analysis processon 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.

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