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ENVIRONMENTAL SCANNING

Genevieve F. Nagales
Instructor

August 28, 2014

LEARNING OBJECTIVES

Enumerate and discuss the market structure;


Discuss the five forces model of Michael
Porter;

Explain the five P strategies;

Define and discuss competitive intelligence; and

Know the meaning of SWOT analysis.

Global Environmental Analysis


Environmental Monitoring
EnvironmentalForecasting
Environmental Assessment

Environmental Scanning

Global Environment
Macro environment: industries,
markets, companies, clients and
competitors.

Environmental Scanning
A process of gathering, analyzing, and
dispensing information for tactical or
strategic purposes.

obtaining both factual and


subjective information

Kinds of Environmental Scanning


Ad-hoc scanning
Regular scanning
Continuous scanning

Kinds of Environmental Scanning


Ad-hoc scanning short-term, infrequent
examinations usually initiated by crisis.
Regular scanning studies done on a regular
schedule.

Continuous
scanning

continuous
structured data collection and processing
on a broad range of environmental factors.

Importance of Environmental
Scanning
Reveals current conditions of the market.
Helps managers predict the future characteristics
of the organizational environment.
Decisions made today will help the firm deal with
the environment of tomorrow.

ENVIRONMENTAL SCANNING
Process of conducting research through surveys,
observation and other methods, and gathering and
analyzing information for the organization.
The external environment has 2 parts:

Task Environment

Social Environment

MARKET STRUCTURE
Role of Market Structure
Managers would be able to predict market
outcomes through the extent of competition in the
market.
Structural Features of the Market

Market Concentration

Entry Barriers

Product Differentiation

MARKET CONCENTRATION
It is the degree by which a small number of
companies

dominate

particular

market.

It

explains a number of companies which are


competing in the market. It then predicts for new
entries on how to enter the market. In some
instances, it also provides decisions on what to
expect and whether it is possible to enter the
market at this time or in a particular period or
season.

TYPES OF MARKET
Based on market concentration, Brain and Qualls
categorized the following market structure based
on the number of sellers in the market.
1.

Atomistic Market

2.

Oligopolistic Market

3.

Monopoly Market

Entry Barriers
These refers to difficulties and challenges
by potential new entrants which are
entering the market.

Ease of Entry

There are no difficulties in entering the market.


New entrants will not have difficulty in entering
the market.
There are minimal barriers to entry and if there
are, they are manageable.

Moderately Difficult Entry

There are barriers but not too difficult for


sellers to monopolize the market. However, it
may be difficult to enter the market.
Sellers may monopolize the market.

Blockaded Entry

There are barriers that are too high which


potential players cannot enter.
The present companies monopolize the prices.
It is very difficult to enter the market.
More often than not, existing companies would
make it difficult for new players to enter the
market.

Product Differentiation

It refers to the degree by which a company is


able to distinguish its products or service to
other players in the market as valued by
consumers.
It is the uniqueness of the features in a
particular brand or service.
It is the ability to innovate and develop a certain
position, totally distinct from other brands.

Homogeneous Products

There are products that are highly identical. The


characteristics of the product are not
differentiated from one supplier to another.
The wet market is usually the popular place for
homogenous products like salt, fish, vegetables,
fruits, meat, poultry, among others.

Differentiated Products

There are products differentiated by design,


quality, branding, among others.
They have certain features which differentiate
them from one another.
These are branded products with distinctions on
features, design, and quality.
Their unique characteristics connote a certain
price.

Examples:

Carbonated drinks like CocaCola and Pepsi Cola.


Cellphones like Nokia and
Samsung.