Environmental Scanning is a popular technique among marketers used to accumulate information regarding events and their relationships with an organization. It provides management with all the necessary data required to shape the future of an organisation sustainably. Thus, every firm has an internal and external environment to monitor their revenue and expenditure accurately.
To achieve the mark of success, it is imperative for a firm to scan its environment regularly evaluating its developments. Apart from this, it is also crucial to realise the factors that can be beneficial for the business and implementing them. The process of environmental scanning is used by the firms to monitor their internal and external environments efficiently. Thus, it utilises the data gathered from occasions, patterns, trends, and relationships within its internal and external environment.
What Is the Importance of Environmental Scanning in Marketing?
Environmental scanning possesses great significance in Pestel Analysis marketing as it helps to identify opportunities and risks which can affect your business. It also allows you to make enhanced strategic business decisions contributing to the development of your business. As a part of this process, the firm can gather all the relevant information regarding its environment for further analysis. It is crucial for predicting the impact of changes in the environment, both internal and external environments. All the strategies developed under environmental scanning eventually leads to the enhancement of the management team to make sustainable decisions. Thus, the practice of the technique of environmental scanning has excellent importance in Pestel marketing Assignment Help for the promotion of a business.
What Is Environmental Scanning Strategy?
The strategy of environmental scanning critically studies and deciphers relevant data to identify all the external opportunities and risks successfully. To determine these, a firm needs to gather information about the foreign market, its rivals in the market, and itself. So, to stay ahead of their competitors, a firm needs to make timely amendments in their strategies increasing their efficiency.
The strategy of environmental scanning can be carried out in the following steps:
Step 1: It is imperative for an employer to collect relevant information regarding the economy, governance, laws, and demographic factors like population.
Step 2: Further, it becomes crucial for the firm to draw all their focus towards their competitors. The firm should critically investigate trends, opportunities, and risks possessing a threat to it.
Step 3: After considering all the external parameters, it is mandatory to conduct an internal scan of the firms. You need to look carefully into a company's operations to understand its strengths and weaknesses. It is very crucial to forecasting the strategies of your competitors to stay a step ahead in the market.
Therefore, following the above environmental scanning strategy plays a crucial role in contributing to the development of a business.
Factors of PESTEL Analysis
6 Factors of PESTEL Analysis
1. Political: It deals with the factors determining the degree and impact of the government on the economy of a nation. Some of the political factors influencing the economy of a country are given as follows:
- Political balance in the economy of a nation
- Advisory committees delivering political ideologies of the government
- Updated taxation policies pratised by the government.
- Regulatory practices and governing bodies
- Working tenure of the government and any expected changes in the future
- Influential political leaders with strong and clear ideas
2. Economic: The economic factors contributing to the development of an organisation are as follows:
- Economic conditions of the firm
- Trade cycle of the firm including factors like expansion, depression, etc.
- Inflation rates
- Rate of Unemployment
- Interest rates dominating different sectors of the economy
- Significant features of various industries
- Capacity of the consumers to invest capital
3. Social: It can undoubtedly be stated that business is significantly affected by the societies around it. So, it is crucial to examine these factors while studying the social environment. Some of these factors are as follows:
- Physical conditions of the market
- Analysing buying patterns of the consumer
- Spiritual and ethnic factors
- Influence of the media on a business
- Trending lifestyle in various regions for a given time
4. Technology: Among all the factors, technology plays the most crucial role in deciding the future of a firm. It can either promote a business effectively or possess a threat to it. Therefore, things you should keep in mind while investing in technology are:
- Latest technology to deliver the requirements of production
- Efficient technique for manufacturing (increase in output, reduce production cost, etc.)
- Developing new innovative ideas
- Intellectual Property, Patents, etc.
- The growth of technology to eliminate business risks
5. Legitimate: It is crucial for the firm to adhere to the laws made by the government to ensure its sustainability in the market.
- Laws to conduct business
- Rules and guidelines for environmental laws
- Tips for good health and safety
- International agreements for Trades and Treaties
- Laws and Circulars for local areas
6. Environment: The factors affecting industries and their ability to function smoothly are as follows:
- Issues highlighting the environmental concerns
- Consummation of Power
- Insurance Policies
- Garbage disposal in a safe manner
- Management of hazardous material
Examples Of Environmental Scanning
You can understand the concept of environmental scanning by getting into the working of PepsiCo. Being the second largest food and beverage company, PepsiCo emphasises on the significance of health and wellness. According to the CEO Indra Nooyi's strategy, "PepsiCo's nutrition business is a massive part of the company's portfolio today". Her prime focus is to increase the services of good for you products in the market. These products include snacks and drinks made of grains, fruits, nuts, vegetables, and dairy.
Moreover, the company has successfully acquired various brands in the food and beverages industry and increased their investment in R&D. This helped the company to develop healthier ingredients applying to products with its business of soft drinks and chips. Therefore, PepsiCo's strong strategy has contributed to its growth in the industry.
How Pestel Factors Influence Marketing?
PESTEL is a general and cyclopedic method as compared to its fellow counterparts allowing its users to achieve a better understanding. It assists the management of a firm in initiating a better decision-making process and emphasising on the significance of active actions. Therefore, it helps a firm to adapt to changes in the environment but also, to convert opportunities into results.
Textbooks On Environmental Scanning
The subject of Environmental Scanning serves as a massive research case study for marketers providing a wide range of assistance. Textbooks for Environmental Scanning are given as follows:
Environmental Scanning and Business Strategy
Published by British Library Research and Development Department in 1989
By Ray Lester and Judith Waters (Authors)
Strategic issues management: A comprehensive guide to environmental scanning
Published by Pergamon Press in 1994
By John D. Stoffels (Author)
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