Environmental scanning tools are methods used by managers to collect, analyze and interpret information about internal and external environment so that they can identify:
They help convert “environmental information” into strategic decisions.
SWOT is a simple tool that summarizes internal and external factors:
Important: Strengths/weaknesses are internal, opportunities/threats are external.
Mini SWOT for an online food delivery startup:
From this, a strategy could be: improve route planning (strength) to reduce delivery cost (weakness) and compete better (threat).
Porter’s Five Forces is a framework to analyze industry competitiveness and profit potential by studying five forces:
Higher overall force pressure → lower profit potential (generally).
Access the complete note and unlock all topic-wise content
It's free and takes just 5 seconds
From this topic
SWOT analysis identifies internal strengths/weaknesses and external opportunities/threats.
Significance (any three):
Porter’s Five Forces:
These forces decide the intensity of competition and profit potential in an industry.
Definition of Business Environment is sum or collection of all internal and external factors such as employees, customers needs and expectations, supply and demand, management, clients, suppliers, owners, activities by government, innovation in technology, social trends, market trends, economic changes, etc.
Download this note as PDF at no cost
If any AD appears on download click please wait for 30sec till it gets completed and then close it, you will be redirected to pdf/ppt notes page.
Environmental scanning tools are methods used by managers to collect, analyze and interpret information about internal and external environment so that they can identify:
They help convert “environmental information” into strategic decisions.
SWOT is a simple tool that summarizes internal and external factors:
Important: Strengths/weaknesses are internal, opportunities/threats are external.
Mini SWOT for an online food delivery startup:
From this, a strategy could be: improve route planning (strength) to reduce delivery cost (weakness) and compete better (threat).
Porter’s Five Forces is a framework to analyze industry competitiveness and profit potential by studying five forces:
Higher overall force pressure → lower profit potential (generally).
If it is easy for new firms to enter, competition increases.
Substitutes satisfy the same need differently.
If buyers have many choices, they can demand lower prices/better quality.
If suppliers are few or provide unique inputs, they can charge more or reduce quality.
More rivalry means price wars, heavy advertising, fast innovation.
Five Forces helps managers to:
Scenario planning is a technique where managers create a few possible future situations (scenarios) and plan responses for each.
It is useful when the environment is:
Purpose:
Scanning tools (SWOT / Five Forces / Scenarios) → Insights → Strategy choice → Action plan → Review
If these notes helped you, a quick review supports the project and helps more students find it.
SWOT summarizes internal and external factors:
Mini example (local bakery):
Thus, SWOT helps convert understanding into a practical strategy (e.g., start delivery to use opportunity and reduce weakness).