This text was originally printed as a chapter in A Primer for new Institutional Researchers and is reprinted here with permission from the Association for Institutional Research. The bibliographical citation is: The Association for Institutional Research.
Identifies and analyzes the most important external environmental factor in the remote, industry, and external operating environments Identifies and analyzes the most important internal strengths and weaknesses of your organization: In order to maintain a competitive position in this industry, it is crucial for the company to analyze the conditions of the internal and external environment.
The results of this environmental scan will allow the company to implement strategic tactics that will exploit opportunities within the operating environment. In addition, the company will be better prepared to adapt to unexpected events and trends that alter business conditions in the future.
Optimizing the internal environment will allow the company to operate at the highest level of efficiency and improve organizational culture. Meanwhile, optimizing strategies in external environment will promote a competitive advantage within the industry.
The following analysis seeks to identify the most important forces in the internal and external environment of Southwestern Foods. First, it is important to identify the most important remote external environmental factor. In the shell egg industry, legal and regulatory concerns are of the utmost importance.
Southwestern Foods is subject to a highly complex collection of food processing regulations from both state and federal authorities. Failure to comply with food regulations enforced by these departments could result in significant fines and bad public coverage of the company.
Therefore, the most important remote environmental factor is regulatory trends. The company will need to constantly monitor and react to regulatory changes that are enacted at the state and federal level.
The next level of the external environment occurs within the shell egg industry and is driven by both small and large competing firms. A diverse set of companies is competing to control the market share for shell eggs throughout the United States.
This statement points to the fact that the consumers are mostly concerned with the price that they pay at the grocery store for eggs. The largest industry concern for the company will be maintaining a low price without sacrificing the quality of the end product.
After analyzing the management style of the company, several areas of strength and opportunity have been identified within the internal environment. As ofSouthwestern Foods staffs over 2, workers and considers the employee to employer relationship to be good. Unlike many other food processing firms throughout the country, the employees are not covered by a collective bargaining agreement.
This would be considered a strong point for the company because it provides a high level of flexibility with its workforce. In addition, it allows the company to offer wages and benefits at a cost that is far more beneficial to the total gross operating expenses.
In other words, the strong relationship the company maintains with its employees allows it to offer the lowest possible wages.Environmental scanning helps a business improve their decision-making process in times of risk to the external and internal environments the business is in.
Process [ edit ] When scanning the environment, the organization need . The environmental scanning is the function of strategic management which analyzes the external functioning that directly affects the organization.
The Environmental scanning is to scan the changes that are occurring in the environment and in order to monitor and identify those changes which include the new trends that result in causing the. Definition of environmental scanning: Careful monitoring of an organization's internal and external environments for detecting early signs of opportunities and threats that may influence its .
The Macro Environment Analysis is the first step of a strategic analysis which in turn kicks off the traditional; strategic planning cycle; it is sometimes referred to as an external analysis, a pest analysis or a pestle analysis.
Environmental scanning is one of four activities comprising external analysis. As illustrated in Figure 1, external analysis is the broader activity of understanding the changing external environment that may impact the organization.
Environmental scanning refers to possession and utilization of information about occasions, patterns, trends, and relationships within an organization’s internal and external environment.
It helps the managers to decide the future path of the organization.