Environmental Scanning

Environmental scanning involves surveillance of a firm’s external environment to predict future

environmental changes and detect changes already under way. Successful environmental scanning
alerts the organization to critical trends and events before the changes have developed a discernible
pattern and before competitors recognize them.

Environmental Monitoring

Environmental monitoring tracks the evolution of environmental trends, sequences of events, or

streams of activities. These are often uncovered during the environmental scanning process. They may
be trends that the firm came across by accident or were brought to its attention from outside the
organization. Ability to respond to these trends requires close monitoring, which involves closer ongoing
scrutiny. Monitoring enables firms to evaluate how dramatically environmental trends are changing the
competitive landscape.

Competitive Intelligence

Competitive intelligence helps firms better define and understand their industry and also identify rivals’
strengths and weaknesses. Competitive intelligence helps a company avoid surprises by anticipating
competitor’s moves and decreasing response time.

Competitive intelligence is:

• Information that has been analysed to the point where it is possible to make an appropriate decision

• A tool to alert management early to both threats and opportunities

• A means to deliver reasonable assessments. CI offers approximations of the market and competition.
It is not a peek at a rival’s financial books. Reasonable assessments are what modern entrepreneurs
need and want on a regular basis

• A way of life, a process. If a company uses CI the way it should be used, it becomes everyone’s job. It
is a process by which critical information is available to those who need it.

Environmental Forecasting

Environmental forecasting involves the development of plausible projections about the direction,
scope, speed, and intensity of environmental change. Its purpose is to predict change. A danger of
forecasting is that managers may view uncertainty as black and white and ignore important grey areas.
Either they assume that the world is certain and open to precise predictions, or they assume it is
uncertain and completely unpredictable. Underestimating uncertainty can lead to strategies that neither
defend against looming threats nor take advantage of opportunities. At the other extreme, if managers
assume the world is unpredictable, they may abandon the analytical rigour of their traditional planning
process and base strategic decisions on gut instinct