1. ANALYSING THE ENVIRONMENT
KATHMANDU UNIVERSITY SCHOOL OF MANAGEMENT
ANALYSING THE ENVIRONMENT

2. TYPES OF ENVIRONMENT Macro environment (General Environment)
Industry Environment
Competitive Environment
Internal Environment

3. Environment of a Firm General Environment Operating Environment FIRM
Internal
Environment

4. Environment Influences on a Firm
Possible Environment
Probable Environment
Immediate Environment
The Firm

5. Environment Influences on a Firm
Possible Environment
Probable Environment
Environment Slip
Immediate Environment
The Firm

6. External Assessment External audit:
Focuses on identifying & evaluating events beyond the immediate control of the firm

7. External audit focuses on:
External Assessment
External audit focuses on:
Increased foreign competition
Population shifts
Demographics (e.g., aging population)
Information technology

8. External Assessment External audit reveals:
Key opportunities
Key threats
Managers then formulate strategies:
Take advantage of opportunities
Avoid/reduce impact of threats

9. Aimed at identifying key variables that offer actionable responses
External Assessment
External Audit
Aimed at identifying key variables that offer actionable responses

10. STEPS IN ENVIRONMENT ANALYSIS
UNDERSTAND THE NATURE OF ENVIRONMENT
HOW CERTAIN IS THE ENVIRONMENT?
WHAT ARE THE REASONS FOR UNCERTAINITY?
HOW SHOULD THE UNCERTAINITIES BE DEALT WITH?

11. STEPS IN ENVIRONMENT ANALYSIS
AS UNCERTAINITY INCREASES, ENVIRONMENTAL CONDITIONS BECOME MORE DYNAMIC AND COMPLEX
DYNAMISM DEALS WITH THE RATE AND FREQUENCY OF CHANGE

12. STEPS IN ENVIRONMENT ANALYSIS
COMPLEXITY INCLUDES
DIVERSITY OF ENVIRONMENTAL INFLUENCES
AMOUNT OF KNOWLEDGE REQUIRED TO HANDLE ENVIRONMENTAL FORCES
INTERRELATIONS AMONG ENVIRONMENTAL FORCES

13. Three Stage Approach for Analysis
Stage I : Segmenting the environment
Stage II : Analyzing the segment
SCANNING THE ENVIRONMENT
MONITOR THE ENVIRONMENT
FORECASTING THE ENVIRONMENT
ASSESSMENT OF THE ENVIRONMENT
Stage III : Attributing weights to each segment

14. STEPS IN ENVIRONMENT ANALYSIS
TO UNDERSTAND THE NATURE OF ENVIRONMENT SEGMENT IT
DEMOGRAPHIC
ECONOMIC
SOCIAL
CULTURAL
POLITICAL
TECHNOLOGICAL
LEGAL

15. STEPS IN ENVIRONMENT ANALYSIS
2. ANALYSE AND UNDERSTAND EACH SEGMENT FOUR STAGES INVOLVED

16. STEPS IN ENVIRONMENT ANALYSIS
SCANNING THE ENVIRONMENT
DETECT THE CHANGES IN THE ENVIRONMENT
IMMENIENT RATHER THAN POTENTIAL
ALERT ORGANIZATION OF SUCH CHANGES
AMBIGUOUS AND ILL-STRUCTURED

17. STEPS IN ENVIRONMENT ANALYSIS
2. MONITOR THE ENVIRONMENT
TRACK THE CHANGES IN THE ENVIRONMENT
SEQUENCE AND SERIES OF EVENTS
IDENTIFY INDICATORS AND WATCH THEM
ASSEMBLE SUFFICIENT DATA TO DISCERN AN EMERGING PATTERN
MORE FOCUSED AND SYSTEMATIC

18. STEPS IN ENVIRONMENT ANALYSIS
3. FORECASTING THE ENVIRONMENT
DEVELOPMENT OF PLAUSIBLE PROJECTIONS OF DIRECTIONS, SCOPE, SPEED, AND INTENSITY OF ENVIRONMENTAL CHANGES
PROJECTIONS BASED ON TRENDS
PROJECTIONS BASED ON ALTERNATIVE FUTURE SCENARIO

19. STEPS IN ENVIRONMENT ANALYSIS
4. ASSESSMENT OF THE ENVIRONMENT
IDENTIFYING AND EVALUATING HOW AND WHY CURRENT AND PROJECTED ENVIRONMENTAL CHANGES WILL AFFECT STRATEGIES OF THE ORGANIZATION
DETERMINING IMPLICATIONS OF SUCH CHANGES, POSITIVE AND NEGATIVE

20. STEPS IN ENVIRONMENT ANALYSIS
3. ATTRIBUTE WEIGHTS TO EACH SEGMENTS
NOT ALL ENVIRONMENTAL CHANGES ARE SIGNIFICANT
ASSESS THE IMPORTANCE AND DETERMINE THE KEY FACTORS