Faculty : Bba

Department: accounting

Course: strategic management

Assignment : environmental scanning and industry analysis

Student names(group seven)

 This topic is presenting by:

 Abdulkadir ahmed said ID. 2927
 Abdinasir Abshir Abdirahman ID. 2789
 Maxamed faarax yuusuf ID. 2928
 Abdihakim mahamud ahmed ID. 2794
 Abdinasir jama Osman ID. 2790
 Said ahmed aw-abdulle ID. 2801
 Yasmen abdikani ali ID. 2806
 Shaafici Mohamoud ahmed ID.2276
 Maxamed kayse maxamed cali ID.2931
Learning Objectives

 Introduction of environmental scanning and industry analysis

in strategic management
 Definitions of environmental scanning and industry analysis
 Types of environmental scanning
 Importance of environmental scanning
 State of process environmental scanning/methods of
environmental
 Purpose industry analysis
 State of methods industry analysis
 Benefits of industry analysis
Names times frame

 Abdinasir asbhir Abdirahman ………………………………………… 5minits

 Abdulkadir ahmed said …………………………………………………… 5minits
 Maxamed faarax yuusuf …………………………………………………. 5minits
 Shaafici Mohamoud ahmed……………………………………………… 5 minits

 Abdihakim mahamud ahmed …………………………………………. 5minits

 Abdinasir jama Osman ……………………………………………………. 5minits

 Said ahmed aw-abdulle ………………………………………………….. 5minits

 Yasmen abdikani ali ……………………………………………………….. 5minits

 Maxamed kayse maxamed cali…………………………………………. 5mints
 Abdinaasir asbhir abdirahmaan

Introduction of environmental
scanning and industry analysis in
strategic management
Introduction of environmental scanning and industry
analysis in strategic management

 Strategic Management is a systematic process of achieving desired

objectives of an organization by proper allocation of its resources.
 Strategic Management process starts with deciding objectives, allocating
resources, and implementing planned programme to achieve desired
objective.
 Environmental scanning is preliminary step for effective implementation
of strategy.
 Environmental Scanning is the process of accessing the influence
environmental factors in which organization is operating. One must
prepare strategy keeping in mind these factors
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For
 Example, if someone is planning to
develop a production plant, he must
choose the site in legislative permissible
area, where access to raw materials,
market is easy and other infrastructure
like power, transport, labor are
available.
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 An industry analysis involves significant business function which is
performed by business proprietors and other management experts to
evaluate the present business environment.
 This is considered as effective market assessment tool designed to
provide a business with an idea of the intricacy of a particular industry.
Industry analysis reviews the economic, political and market factors that
influence the way the industry develops.
 Here is a very brief example of an Industry Analysis for the Cases using
Wal-Mart, specifically Wal-Mart’s competition in the consumer retail
industry and not in the industries where it competes.
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Abdulkadir ahmed said

Definitions of environmental scanning

and industry analysis
 environmental scanning

 environmental scanning is a study or activity which helps

an organization to identify the opportunities and threats
in its ecosystem to create new strategies and objectives
that improve its performance in the industry.
 Environmental scanning refers to the collection and
utilization of information regarding events, relationships,
and trends in an organization's industry, and the use of the
acquired knowledge in shaping the organization's future
strategies and objectives
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 Environmental scanning is the process of

gathering information about events and their
relationships within an organization's internal and
external environments. The basic purpose of
environmental scanning is to help management
determine the future direction of the
organization.

 
industry analysis

 Industry analysis is conducted by the business entity or specifically

an entrepreneur to identify the factors which are influencing the
sector that they have already or thinking about investing in.
 the industry analysis concept that gives the business entity the
necessary information so that they can make plans to tackle them
effectively.
 Industry analysis is a tool that facilitates a company's
understanding of its position relative to other companies that
produce similar products or services.
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 Understanding the forces at work in the overall industry is an important

component of effective strategic planning.
 Industry analysis enables small business owners to identify the threats
and opportunities facing their businesses, and to focus their resources on
developing unique capabilities that could lead to a competitive
advantage.
 Industry analysis refers to the analysis of industry’s environment that
guides the industry to grow and survive in a competitive environment
and gain a competitive edge .
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Maxamed faarax yuusuf

Shaafici Mohamoud ahmed

Types of environmental scanning

Types of environmental scanning

There are types of environmental scanning :

 Internal Environmental scanning
 External Environmental scanning


Internal Environmental scanning
 Definition: Internal environment is a component of the business
environment , which is composed of various elements present
inside the organization, that can affect or can be affected
with, the choices, activities and decisions of the organization.
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 internal environmental factors can be defined as the tangible and

intangible factors that are under the direct control of the organization
in question. Internal factors are further grouped as weaknesses and
strength.
 An example of a positive internal environmental factor would be a
marketing team that has all the resources to launch, evaluate, and
optimize advertising campaigns to acquire new customers.
 An example of a negative internal factor would be standard operating
procedures that are inefficient or haven’t been updated in years.
Factors of Internal Environment scanning
 Value System:
 are a part of regulatory frameworks, such as culture, climate, work processes,
management practices and norms of the organization.
 Vision, Mission and Objectives:
 describes its future position, mission defines the company’s business and the
reason for its existence and objectives implies the ultimate aim of the company
and the ways to reach those ends.
 Organizational Structure:
 determines the way in which activities are directed in the organization so as to
reach the ultimate goal.
 Corporate Culture:
 refers to the values, beliefs and behavior of the organization that ascertains the
way in which employees and management communicate and manage the external
affairs.
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 Human Resources
 is the most valuable asset of the organization, as the
success or failure of an organization highly depends on the
human resources of the organization.
 Physical Resources and Technological Capabilities
 refers to the tangible assets of the organization that play
an important role in ascertaining the competitive
capability of the company
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
Shaafici Mohamoud ahmed

External Environmental scanning

External Environmental scanning

 external environment is a group of factors or conditions that are outside

the organization but affect it in some extent
 external environment is composed of all the outside factors or
influences that impact the operation of business. The business must act
or react to keep up its flow of operations.
 Types of external environmental scanning
 micro environment: it consists of the factors that directly impact the
operation of a company.
 macro environment : it consists of general factors that a business
typically has no control over. The success of the company depends on its
ability to adapt
 Factors of external environmental
scanning
 Micro-factors in external environmental scanning
 Customers
Competitors
Marketing & Media

Macro-factors in external environmental scanning

 Economic
Political/legal
Technology
Natural
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Abdihakim mahamud ahmed

Importance of environmental scanning

Importance of environmental scanning

 The following importance of environmental scanning:

 Identification of strength
 Strength of the business firm means capacity of the firm
to gain advantage over its competitors
 Identification of weakness
 Weakness of the firm means limitations of the firm.
Monitoring internal environment helps to identify not only
the strength but also the weakness of the firm.
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 Identification of opportunities
 Environmental analyses helps to identify the opportunities
in the market. The firm should make every possible effort
to grab the opportunities as and when they come.
 Identification of threat
 Business is subject to threat from competitors and various
factors. Environmental analyses help them to identify
threat from the external environment
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 To plan long-term business strategy
 proper analyses of environmental factors help the business firm to frame plans
and policies that could help in easy accomplishment of those organizational
objectives.
 Survival and growth
 Systematic analyses of business environment help the firm to maximize their
strength, minimize the weakness, grab the opportunities and diffuse threats
 Optimum use of resource
 Proper environmental assessment helps to make optimum utilization of scare
human, natural and capital resource
 helps the firm to reduce wastage and make optimum use of available resources
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Abdinasir jamac Osman

States of process environmental

scanning and methods of
environmental scanning
State of process environmental scanning

 Study of forces and nature of the environment

 This is the first step of environmental scanning in which an
organization studies the nature of environmental forces
and their trends.
 Determine the sources of information
 A company can obtain information from different sources,
but it should be ensured that the information is correct.
The correct source should be tapped for specific
information for more accuracy.
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 Determine the Approaches to Environmental Scanning
 The experts have suggested three approaches, which could be adopted for:
 Systematic Approach
 information for environmental scanning is collected systematically
 Ad hoc Approach
 Using this approach, an organization may conduct special surveys and studies to
deal with specific environmental issues from time to time
 Processed-form Approach
 the organization uses information in a processed form available from different
sources both inside and outside the organization
 Scan and Assess the trend
 Finally, the organization specifies relevant environmental trends and their behaviors
 Methods of Environmental Scanning
 Executive opinion method
 Under this environment is forecasted on the basis of opinion and views of
top executives.
 Delphi Techniques
 Outsides experts are used in scanning the environmental factors and their
impacts.
 Extrapolating method
 Under this method past information is used to predict the future.
 Scenario building
 Under this method‚ different scenarios that may reflect the future is built.
These scenarios address the contingencies and help in better understanding
the changes and impacts of the environmental factors.
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Said ahmed aw-abdulle

Purpose industry analysis

Purpose industry analysis

 Thepurpose of industry analysis is manifold. As an

entrepreneur trying to find your way in the industry of your
choice, you can use industry analysis to understand what your
position is, relative to the position that other players in the
industry have.
 You can use industry analysis to your advantage to identify
opportunities and threats within your environment, as well as
to plan for the future of your business, in the context of the
future of your industry.
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 The important of industry analysis include :
 It is an important element of any investment that one
wants to make
 Aids the companies to identify the potential
opportunities.
 Helps in analyzing the threats
 Helps to analyze the fit between internal management
preferences and the business environment.
 Helps in mitigating the risk of entering an extremely
competitive business.
 In order to succeed in a specific industry, it is
important for the business owners to analyze that
industry
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Yasmen abdikani ali

State of methods industry

analysis
The methods of industry analysis
 Competitive Forces Model
 The Competitive Forces Model is an important tool used in
strategic analysis to analyze the competitiveness in an
industry.
 the Competitive Five Forces Model, which includes the
following five forces:
 threat of potential new entrants
 intensity of rivalry / power of complementary goods
 Bargaining power of buyers
 Bargaining power of suppliers
 threat of substitute goods and/or services.
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 Broad Factors Analysis
 is widely used in strategic analysis and planning because it helps
companies determine the risks and opportunities in the marketplace
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 SWOT Analysis
 A SWOT Analysis is one of the most commonly used tools to assess the internal and
external environments of a company and is part of a company’s strategic planning
process.
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Maxamed kayse maxamed cali

Benefits of industry analysis

Benefits of industry analysis
it helps to assess the profitability of a particular industry
It is generally able to forecast the potential behavior of
the competitors
Helps to recognize and identify strategies that will prove
its worth
Helps to highlight the strength and weakness of an
organization with its analysis
Industry analysis pinpoints the area where strategic
changes will yield best payoffs
It emphasizes on the area where the industry trend
shows threats or even opportunities.
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 Can easily forecast demand and supply and consequently

about the financial gains
 Industry analysis helps the entrepreneur to know about the
position of his company relative to the competitors in the
industry.
 Industry analysis helps to discover untapped opportunities in
the industry.
 Industry analysis is a tool to develop a competitive strategy
that will act as the best defense against competitive forces
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