Scanning is the process of analyzing the environment for the identification of the factors which

impact the business. Successful scanning draws attention to the possible changes and events
well before the occurrence , allowing time for suitable strategic action.
Monitoring : monitoring is a in depth analysis of the relevant environmental trend identified at
the scanning stage. As the relevant factors have already been identified, monitoring lend itself
for a focused and systematic approach.
Forecasting : Anticipating the future is essential for indentifying the future threat and
opportunities and for formulating strategic plans
Assessment: the purpose of environmental analysis is to asses the impact of the environmental
factors on the organizations business. So assessment means find out the possible impact on
the business.

Stages of Environmental Analysis
Scanning
Monitoring
Forecasting
Assessing
Scanning
It is the process of analyzing the environment.
Identification of emerging trends is a critical purpose of environmental scanning.
Successful environmental scanning draws attention to possible changes and events before their
occurrence , allowing time for suitable action.

Factors to be consider for environmental scanning:
1. Events are important and specific occurrences taking place in different environmental sectors.
2. Trends are the general tendencies or the courses of action along which events take place.
3. Issues are the current concerns that arise in response to events and treats.
4. Expectations are the demands made by interested groups in the light of their concern for issues.

TECHNIQUES FOR ENVIRONMENTAL SCANNING
Involve two phases: Information gathering and Evaluation
1) Verbal & Written Information:
verbal information includes, information obtained by direct talk with people, by
attending seminars, meetings, etc..
Written or documentary information includes both published and unpublished materials
2) Search and Scanning:
this involves research for obtaining the required information
3) Spying:
Eve though it is not considered as ethical, spying to get information about the
competitor is not uncommon
These 3 pertains to source of information/methods of gathering information

Monitoring
It entails perspective followup and a more indepth analysis of the relevant environmental trends
identified at the scanning stage.
The purpose of monitoring is to assemble sufficient data to discern(makeout) whether certain
patterns are emerging.
The outputs of monitoring are threefold :
a specific description of environmental patterns to be forecast;
identification of trends for further monitoring;
identification of patterns requiring further scanning.

Forecasting
Forecasting is concerned with the development of possible scope, speed and intensity of
environmental change to layout the evolutionary path of anticipatory change.

Assessing
Assessment involves drawing up implications/ possible impacts.
In assessment, the frame of reference moves from understanding the environment of the focus
of Scanning, Monitoring and Forecasting- to indentifying what that understanding of
environment means for the organization.
In short, It involves drawing of possible impacts of the environmental changes on the
organization.
There are broadly two approaches to Environmental Analysis :
Outside-in (macro) approach
Inside out (micro) approach
Outside-in (Macro) approach
This approach takes the very broad view of the business environment., with a long term
perspective and develops alternative scenarios of the future.
The implications of the alternative scenarios for the industry and the organization are drawn up
with reference to the different scenarios.
A scenario is a detailed description of how certain events may occur in the future and their
consequences for the organization.
Inside-out (Micro) approach
It takes a narrow view of the environment, forecasts the immediate future environment on the basis of
ongoing environmental monitoring and derives the implications of it for the industry and firm out of it.

Techniques of Environmental Analysis
SWOT Analysis
SWOT Analysis is often used early in the business planning process to help identify and assess:
Strengths of the organization (internal)
Weaknesses of the organization (internal)
Opportunities in the environment (external); and
Threats in the environment (external