| Environmental scanning is a research process, in which | | | | take immediate actions according to the situation or |
| businesses collect all types of relevant information that | | | | information, because environmental scanning is useful |
| helps these businesses in making decisions regarding | | | | only when followed by appropriate responses. Sitting |
| surviving, expanding or entering new markets. In simple | | | | and waiting for other businesses to respond before |
| words, it can be described as keeping a close eye on | | | | you decide your future course of action is going to be |
| external or internal happenings and analyzing this | | | | of no use. Successful businesses are always born out |
| information to know how it can be detrimental or | | | | of bold, timely decisions. |
| beneficial for the business. The information must be | | | | A business is affected by many external factors and it |
| collected, arranged and disseminated among the | | | | must monitor these factors all the time. For example, if |
| company directors and managers. Mostly, | | | | you are entering into a new market, you must obtain |
| environmental scanning is limited to external factors; | | | | information about the import and export tariffs, rate of |
| however some businesses also carry out internal | | | | exchange or an idea of political stability in the region. |
| scanning. Environmental scanning is critical for the | | | | Similarly, you should base your business expansion (or |
| management or decision makers, as this information | | | | contraction) decisions on the economic growth, income |
| helps in making well informed decisions and that too, at | | | | level or employment rate in the market. When |
| the right time. These decisions include expansion, | | | | introducing a new product or technology, you have got |
| innovation, entering or leaving a market. | | | | to have an idea of how patent laws or copyrights |
| Small businesses usually carry out environmental | | | | work. Other legal factors include union laws, |
| scanning only when starting; for the reason that their | | | | environmental protection or minimum wage laws. |
| resources do not allow them to perform environmental | | | | Similarly, observing the demographic factors like |
| scanning on continual basis. However, big corporations | | | | population distribution, income or education level can |
| are always scanning the macro environment factors | | | | help you identify the future trends and eventually |
| to gain competitive advantage over their competitors, | | | | opening up various new opportunities for your business. |
| at the end of the day, it's all about spotting the | | | | Internal scanning can include the identification of |
| opportunities (or threats) before your competitors do. | | | | resources in terms of workforce, capital, technology, |
| Something worth mentioning is that it is important to | | | | strength and weaknesses. |