ENVIRONMENTAL

ANALYSIS
What is Environmental Analysis?
Definition: Environmental Analysis is described
as the process which examines all the
components, internal or external, that has an
influence on the performance of the organization.
The internal components indicate the strengths
and weakness of the business entity whereas the
external components represent the opportunities
and threats outside the organization.
Environmental analysis is:
●To perform environmental analysis, a constant stream
of relevant information is required to find out the best
course of action. Strategic Planners use the
information gathered from the environmental analysis
for forecasting trends for future in advance. The
information can also be used to assess operating
environment and set up organizational goals.
●It ascertains whether the goals defined by the
organization are achievable or not, with the present
strategies. If is not possible to reach those goals with
the existing strategies, then new strategies are devised
or old ones are modified accordingly.
Advantages of Environmental Analysis
The internal insights provided by the
environmental analysis are used to assess
employee’s performance, customer satisfaction,
maintenance cost, etc. to take corrective action
wherever required. Further, the external metrics
help in responding to the environment in a
positive manner and also aligning the strategies
according to the objectives of the organization.
Environmental analysis helps in the detection of
threats at an early stage, that assist the
organization in developing strategies for its
survival. Add to that, it identifies opportunities,
such as prospective customers, new product,
segment and technology, to occupy a maximum
share of the market than its competitors.
STEPS INVOLVED IN ENVIRONMENTAL
ANALYSIS
1. Identifying: First of all, the factors which influence the
business entity are to be identified, to improve its position in
the market. The identification is performed at various levels,
i.e. company level, market level, national level and global
level.
2. Scanning: Scanning implies the process of critically
examining the factors that highly influence the business, as
all the factors identified in the previous step effects the entity
with the same intensity. Once the important factors are
identified, strategies can be made for its improvement.
3. Analysing: In this step, a careful analysis of all the
environmental factors is made to determine their effect on
different business levels and on the business as a whole.
Different tools available for the analysis include
benchmarking, Delphi technique and scenario building.
4. Forecasting: After identification, examination and analysis,
lastly the impact of the variables is to be forecasted.
Environmental analysis is an ongoing process and follows a
holistic approach, that continuously scans the forces effecting
the business environment and covers 360 degrees of the
horizon, rather than a specificsegment.
BUSINESS DESCRIPTION
The Business Description The description fills in the details outlined in
your summary. It puts together the structure of the business and should
include the following:
What is the name of the business?
Where is it located?
What is the business structure: corporation, proprietorship or limited
liability company?
Why is this business unique?
Why will it succeed?
What factors will cause the business to grow?
Company Description
This high-level view of your business should explain who you
are, how you operate and what your goals are.

The company description should feature:

The legal structure of your business (corporation, sole

proprietorship, etc.) A brief history, the nature of your business,
and the needs or demands you plan to supply An overview of
your products/services, customers, and suppliers A summary
of company growth, including financial or market highlights A
summary of your short- and long-term business goals, and how
you plan to make a profit.
Company Description
A more involved company description should follow the
executive summary. This section details the business's key
information and examines the market segment you want to
capture. The company description is the "meat" of your
business plan and should include information about:
The name of your business The business location The type of
business entity (proprietorship, corporation, or limited liability
company (LLC)) How your company is different from its
competition Growth and success factors How the products and
services you offer will solve a problem or fill a need for your
desired audience.
Describe your business
You need to know how to pitch to investors and lenders to
captivate their interest. Your information should answer who,
what, where, when, why, and how right off the bat.How to Write
a Company Description for a Business Plan visual.

1. Who? Who are you? What is the name of your business?

You want to verify that the name of your business is clear in the
business description of your business plan. And, include your
name because lenders and investors want to know the
entrepreneur who started the business.
Who is your target customer? When you describe your
business, make sure you know who you appeal to. If you don’t
know your target customer, there’s a chance that nobody will
have interest.
2. What?
What is your product or service? If lenders and investors can’t
understand what you’re selling or how it’s significant, they
might pass on your concept. Be clear when you tell lenders
and investors about your business.
What are your goals for your business? Set realistic short-term
and long-term goals. If you plan on selling $20,000 worth of
products by the end of the second month after opening, include
the goal.
3. Where?
Where is your business located? If you are currently operating your
business, you need to say its location. Likewise, if you are opening a new
business, make sure you state where you want it to be located.
4. When?
When will you implement your business plan and see results? Say when
you want to open your business (or when you opened it). And, include
when you plan to achieve your goals. Once your goals are achieved,
what is your exit strategy for small business? Do you know how to turn
your growing business into a profitable venture?
5. Why?
Why would potential customers want to buy from you? Explain why you
are set apart from the competition. This is where you can describe your
business’s originality. Lenders want to know why consumers would want
to make a purchase at your small business instead of a competitor’s.
You also need to include your business’s mission statement. A
mission statement helps set you apart from competition and explain
why your business is unique.
6. How?
What type of business structure will you form? Will you function as a
sole proprietorship, limited liability corporation, partnership, or
corporation? Explain why you chose your business structure.
Mention the small business advisor help you have enlisted, like a
business attorney, since each structure has different registration
requirements, regulations, and liabilities.
Do you know how to interview and hire employees? Further, do you
know how you’re going to pay your employees? Do you know how
to do payroll on your own, or will you use payroll software? And,
how do you plan to achieve the goals you set for your business?
Explain what steps you will take to make your business a success.
THANK YOU!