Environment analysis has 3 basic objectives-

Under taking of current & potential changes.

Should provide inputs for strategic decision making.

Rich source of idea & understanding of the context, bring fresh views.

Benefits

Knowledge about Business Environment helps to gain strategic advantages over competitor .On the other hand the internal environment factors contribute to the success or failure of an organisation.

Development of board strategies & long term policies.

develop action plan to deal with technological advancement.

foreseeing impact of socio- eco changes at national & international level.

analyze the competitor's strategy.

To keep one self dynamic & innovative.

Steps in Environment AnalysisScanning – general surveillance of all

environmental factors & their interaction in order to identify early signals of change and detect environmental Changes underway.

Monitoring - monitoring entails perspective follow up and more in depth analysis of the relevant environmental trends identified at scanning stage. The effort here is more focused and systematic than scanning.Purpose is to assemble sufficient data to detect whether certain patterns are emerging.

Forecasting - scanning & monitoring provide a picture of what is happening .Strategic decision-making requires future orientation. Forecasting is developing future projections of changes

Assessment – output of above 3 steps are assessed to determine implementation. Assessment involves identifying & evaluate how & why current & projected environmental changes affect strategic mgt. of the organisation.

Techniques of Environment Analysis

SWOT Analysis, strengths, weakness, opportunities, & threats.

Preparation of ETOP

Econometric Techniques

Trend analysis / Time series analysis.

Scenario Development.

Judgemental Models

Brain Storming

Delphi Method

Limitations does not fore tell the future nor eliminate

uncertainty.

Not a sufficient guarantor of organisational effectiveness.