Market Landscape Research
What is an Environmental Scan?
This term or its equivalents refers to a process one can use to identify the most relevant factors that can be analyzed to assess opportunities or threats. Managers and strategic planners can use this tool to keep a constant eye on their markets and where their company fits in.
The factors of interest that are described below are often grouped and more easily remembered by the acronym PEST or PESTLE, depending upon whether the last two (L and E) are considered important to the business decisions that evolve from the scan.
What are the key factors?
Any or all of the following will at some time have an impact on a given industry and its players:
Political
Restrictions on the import or export of certain goods might limit your market or hamper your ability to obtain raw materials. At a local level, restrictions on the types of businesses permitted in certain districts or the kinds of services available might impact your ability to run your business in these areas. Examples include Government policies, laws and regulations, and tariffs.
Economic
Depending on your business, each of these economic factors can have an impact on how you plan your financial strategy.
- Taxes;
- Changing rates of inflation, unemployment, interest, and foreign exchange;
- Disposable income levels.
Social
As society changes and adapts over time, business opportunities will as well. One should take into account such influential factors as
- Education levels
- culture
- demographics
- distribution of wealth
- predominant religions,
- different lifestyles,
- housing standards,
- birth rate
Technological
Technology can make some businesses obsolete in a very short period while creating enormous opportunities for new ones. Digital innovation is transforming society, products and businesses. Properly used, advances in such areas as transportation and communications can make your own company more efficient and productive. Examples include New and innovative products and services and their rates of introduction and decay.
Legal
It is vital to operate your business in a way that complies with the law of the land(s). In some cases it can be used offensively, and others as a defense against competition. At other times, strictly following the law can be a way to attract and maintain good and loyal personnel. Examples include Employment, health and safety regulations; product, competitive and patent regulations.
Environmental
Being aware of and planning for environmental factors can help a business both locally and globally. Using renewable energy can save money, but also have a positive impact on how your company is viewed by consumers. Examples include Weather (especially flood, heat, snow anomalies), energy usage, and waste disposal.
How do you do an Environmental Scan?
Almost all of the required information for an environmental analysis can be gathered by using a variety of market research techniques.
- “Desk” or Secondary Data Collection involves a review and organization of information trends and news reports on websites, in journals, newspapers and other media, both online and in print.
- Surveys and Interviews (online, on the phone or in person) can be conducted across different segments of your environment and each can shed light on specific factors of interest.
- Trade show visits, with a set of predetermined objectives can illuminate one’s knowledge of emerging products, trends and companies.
Because there are so many factors, and so much information to collect, organize and analyze, it is useful to identify, evaluate and hire outside, third-party firms to assist with these tasks and shorten the time necessary to make informed decisions.
Moving Forward
Implement a “SWOT” analysis to assess Strengths, Weaknesses, Opportunities and Threats.
- An up-to-date environmental scan should identify the major opportunities and threats facing a business and help plan for its future.
- When taken together with an internal review of that business’ strengths and weaknesses, one will be in a better position to develop a robust strategy and business plan supported by well executed market research.
About SIS Strategy
SIS Strategy conducts environmental scans in your market and worldwide. We have over 40+ years experience and are a founding member of the Strategic and Competitive Intelligence Professionals organization.