ENVIRONMENTAL SCANNING

Pradip Chanda
NTPC Corporate Planning

WHAT IS ENVIRONMENTAL SCANNING?

A kind of radar to scan the organisations external environment systematically Acquisition and use of information about events, trends and relationship. Signal the new, unexpected, the major and the minor. Not only covers competitors, suppliers and customers, but also includes technology, economic condition, political & regulatory environment and social and demographic trend. It includes strategy

WHY ENVIRONMENTAL SCANNING?

Research suggests that

It improves organisational performance. Coupled with strategy, it can be effectively in the planning process. It increases communication and discussion about future issues. Coupled with information on external change, it can promote generative organisational learning. It manages the sustainability.

OBJECTIVES OF ENVIRONMENTAL SCANNING Detecting scientific, technical, economic, social and political trends. Define the potential threats, opportunities or changes for alternative. Promoting a future orientation in the thinking of management and staff Alerting management and staff to trends that are converging, diverging, speed up, slowing down or interacting.

INFORMATION-SEEKING FRAMEWORK

MODES OF ENVIRONMENTAL SCANNING

Scanning Modes Information Need Information Use Amount of Targeted Effort Number of Sources Tactics

Undirected Viewing

General areas of interest; specific need to be revealed

Serendipitous discovery "Sensing"

Minimal

Many

- Scan broadly a diversity of sources, taking advantage of what's easily accessible - "Touring"

Conditioned Viewing

Able to recognize topics of interest

Increase understanding

Low

Few

- Browse in pre-selected sources on pre-specified topics of interest

"Sensemaking"

- "Tracking"

Informal Search

Able to formulate queries

Increase knowledge within narrow limits "Learning"

Medium

Few

- Search is focused on an issue or event, but a good-enough search is satisfactory - "Satisficing"

Formal Search

Able to specify targets

Formal use of information for planning, acting "Deciding"

High

Many

- Systematic gathering of information on a target, following some method or procedure - "Retrieving"

MODES OF ENVIRONMENTAL SCANNING

BEST PRACTICES IN SCANNING

Scanning as a strategic activity. Implementing scanning as a formal system. Partnering with IT and domain expert for designing the scanning sys. Manage information as the core of scanning. Balance the tension between control and creativity. Looking at information to looking for information..

GETTING STARTED
SWOT ANALYSIS STRENGTH - Inherent capacity which an organization an use to gain strategic advantage over it competitors WEAKNESS - Inherent limitations or constraint which creates a strategic disadvantage OPPORTUNITY - a favorable condition in the organizations environment which enables it to consolidate and strengthen its position THREAT - an unfavorable condition in organizations environment which creates a risk or causes damage to the organization

GETTING STARTED
FIRST TO DECIDE THE LEVEL OF SCANNING WHETHER IRREGULAR, PERIODIC OR CONTINUOUS. RESOURCE ALLOCATION ACCORDINGLY. SEEK SIGNS OF CHANGE. LOOK FOR POTENTIAL EVENTS ON THE HORIZON. LOOK FOR FORECASTS OF EXPERTS. LOOK FOR INDIRECT EFFECTS. WRITE ABSTRACTS.

GETTING STARTED
SOURCES OF INFORMATION

Documentary or secondary sources - Magazines, newspaper, journals, books, trade &industry Assn. publication, Govt. Publication, Annual report of competitor company Mass media Internal sources - employees, files, MIS, documents

GETTING STARTED
SOURCE OF INFORMATION

EXTERNAL AGENCIES - Customers, marketing intermediaries, suppliers, trade Assn., Govt. Agencies FORMAL STUDIES - Consultants, Educational Institutions, in-house

AREA OF SCANNING
TECHNOLOGICAL Transportation capability Mastery over energy Ability to alter character of material Mechanization of physical activities telecommunication network SOCIAL Population, demographic data Spread of literacy Income distribution Social Values Ethical standards Concern for health

AREA OF SCANNING

ECONOMIC GDP, Growth rate Money supply BOP Policies and regulations POLITICAL Regulatory Legal provisions Stability of Government

WRITING ABSTRACT
Indication where the opportunities exist Grasp of the major sources of threats to the industry Indication of the critical requirement for success in the industry SUPPLIERS - shortage, location, cost, quality MARKETING INTERMEDIARIES - distribution channels, transporters, advertising & marketing research firms - absence or presence

WRITING ABSTRACT
MARKET TYPES - consumer markets, industrial markets, institutional markets, international markets, resellers markets - stable or volatile MARKET DEMAND Quantum - Volume / value Behaviour - Seasonally Structure - OEM + replacement, household consumers, concentration of consumers

WRITING ABSTRACT

FINANCIAL CLIMATE - Availability of funds, Incentives, exemptions REGULATORY ENVIRONMENT - Free trade zones, sales tax, tax rebates - central/state Govt.

NTPC CONTEXT

NTPC ENVIRONMENT
Macro Environment Micro environment

Internal Environment ORG.

INTERNAL ENVIRONMENT
Culture Competency Creativity

Commitment

Social

Internal Env

internal Factors
Organisational climate survey to understand
Strength & weakness Social & cultural stability Adaptability to change Nurturing creativity.

Bodh and Disha are approach by NTPC to understand the internal environment

Marketing Intermediaries Suppliers

Market Types

Market demand

Competition

MICRO ENVIRONMENT

Financial Institutions

Regulatory Provisions

Industrial relation climate

Availability of skilled manpower

Issues
Regulatory risk.
Mitigation through policy advocacy Regulatory strategy

Fuel risk
Alternative resources Fuel mix strategy

Fund sourcing
Through Market Loan

Land, water

Issues
Technology risk.
Adoption Indigenization

Utilization of capacity & Realization

Market study Security mechanism.

Climate change mitigation

CDM approach Renewable.

Process
Where do we want to see ourselves may be 20 years henceforth?.
Vision and mission statement and revisiting the same. Management agenda Dynamic Corporate plan Alternative business opportunity. Research and development requirement. Extensive training for capability development Building relation with customer (CRM) Building image in the market Returning to the society (CSR).

OPPORTUNITY MATRIX

High
Attractiveness Low

Very Attractive
Moderately Attractive

Moderately Attractive
Least Attractive

High Low Probability of occurrence

THREAT MATRIX
High Seriousness Low Major Threat Moderate Threat

Moderate Threat

Minor Threat

High Low Probability of occurrence

IMPACT MATRIX
Trends Probability Impact on strategies of occurrence S1 S2 S3 S4 T1 T2 : Degree of quality of impact of each trend on different strategies using impact scale +2 Extremely favorable Impact +1 Moderately favorable Impact 0 No Impact +1 moderately unfavorable Impact -2 Extremely unfavorable Impact

THANK YOU