A business organisation has short term and long-term objectives.Proper analyses of environmental factors help the business firm to frame plans and policies that could help in easy accomplishment of those organisational objectives.Analysis of business environment helps to identify strength weakness, opportunities and threats.
The firm should make every possible effort to grab the opportunities as and when they come.
Business is subject to threat from competitors and various factors.
Environmental analysis will help the firm to understand what is happening both inside and outside the organization and to increase the probability that the organisational strategies developed will appropriately reflect the organizational environment.
Environmental scanning is necessary because there are rapid changes taking place in the environment that has a great impact on the working of the business firm.
It involves looking at the strengths and weaknesses of your business' capabilities, and any opportunities and threats to your business.
Once you identify these, you can assess how to: See our SWOT analysis example.The following is the need and importance of environmental scanning: Strength of the business firm means capacity of the firm to gain advantage over its competitors.Analysis of internal business environment helps to identify strength of the firm.Study of environmental analyses enables the firm to select the best option for the success and growth of the firm.Business analysis models are useful tools and techniques that can help you understand your organisational environment and think more strategically about your business.Systematic analyses of business environment help the firm to maximise their strength, minimise the weakness, grab the opportunities and diffuse threats.This enables the firm to survive and grow in the competitive business world.Environmental analyses help them to identify threat from the external environment.Early identification of threat is always beneficial as it helps to diffuse off some threat.Task 1 Discuss the importance of environmental analysis in managing business organisations.An environmental analysis in plays an essential role in business management by providing possible opportunities or threats outside the company in its external environment.