Environmental Scanning Analysis

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Strategic Management is a set of decisions and actions that results in the formulation and implementation of plans to achieve the company’s objective. The main elements in Strategic management are as under:

Environmental Scanning
An organisation exists in an Environment and hence to determine the future direction of the organization its environment has to be scanned. Environmental scanning is the procedure of gathering information about events and their relationships within an organization's internal and external environments.

PESTEL Analysis is used as a tool by companies to track the environment they’re operating in or are planning to launch a new project/product/service etc.
PESTEL stands for P for Political, E for Economic, S for Social-cultural,
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What is the influence does the local culture have on the market?
What type of technological advancements is expected to come into the market and how will it affect the market?
What are the environmental factors, rules and regulation are likely to affect the industry?
What are current legislative regulations that govern the industry and what are chances of change or introduction of new or modified one?
All the aspects are crucial for any industry and an understanding of these factors will form the backbone of a good strategy. It is also important to point out that the answers for these factors may affect different industries in different ways
There are various approaches that can be used to sort out information for environmental scanning.
Systematic Approach:
This approach involves systematic collection of data from the market and continuous updating of this data is essential for strategic management and also the operational activities.
Ad hoc Approach:
This approach is done as when data is needed for a specific purpose the particular environment is scanned. This could be done for a specific project or evaluate the existing strategy or to devise a new
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Vision Statement – A vision statement which should be crisp and to the point should be brought out. An effective vision statement brings out the core ideology that binds the organisation and how the future is envisioned. It should bring out the core purpose of existence of the organisation.
Mission Statement- This would actually determine the methodology of the company in reaching its vision, its purposes and its philosophy behind its goals. The mission statement helps to determine the allocation of resources, establishes the premises, facilities accountability, performance criteria for mission achievement.
Strategic Objective- This step in the strategic formulation process the organization identifies the performance targets needed to reach clearly stated objectives which could include market position, production of goods, desired market share, customer services, innovations and sales increases. All stakeholders need to be informed of these objectives and their

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