You need to analyze and scan the environment of your organization to be able to create a basis for your strategy. With this, you’ll be able to determine the effects of the external forces to your organization and be able to adapt to its changes and survive. This is important for it gives you an idea on how to operate, makes you aware of your environment and be able to offer your product at the right place. Failure to examine the outside forces might just lead to a misfit or downfall of your business.
Based on the article “How to Use Environmental Analysis in Strategy Making”, it says that “An environmental analysis helps an organization achieve compatibility with its environment.” Some organizations are said to be strategically located as it fits in, may it be with the place, the people living within the area, less competitors and other factors that contribute to the viability of the business. If you have successfully evaluated the environment of your organization, you’ll know if your business will sell or not in your chosen area.
Scanning the environment helps you to decide and turn the threats into an advantage. According to Kendra Albright’s “Environmental Scanning: Radar for Success”, it mentioned that “…Environmental scanning is a method for identifying, collecting, and translating information about external influences into useful plans and decisions.” The information you have gathered through the environmental scanning can become your basis in creating your strategies where you can start planning and making decisions. In knowing those informations and being updated with your environment through monitoring, you’ll be able to use the strengths and weaknesses of your organization to respond to the threats or issues of the external forces.
In the same article “Environmental Scanning: Radar for Success”, it also says that “Influences of [external environments] can negatively affect an organization, resulting in poor performance or ultimate failure.” This is why scanning is important as it determines the effects of these influences, may it be positive or negative, to your organization. You can anticipate certain contingencies and be able to plan and prevent it for the future and resulting to the survival of your business.
Therefore, scanning and analyzing the environment of your organization is a must. You don’t just build your business in one place but you also check if it will survive in the area and know the pros and cons if you put it there. As an entrepreneur, it is important for us to determine if our business will be viable in our chosen area to operate. Knowing the external forces will help us adapt, plan and create strategies that will suit the industry’s environment and from there we will be able to organize and strategize for the growth and survival of our business.