The environment speaks on behalf of the market: this is something that every strategist should bear in mind. That is how important and tedious environmental scanning should be before making any decision and strategies. Of course, as entrepreneurs, the best way to start a business is to look for market niche: an environment where the product would not only be viable and accepted but also a place where there is less competition. Through the help of environmental scanning, a proper strategy could be implemented more effectively.
Because of the rapid changes in today’s marketplace and new emerging business practices, it is easy for an organization to fall behind by not being able to keep up. Environmental Scanning reduces the chance of being blind-sided and helps in greater management. It allows an organization to address external competitive, social, economic and technical issues that may be hard to identify and are persistent.
The focus of environmental scanning is on strategic thinking and planning. Its value comes from the identification and understanding of complex issues facing the organization. Environmental scanning helps an organization form a strategic position from which it can address external forces over which it has little, if any, control. This organizational learning process is a key component to organizational success.
Environmental scanning helps to focus the organization’s strategies and tactical plans on these external forces that may threaten its stability and turn those potential problems to its advantage. Therefore, environmental scanning is integrally linked to organizational and strategic planning and plans for unexpected changes that will affect the organization. Environmental scanning is simply the stepping stone into strategy making that will completely make a change the organization as a whole.
Environmental scanning is the smartest way for an organization to study its market first before going into decisions. Of course, it is most certainly important to know who your market is, but knowing is not enough: you must actually see the environment where you are planning to open up a business because you may have a market but it might not actually suit the business well. Knowing and understanding are two different things. As a strategist, you must have the ability to look into the bigger picture in order to make the right strategy.