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ANALYSIS OF BUSINESS ENVIRONMENT

Environmental Analysis The environmental analysis refers to the task of gathering the relevant information about the environment which can serve as an input for making strategic decisions. There are many pieces of vital information available in the environment. Such information should be gathered and analysed to understand the impact and implications of such an information on the organisation. For this purpose a thorough analysis, scanning and monitoring of the environment should be done. Need of Environmental Analysis: (1) (2) (3) (4) (5) (6) (7) (8) It is being conducted to create the understanding of current and potential change taking place in the environment. To gather the information for strategic decision making. Development of action plan to deal with technological advancement To keep oneself dynamic. It helps to understand the transformation of industrial environment. It help in identification of risk (cultural, social competitor, management, natural exchange rate. It is a pre requisite for the formulation of right strategies. It makes the managers aware of the organisation-environment linkage.

Steps in environmental analysis: The environmental analysis involves the following steps: (i) Scanning: It involves general surveillance of all environmental factors and their interactions in order to identify early signal of possible environments changes and detecting all these environmental changes that has already taken place. Scanning is ill structured and the relevant data for scanning unlimited, vague and imprecise.

(ii)

Monitoring: It involves tracking the environmental trends, sequence, of events

and streams of activity. It frequently involves the indicators unveiled during environmental scanning. The purpose of monitoring is to assemble sufficient data to discern whether certain trends and patterns are emerging. Thus monitoring progresses the imprecise data into precise form. (iii) Forecasting: It is concerned with developing predictions of the direction, scope

and intensity of environmental change etc. Forecasting is well focused and more complex activity. It is future oriented and acts as an essential element in environmental analysis. (iv) Assessment: Scanning, monitoring, forecasting are not ends in themselves unless

their outputs are assessed to determine implications for the organization on current and potential strategies. Assessment involves identifying and evaluating how and why current and projected environmental changes will effect strategic management of organization. Assessment therefore tries to answer the question such as: what are the key issue presented by the environment and what are the implications of such issue for the organization. Limitations of environmental analysis: It does not eliminate uncertainty of the organization completely because environment itself is very dynamic. So the environmental analysis cannot be done with too much of accuracy. Environment sometimes confront unexpected events which have not been anticipated earlier . If information is very fast than there can be over loading of information, this may create certain discrepancies. It is not a sufficient guarantor of organization effectiveness. It is only an input for strategic development.

How use it :
1. Internal Analysis: Examine the capabilities of your organization. Carefully examine all your strengths and weaknesses. Draw ideas from projects that you have both successfully and unsuccessfully completed. 2. External Analysis: Look at the main points in the environmental analysis, and identify those points that pose opportunities for your organization, and those that pose threats or obstacles to performance. Carefully examine the market in which you intend to launch the product and analyse what the status of the competition.

SWOT AnalysisSWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a way of summarizing the current state of a company and helping to devise a plan for the future, one that employs the existing strengths, redresses existing weaknesses, exploits opportunities and defends against threats. SWOTs usually reflect a person's existing position and viewpoint, which can be Misused to justify a previously decided course of action rather than used as a means to open up new possibilities. It is important to note that sometimes threats can also be viewed as opportunities, depending on the people or groups involved. An optimist is one who sees an opportunity in every difficulty. A pessimist is one who Sees difficulty in every opportunity. - Sir Winston Churchill SWOTs can allow companies to take a lazy course and look for 'fit' rather than to 'stretch'; they look for strengths that match opportunities yet ignore the opportunities they do not feel they can use to their advantage. A more active approach would be to involve identifying the most attractive opportunities and then plan to stretch the company to meet these opportunities. This would make strategy a challenge to the organisation rather than a fit between its existing strengths and the opportunities it chooses to develop (Glass, 1991).

Strengths:
Identify skills and capabilities that you have. What can you do particularly well, relative to rivals? What do analysts consider to be your strengths? What resources do you have? Is your brand or reputation strong?

Weaknesses:
What do rivals do better than you? What do you do poorly? What generates the most customer dissatisfaction and complaints? What generates the most employee dissatisfaction and complaints? What processes and activities can you improve?

Opportunities:
Where can you apply your strengths? How are your customers and their needs changing? How is technology changing your business? Are there new markets for your strengths? (e.g. foreign) Are there new ways of producing your products? Are your rivals customers dissatisfied?

Threats:
Are customers able to meet their needs with alternative products? Are customers needs changing away from your product? What are your competitors developing? Are your rivals improving their product offerings or prices? Is new technology making your product obsolete? Is your cash-flow and debt position healthy? Are your employees satisfied? Is turnover high? Is new competition coming? Are sales growing slower than the industry average?

PROJECT REPORT ON BUSINESS ENVIRONMENT


TOPIC ANAYLSIS OF BUSINESS ENVIRONMENT
AMRAPALI INSTITUTE OF MANAGEMENT AND COMPUTER APPLICATION.

SUBMITTED TO:Mr.Neeraj Nautiyal

SUBMITTED BY:

BBA

Acknowledgement
I would like to thank my Project Guide Mr. Neeraj Nautiyal for his immense guidance, valuable help and the opportunity provided to me to complete the project under her guidance. Last but not the least, my gratitude to great almighty and my parents without whose concerned and devoted support the project would not have been the way it is today.