Environmental Analysis Process

Environmental Study

The benefits of environmental study are as follows:

* Development of broad strategies and long-term policies of the firm.

* Development of action plans to deal with technological advancements.

* To foresee the impact of socio-economic changes at the national and
international levels on the firm’s stability.

* Analysis of competitor’s strategies and formulation of effective countermeasures.

* To keep oneself dynamic.

Environmental Analysis Process

The analysis consists of four sequential steps:


It involves general surveillance of all environmental factors and their interactions in order to:

* Identify early signals of possible environmental change

* Detect environmental change already underway


It involves tracking the environmental trends, sequences of events, or streams of activities. It frequently involves following signals or indicators unearthed during environmental scanning.


Strategic decision-making requires a future orientation. Naturally, forecasting is an essential element in environmental analysis. Forecasting is concerned with developing plausible projections of the direction, scope, and intensity of environmental change.


In assessment, the frame of reference moves from understanding the environment- the focus of scanning, monitoring and forecasting – to identify what the understanding means for the organization. Assessment, tries to answer questions such as what are the key issues presented by the environment, and what are the implications of such issues for the organization.


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