The Purpose of Scanning the Market Environment (150)
Because of the advancement in technology, the majority of the businesses work in an information economy whereby the success of an organization relies on knowledge than the resource they possess. Therefore, in this perspective, competitiveness is primarily on the capability to obtain, treat, and utilize informative materials effectively to make company decisions. The environment in which an entity operates can create challenges and opportunities for the syndicate, surge the level of ambiguity, and can lead to information search (de Lorenzi, Junior & Rossetto, 2014). Due to the uncertainty created by the surrounding, managers need to scan their environment to avoid being overtaken by risks and enabling the enterprise to function as an open system.
Environmental scanning (ES) refers to a tool utilized by organizations to analyze their surrounding, and its efficiency relies on some underlying aspects. Studies indicate that ES is an essential component since the process allows businesses to work as an open system, and it enables managers to change marketing techniques based on the prevailing environmental conditions. Notably, numerous enterprises perform ES primarily to identify the available market opportunities and use this chance to expand their consumer base. Besides, ES is done by companies for maximum use of resources such as labor and capital; thus, assists the syndicate to avoid wastage of materials (Kerin & Hartley, 2019). Firms scan the environment mainly to recognize and comprehend the external stimuli that might impact the business and build an effective response that protects and enhance the institution’s performance.
By conducting environmental scanning, marketers hope to identify the external factors that are likely to hinder the business from reaching its goal and develop strategies to respond to such forces. After performing ES, marketers hope to recognize the weaknesses of the organization and capitalize on it to the benefit of the firm.