Environmental Scan Critique
Environmental scan template
Table of Contents 1. Introduction 3 2. Filters 3 2.1 Filter example: Type of market 3 2.2 Filter example: Country population 3 3. Template 3 4. Combination of strategy and foreign market conditions 7 5. Further opportunities for action 8 6. Sources 9
Table of Figures
Figure 1: Combination of PEST analysis and strategy……………………7
Introduction
Scanning the external environment is critically important to ensure the success of firms operating or expanding globally. It helps to implement well informed decisions which may include; expansion, innovation, alliances, entering or leaving a market, hence identifying the opportunities (or threats) before your competitors. The external environment can be split into six different factors to scan the environment more effectively. An approach for this is the PEST analysis. PEST stands for political, economic, social and technological. The strategy of the firm and the results of the PEST analysis should fit together to guarantee a successful market entry. A firm is affected by those four external factors which are examined by the following template relating what information should be captured by the firm, and why this information should be captured.
Filters
The use of filters allows a firm to lower the number of 200 countries and country-markets before spending time utilizing the template. Most of those 200 countries are completely unsuitable for a market entry because of specific reasons. (Hill, Cronk, Wickramasekera 2008)
Filter example: Type of market
It would be improper to enter a market with a command market economy. This is because decision-making would be controlled by the government and would lower a firm’s flexibility. A country market that is controlled by the government drops out of a more detailed examination. (Gulya, M. 2012)
Filter example: Country population
A country with a low population can be improper for some types of mass
Table of Contents 1. Introduction 3 2. Filters 3 2.1 Filter example: Type of market 3 2.2 Filter example: Country population 3 3. Template 3 4. Combination of strategy and foreign market conditions 7 5. Further opportunities for action 8 6. Sources 9
Table of Figures
Figure 1: Combination of PEST analysis and strategy……………………7
Introduction
Scanning the external environment is critically important to ensure the success of firms operating or expanding globally. It helps to implement well informed decisions which may include; expansion, innovation, alliances, entering or leaving a market, hence identifying the opportunities (or threats) before your competitors. The external environment can be split into six different factors to scan the environment more effectively. An approach for this is the PEST analysis. PEST stands for political, economic, social and technological. The strategy of the firm and the results of the PEST analysis should fit together to guarantee a successful market entry. A firm is affected by those four external factors which are examined by the following template relating what information should be captured by the firm, and why this information should be captured.
Filters
The use of filters allows a firm to lower the number of 200 countries and country-markets before spending time utilizing the template. Most of those 200 countries are completely unsuitable for a market entry because of specific reasons. (Hill, Cronk, Wickramasekera 2008)
Filter example: Type of market
It would be improper to enter a market with a command market economy. This is because decision-making would be controlled by the government and would lower a firm’s flexibility. A country market that is controlled by the government drops out of a more detailed examination. (Gulya, M. 2012)
Filter example: Country population
A country with a low population can be improper for some types of mass