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BUS 101-Richardson

Environmental Scan Methods

Definition Of Environmental Scan

Environmental Scan, an examination of the external and internal environments:

  • External environment: political/legal/regulatory, economic, socio-cultural, technology, environment (PEST or PESTEL Analysis).
  • Industry environment: new entrants, suppliers, buyers, product substitutes, intensity of rivalry, position of the firm in the industry (Porter's Five Forces Analysis). 
  • Firm-level: strengths, weaknesses, opportunities, threats (SWOT Analysis). 

There isn't an article or report called "environmental scan." This is something that you must write yourself by synthesizing information from multiple sources.

Consider industry-specific forces: e.g., for the automobile industry, factors like gas price, new technologies, environmental concerns, changes in consumer preferences, infrastructures, industry/government incentives, global/foreign competitions, etc..

Consider broader forces: economy and disposable income, social media, mobile technology, consumer health, globalization, population change (e.g., immigration, aging), etc..

Recommended sources: most databases featuring company profiles or industry profiles will have some information on environmental factors and their impact on the company or industry. Industry association websites should have some free information about trends and developments. In addition, follow current events in the news and search for current articles related to the company or industry. Synthesize the information and use your own words.

PESTEL/PEST Analysis: there are no readily available "PEST/PESTEL reports" in library databases. Best bets:

  • 10-K: esp. the sections Risk Factor and MD&A. 
  • IBISWorld: esp. sections like Industry Performance (esp. the Key External Drivers), Industry Outlook, Products & Markets, and Operating Conditions.

Five Forces Analysis: