Environmental scanning is a process that systematically surveys and interprets relevant data to identify external opportunities and threats that could influence future decisions. It is closely related to a S.W.O.T. analysis and should be used as part of the strategic planning process.
Components of external scanning that could be considered include:
- Trends: What trends are occurring in the marketplace or industry that could affect the organization either positively or negatively?
- Competition: What is your competition doing that provides them an advantage? Where can you exploit your competition's weaknesses?
- Technology: What developments in technology may impact your business in the future? Are there new technologies that can make your organization more efficient?
- Customers: How is your customer base changing? What is impacting your ability to provide top-notch customer service?
- Economy: What is happening in the economy that could affect future business?
- Labor supply: What is the labor market like in the geographies where you operate? How can you ensure ready access to high-demand workers?
- Political/legislative arena: What impact will election outcomes have on your business? Is there impending legislation that will affect your operations?
Each organization must identify what external factors are most impactful to make the environmental scan a useful tool.
The next step is to conduct an internal scan of the organization. Review the company's vision, mission and strategic plan. Examine the organization's strengths and weaknesses. Consider where the company is now and where it plans to be in five or 10 years. Interview or survey leaders of the company.
Once an organization has gathered information about the external world, its competitors and itself, it should then develop strategies to respond to impacts when the need arises.
When conducting an environmental scan, a variety of methods should be used to collect data, including reviewing publications, conducting focus groups, interviewing leaders inside and outside the organization, and administering surveys.
Environmental scanning is an important component of strategic planning as it provides information on factors that will affect the organization in the future. The information gathered will allow leadership to proactively respond to external impacts.
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