Environmental Scanning Environmental scanning is the (A) monitoring, (B) evaluating, and (C) disseminating of information from the external and internal environments to key people within the organization. It is accomplished by conducting research through surveys, observations, record keeping, checking and updating plus other methods to gather information. Its purpose is to identify strategic factors that will determine the future of the organization. The identification of strategic factors affecting the organization enables the company to prepare strategies that would allow it to compete better with its rivals.

Environmental scanning is done before strategy formulation begins. Factors identified in this process are considered inputs to the strategy formulation process. However, environmental scanning factors should be monitored all throughout the strategic management process as these forces change overtime.

Levels of Business Environment The business environment is composed of several levels. Scanning should be done on all levels to ensure that relevant factors are carefully considered. An examination of these various levels is done to identify trends and movements that may influence the success of the firm. The figure below shows the different levels in the business environment.

Societal Environment: - This is the outermost level in the business environment which may directly or indirectly affect business operations. - It is composed of several factors namely:

• Socio-cultural Factors These refer to characteristics of the population, their cultural beliefs and values.
• Economic Factors These factors refer to availability and distribution of factors of production, income and expense patterns and inflationary conditions
• Politico-legal Factors under these are the laws, rules and regulations that may impact the operations of the firm.
• Technological These are changes in processes and methods used in production or provision of services.

-The analysis of the societal forces is done through STEEP or PESTLE analysis in external scanning

2. Task Environment

• This is the level of the environment that is directly outside of the firm.
• The firm also directly interacts with forces in this level.
• Sometimes called the competitive environment, this includes stakeholders of the company such as suppliers, shareholders, competitors, government, customers, special interest groups and communities.
• The analysis of this level is performed under external scanning through Porter's Five Forces Framework of Industry Analysis

3. Internal Environment

• This is the company environment which includes the structure of the organization, the processes used, the policies implemented and the resources utilized by the organization.
• The analysis of this level is done using the Seven-S Framework under internal scanning

Company: Nestle

1. What are the (5) strengths of Nestle in Environmental Scanning?

2. What are the (5) weaknesses of Nestle in Environmental Scanning?

3. What are the (5) opportunities of Nestle in Environmental Scanning?

4. What are the (5) threats of Nestle in Environmental Scanning?

5. Explain the bases of these factors.