Scanning of Environment Meaning Spotting and Product identification Importance Factors Important questions Exit

Meaning
The word Scan means to examine closely, especially in search of something. Scanning of environment is thus a close examination of the environment to Develop an understanding of the Socio-cultural Economic Political And developmental factors in order to ensure that the perceived entrepreneurial opportunity is compatible with them. Only then will the project become a viable and sustainable enterprise in the long run.

The flow chart shows that an opportunity perceived by the entrepreneur should be tested against important environmental parameters to arrive at a sound business choice.

Spotting an opportunity

Scanning of environment

Environment scanning only makes a project viable and sustainable in the long run.

Identification of product service

Starting project

Importance
Environment means surrounding. Environment of a business means forces (economic, social, political, technological) And institution (suppliers, customers, competitors etc.) Outside the firm with which and entrepreneur most deal to achieve its goal. All perceived ideas may not become successful project. They have to be carefully examined against a number of environmental factors.

Business Environment

Economic Environment

Non-Economic Environment

 Socio-Cultural Factor

Political Factor
Economic Factor Legal and Financial Factors Developmental and institutional support Factors

Click each point to view the detail

Socio Cultural Factor : Socio-cultural factors involves a close study of the life styles, beliefs, customs, conventions, practices etc. Expectations of individuals, Their Preferences, Age group And education will also form a part of this study. Example : An entrepreneur decides to open a chain of retail outlets to sell trendy T-shirts and other accessories like high heel shoes, cosmetics etc. Will he open them in rural areas? Of course not. He will target the urban population. Thus the socio-cultural factor plays an important role in evaluating a business concept.

Political Factor : For entrepreneurship to thrive, a conductive political climate is necessary. The rules and regulate the market forces are framed and promulgated by the government. A Government which gives priority to growth of trade, industry and commerce will provide a great help to entrepreneurship. Improving infrastructural facilities will also encourage new business ventures.

Economic Factor :

Important variables like supply and Demand have to be studied closely. Detail of consumer trends, economic preferences, costing, discounting etc are all economic decisions. For instance ceiling fans and air-conditioners are sold at a discount during winter season to clear the stock.

Legal and Financial Factors :

Legal scanning of the environment demands Analyzing the legal requirements in the establishment of a project, managing the project and also getting assistance from different sources.

Finance is one of the most important resources for starting and running an enterprise. Finance is the life blood of the business.
Scanning of environment for finance will yield important information about financial institutions and other sources to raise funds for an enterprise.

Developmental and institutional support Factors :

There are many governmental and non governmental agencies that extend support, guidance and expertise to entrepreneurs. They will provide valuable advice and direction in the selection of product or service

From what do entrepreneurs spot opportunities?

Entrepreneurs spot opportunities by analyzing the needs and problems that exists in the environment.

What is the crucial requirement for successful venture?

scanning of environment is the crucial requirement for a successful venture.

What are the three steps involved in the process of sensing entrepreneurial opportunities requires 3 steps to be taken by entrepreneur :

1. Scanning of environment : close examination of environment. 2. Generation of ideas : study of ideas 3. Identification of product or services

All Perceived ideas may not become successful projects Explain.

All perceived ideas may not become Successful projects. They have to Be carefully examined against a number Of environmental factors. Example : when minister of state of our country promoting poultry farming in his constituency in the late sixties when the country witnessed a boom in agriculture, poultry farming, milk production, while similar project were thriving in neighboring areas, but it was completely disaster in the ministers constituency. The constituents were predominantly vegetarians and concept was alien to their cultural sensibility. The minister had failed to evaluate his idea against environmental factors.

Enterprise Process Diagram

E N V I R O N M E N T

Environment

Problems

Opportunity spotting
Needs

Creativity And ideas

Innovation And product

Project
business

E n v i r o n m e n t