Scanning the Environment

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Scanning the Environment

• Chapter 6

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Topics Chapter 6

• External information
• Perspectives
• Procedure

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Scanning Accomplishments

• Capitalize on early opportunities
• Spot early signals of impending problems
• Sense changing customers needs

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Scanning Accomplishments

• Objective qualitative information
• Intellectual stimulation
• Improves image of firm
• Executive education

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Environments
Social
Economic
Political
Technological
Regulatory
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Environmentsand Scanning Levels
Social
Economic
Political
PRODUCT- MARKET
Regulatory
SBU
Technological
CORPORATE
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External Information

• Market tidings
• Acquisition leads
• Technical tidings
• Broad issues

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Market Tidings

• Market potential
• Structural change
• Competitors
• Industry

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Market Tidings

• Pricing
• Sales negotiations
• Customers

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Acquisition Leads

• Mergers
• Joint ventures
• Acquisitions

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Technical Tidings

• New products, processes, technology
• Product problems
• Costs
• Licensing and patents

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Broad Issues

• General conditions
• Government actions and policies
• Suppliers and raw materials
• Resources available

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Four Phases in Environmental Scanning

• Primitive no impetus
• Ad hoc understand an event
• Reactive form response
• Proactive develop competitive advantage

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Technological Environment Five Categories

• Energy
• Materials
• Transportation
• Communications and information
• Genetic

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Political/regulatory Environment Trends

• Increase of geopolitical federations
• Rising nationalism vs. World federalism
• Limited wars

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Political/regulatory Environment Trends

• Increase in political terrorism
• Rise of emerging nations
• Rise in senior-citizen power

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Economic Environment Trends

• Cycle of Gross National Product
• Increase/ decrease of regulation
• Increasing power of developing nations
• Decline/increase in real world growth

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Economic Environment Trends

• Increase/decrease inflation
• Changes in ownership of U.S. Businesses
• Foreign ownership
• Employee ownership
• Increase in worldwide free trade

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Social Environment Trends

• Orientation toward time
• Quality
• Health

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Social Environment Trends

• Environment
• Home
• Diversity of lifestyle

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Scanning Environment Procedure

• Track broad trends
• Determine relevance of trend
• Study impact on industry
• Forecast direction of trend

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Scanning Environment Procedure

• Analyze momentum
• Discover opportunities
• Relate trends to strategy