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Environmental Scan: Why, When, How

Value to Marketing, Finance, Business

What is an Environmental Scan?

Environmental scanning is a crucial phase of developing a marketing plan. It is the process of gathering all kinds of information to determine if  the market for a product or service would be beneficial to the company. 

Brown and Weiner (1985) define environmental scanning as "a kind of radar to scan the world systematically and signal the new, the unexpected, the major and the minor" 

The basic purpose of environmental scanning is to determine the future direction of the organization, for example , whether the company will invest in or bring to market a particular product.

Components of Environmental Scans

When a company performs environmental scanning, it looks for a range of things that can affect future operations. These fall under broad categories that can include:

  • Demographics – locally, regionally, nationally, and increasingly internationally (e.g., population, racial/ethnic mix, immigration status, education levels, etc.)
  • Politics and public policy – changes in governmental regulation, federal financial aid policies, and public attitudes toward institutions of higher education
  • Economies – local, regional, national and international
  • Labor market – the demand in relevant fields and the associated skills desired by employers
  • Academic interests – popular fields and the employment interests of prospective students and their families
  • Technology – the increasingly rapid changes in which bear on nearly every aspect of higher education
  • Research – changes in interests and funding from governmental, private and foundation sources
  • Philanthropy – changes in available funding and in the attitudes, interests, and approaches of donors

Consider industry-specific Forces 

The automobile industry:

• gas price
• new technologies
• environmental concerns
• changes in consumer preferences
• infrastructures
• industry/government incentives 
• global/foreign competitions

Consider broader forces

• economy and disposable income
• social media
• mobile technology
• consumer health
• globalization
• population change (e.g., immigration, aging)

from Portland State Library, Business Strategy: Environmental Plan

Porters Five Forces

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