What Are the Key Components of Environmental Scanning?
Environmental scanning involves analyzing various external factors, commonly categorized as PESTLE (Political, Economic, Social, Technological, Legal, Environmental). Each component plays a vital role:
Political Factors: Legislation, government policies, and political stability can significantly impact business operations. Economic Factors: Inflation rates, employment levels, and economic growth influence consumer purchasing power and business costs. Social Factors: Demographic changes, cultural trends, and shifting consumer preferences affect market demand. Technological Factors: Innovations, automation, and advancements in technology can create new opportunities and disrupt existing markets. Legal Factors: Compliance with laws and regulations is essential to avoid litigation and fines. Environmental Factors: Sustainability and environmental concerns are increasingly influencing business practices and consumer choices.