Environmental Scanning: SWOT, ETOP, PEST with Examples | Easy BBA Notes

🌍 Environmental Scanning – Meaning

Environmental scanning is the process of analyzing internal and external factors that affect a business.

🔍 Purpose:

To spot opportunities and threats so businesses can plan wisely.

✅ Simple Definition:

It’s like keeping your eyes and ears open to what’s happening inside and outside the company.

🏢 Types of Environmental Factors

🔹 Internal Factors (Controllable)

→ Elements inside the business that affect its working:

• ➤ Human Resources – Skills, teamwork, motivation

• ➤ Capital Assets – Machinery, office space, equipment

• ➤ Internal Technology – Software, in-house systems

🔸 External Factors (Uncontrollable)

→ Outside forces influencing business performance:

📌 Macro-Environmental Factors

• ➤ Political/Legal – Govt. policies, regulations

• ➤ Economic – Inflation, recession, GDP

• ➤ Social & Cultural – Lifestyle, traditions, ethics

• ➤ Demographic – Age, education, income

• ➤ Technological – Innovation, automation, AI

📌 Micro-Environmental Factors

• ➤ Suppliers – Raw material cost & availability

• ➤ Customers – Needs, satisfaction, behavior

• ➤ Competitors – Market rivalry and strategies

• ➤ Market Trends – Industry growth or decline

• ➤ Intermediaries – Dealers, agents, vendors

🌟 Characteristics of Environmental Scanning

🧩 Procedure of Environmental Scanning

1. ➤ Examining – Identify all environmental elements

2. ➤ Monitoring – Watch for changes and patterns

3. ➤ Forecasting – Predict possible future situations

4. ➤ Evaluation – Decide which factors are risks or opportunities

🎯 Importance of Environmental Scanning

• ✅ Helps achieve goals by adapting to changes

• 🔍 Identifies internal weaknesses and external threats

• 📊 Improves future planning and forecasting

• 📈 Keeps businesses updated with market trends

• 👥 Understands customer expectations

• 💼 Spots new opportunities before competitors

🧠 Strategies / Techniques of Environmental Scanning

🔹 1. QUEST Analysis

Quick method to identify urgent and key environmental issues.

🔹 2. SWOT Analysis

S → Strengths (Internal)

W → Weaknesses (Internal)

O → Opportunities (External)

T → Threats (External)

📌 Example:

A startup’s Strength could be innovation,

Weakness might be funding,

Opportunity could be untapped markets,

Threat may be strong competition.

🔹 3. ETOP Analysis

Environmental Threat and Opportunity Profile

It maps out various environmental factors into threats and opportunities to evaluate their impact on business.

📌 Example:

Changing government tax policy = Threat

New tech trends = Opportunity

🔹 4. PEST Analysis

Analyzes macro-environment:

• P → Political

• E → Economic

• S → Social

• T → Technological

⚠️ Limitations of Environmental Scanning

• 🧠 Information Overload – Too much data = confusion

• ❌ Not 100% Accurate – Future is uncertain

• 🕒 Delay in Decisions – Overanalysis leads to slow actions

• 📉 Overdependence on Data – Wrong data = wrong strategy