Setting up of

Environment Scanning Cell

By : G.B.Songaonkar, General Manager

Environmental scanning is a process of gathering, analyzing, and dispensing information to assist management in planning the organization's future course of action. The scanning captures internal conditions and external data and factors that affect the organization.

What is Environment Scanning ?

Setting up of Environment Scanning Cell

External ScanningIdentifies the types of external information global & domestic in terms of political, economic,social,technology, industry and competitors, opportunities and threats and other potential sources of information.

Internal ScanningIdentifies the types of internal information within the organization like vision, mission, system & procedures , organizational goal, strength, weakness …. for the environmental scan and sources of this Information.

Setting up of Environment Scanning Cell

Setting up of Environment Scanning Cell

Banking institutions occupy a central position in the nation’s financial market and are catalytic agents in the development process of the economy. By intermediating, between the surplus and deficit spending units, banks increase the quantum of national savings and investments and hence national output.

Banking & its Strategic Importance

Setting up of Environment Scanning Cell

Objectives of Environment Scanning :

1. To determine the environmental sectors that are perceived as strategically uncertain in the industry.

2. To find out the major information sources.3. To know the degree of relationship between

information sources used, their perceived accessibility and quality.

4. To ascertain the environmental sector information coming to the knowledge and the level of interest in keeping informed about the sector.

5. To investigate their main purpose in environmental

scanning.

Setting up of Environment Scanning Cell

Scanning of Business EnvironmentAd-hoc scanning Short term, infrequent examinations usually initiated by a crisis

Regular scanning Studies done on a regular schedule (e.g. once a year)

Continuous scanning continuous structured data collection and processing on a broad range of environmental factors .

In today's turbulent business environment continuous scanning is the best scanning method because it allows the firm to act quickly, take advantage of opportunities before competitors do and respond to environmental threats before significant damage is done.

Setting up of Environment Scanning Cell

Process of Environment Scanning

Setting up of Environment Scanning Cell

Environmental Scanning & Monitoring Techniques

SWOTTechniquesQUESTPEST Industry AnalysisCompetitor Analysis

Setting up of Environment Scanning Cell

SWOT(Strength-Weakness-Opportunity-Threat)

The SWOT analysis is an extremely useful tool for understanding and decision making for all sorts of situations in business and organizations

Identification of threats and Opportunities in the environment (External) and strengths and Weaknesses of the firm (Internal) is the cornerstone of business policy formulation; it is these factors which determine the course of action to ensure the survival and growth of the organisation.

Setting up of Environment Scanning Cell

Strengths & WeaknessesResourcesfinancial intellectuallocation Cost advantages from proprietary know-how Creativity / ability to develop new products Valuable intangible assetsintellectual capital Competitive capabilities Organization culture

Setting up of Environment Scanning Cell

Opportunities and ThreatsEconomic condition Market conditionsMergers & Takeovers Expectations of stakeholders Joint ventures Strategic alliancesTechnology Public expectations Competitors and competitive actionsPoor Public RelationsCriticism (Editorial) Global Markets Environmental conditions

Setting up of Environment Scanning Cell

Use of SWOT AnalysisSetting objectives –defining what the organization is intending to do Environmental scanning Analysis for business planning, strategic planning, competitor evaluation, marketing, business and product development and research reports. Analysis of existing strategies & Development new/revised strategies Establish critical success factors – the achievement of objectives and strategy implementation

Setting up of Environment Scanning Cell

Use of SWOT AnalysisPreparation of operational, resource, projects plans for strategy implementation Monitoring results – mapping against plans, taking corrective action which may mean amending objectives/strategies.

Setting up of Environment Scanning Cell

PEST Analysis

A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:

Political Economic Social Technological

Setting up of Environment Scanning Cell

Political Factors

Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:tax policy employment laws environmental regulations trade restrictions and tariffs political stability

Setting up of Environment Scanning Cell

Economic Factors

Economic factors affect the purchasing power of potential customers and the firm& apos;s cost of capital. The following are examples of factors in the macro-economy:economic growthinterest rates exchange rates inflation rate

Setting up of Environment Scanning Cell

Social Factors

Social factors include the demographic and cultural aspects of the external macroenvironment.Thesefactors affect customer needs and the size of potential markets. Some social factors include:health consciousness population growth rate age distribution career attitudes

Setting up of Environment Scanning Cell

Technological FactorsTechnological factors can lower

barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include:

R&D activity automation technology incentives rate of technological change

Setting up of Environment Scanning Cell

INDUSTRY ANALYSIS

An industry is a group of firms producing a similar product or service. An examination of the important stakeholders’ group in a particular corporation’s task environment is a part of industry analysis

Setting up of Environment Scanning Cell

INDUSTRY ANALYSIS

Threat of new entrantsExisting competitive firmsHigher fixed costsPrice differentia onEntry and exit barriersIdentical/substitute ProductsBargaining Power of Buyers /suppliersGovernment policiesMarket demandMarket penetration

Thank you