Scanning theEnvironment

Organization & EnvironmentAn organization is a creature of its environment. Its very survival and all of its perspectives, resources,

problems, and opportunities are generated and conditioned by the environment.

Thus, it is important for an organization to monitor the relevant changes taking place in its environment and formulate strategies to adapt to these changes.

To achieve this broad perspective, the strategist needs to develop and implement a systematic approach to environmental scanning

Importance Of Environmental ScanningThe underlying importance of environmental scanning is captured in Darwinian laws: •the environment is ever-changing, •organisms have the ability to adapt to a changing environment, and organisms that do not adapt do not survive.

Importance Of Environmental Scanning

To survive and prosper in a changing environment, companies must stay at the forefront of changes affecting their industries.

•First, it must be recognized that all products and processes have performance limits and that the closer one comes to these limits the more expensive it becomes to shift to the next generation of performance improvements.

•Second, one must take all competition seriously.

Importance Of Environmental ScanningThird, if environmental change promises potential

advantage, one must attack to win and attack even to play the game.

Attack means gaining access to new technology, training people in its use, investing in capacity to use it, devising strategies to protect the position, and holding off on investments in mature lines.

Fourth, the attack must begin early. The substitution of one product or process for another proceeds slowly and then predictably explodes.

Fifth, a close tie is needed between the CEO and the operating managers. Facing change means incorporating the environmental shifts in all aspects of the company’s strategy.

What Scanning Can Accomplish

• It helps organization to capitalize on early opportunities rather than lose these to competitors.

• It provides an early signal of impending problems, which can be defused if recognized well in advance.

• It sensitizes an organization to the changing needs and wishes of its customers.

• It provides a base of objective qualitative information about the environment that strategists can utilize.

• It provides intellectual stimulation to strategists in their decision making.

• It improves the image of the organization with its publics by showing that it is sensitive to its environment and responsive to it.

The Concept Of EnvironmentOperationally, five different types of environments may be identified.

Four Phases in the Evolution of Environmental Scanning

Environmental scanning identifies four evolutionary phases of activity,

Environmental Scanning & Marketing Strategy?

• Technology convergence• Emergence of multi-functional products• Continual improvement in marketing

processes• Leveraging information for competitive

advantage• Radicalism in configuring marketing

strategy

Linking Environmental Scanning to Corporate Strategy

Organizational Arrangements and Issues

Corporations organize scanning activity in three different ways

line managers undertake environmental scanning in addition to their other work;

Scanning is made a part of the strategic planner’s job;

scanning responsibility is instituted in a new office of environmental scanning.