5.2: Environmental Scanning: SWOT and PEST Analysis

• “Being the “first” in the industry is admirable, but maintaining to stay on top means that a firm must be open to changes that may happen in the future.”

The Firm

Firm, Industry, and Business 

• Profit 

• Barter System 

• Opeations 

Firm & Industry 

• Group of firms 

• Needs & Wants 

• Raw Materials 

Environmental Scanning

It is the process of evaluating the macro environment and task environment to identify the potential changes that may pose a threat or opportunity to the industry.

Internal Environment

External Environment

Types of Firm’s Environment

• Inside the organization

• Management System

• Communication Structure

Internal Environment

Macro Environment

Pest Analysis

examples of external environment

• Operating Environment

• Customers

• Suppliers

• Competitors

Macro Environment

• Political 

• Economic 

• Social 

• Technological 

PEST Analysis

• Government System

• Democratic

• Free Market

Political

• Capital Cost

• Consumer Demand

Economic

• Demographics

• Beliefs

• Values

Social

• Advancements

• Innovations

• Automation

Technological

• Strengths, Weaknesses, Opportunities and Threats

SWOT Analysis stands for

• Company’s Attribute

• Competitive Edge

• Positive Reputation

• Market Leader

Strengths (Internal)

• Attributes that needs improvement

• Lack of access in technology

• Poor Location and transportation system

Weakness (Internal)

• Events that gives positive impact

• New Markets

• Additional source of materials

Opportunities (External)

• Negative Impact

• Trends

• Increase in Price

• New Competitors

Threats

SWOT Analysis – Questions to Consider

• What does your company do better than others?

• What aspects of the company needs to be improved?

• What trends/conditions can positively impact your company?

• What trends/conditions can negatively impact your company?