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Environmental scanning is the continuous process of gathering external information to predict trends and events that impact an organization. This includes social, economic, technological, competitive, and regulatory factors. Understanding these forces is crucial in strategic planning.
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Environmental Scanning The process of continually acquiring information on events* occurring outside the organization to identify and interpret potential trends is called environmental scanning. * Events beyond management control
Environmental forces affecting the organization, as well as its suppliers and customers
Social Forces • Demographics - Describing the population according to selected characteristics such as their age, gender, ethnicity, income, and occupation
The changing distribution of the over-65 population in the United States
Culture • Culture incorporates the set of values, ideas, and attitudes of a homogenous group of people that are transmitted from one generation to the next.
Economic Forces The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.
Consumer Income • Gross income is the total amount of money made in one year by a person, household, or family unit. • Disposable income is the money a consumer has left after paying taxes to use for food, shelter and clothing. • Discretionary income is the money that remains after paying for taxes and necessities.
Technological Forces • Technology’s Impact on Customer Value • Electronic Business Technologies • Marketspace • Electronic commerce • Internet and World Wide Web • Commercial online services • Intranet • Extranets
Competitive Forces • Alternate Forms of Competition • Pure competition • Monopolistic competition • Oligopoly • Monopoly
Regulatory Forces Restrictions state and federal laws place on business with regard to the conduct of its activities.
Regulatory Forces • Protecting Competition • Product-Related Legislation • Company Protection • Consumer Protection • Consumerism • Both Company and Consumer Protection
Regulatory Forces • Pricing Related Legislation • Distribution-Related Legislation • Advertising and Promotion-Related Legislation • Control Through Self-Regulation