How do you scan your external environment for opportunities and threats?

1 Identify your scope

The first step is to define the scope of your environmental scan, which means determining the level, industry, and market of your analysis. For example, you can scan the macro environment, which includes the political, economic, social, technological, environmental, and legal factors that affect all businesses. Or you can scan the micro environment, which includes the customers, competitors, suppliers, and stakeholders that are specific to your industry or market. You can also scan both levels, depending on your purpose and resources.

2 Choose your tools

The second step is to select the tools or frameworks that can help you collect and organize the relevant information for your environmental scan. There are many tools available, such as SWOT analysis, PESTEL analysis, Porter's five forces analysis, and STEEPLE analysis. Each tool has its own advantages and limitations, so you need to choose the one that suits your scope, objectives, and data sources. For example, SWOT analysis can help you identify your internal strengths and weaknesses, as well as the external opportunities and threats. PESTEL analysis can help you examine the macro environmental factors in more detail.

3 Gather your data

The third step is to gather the data that can inform your environmental scan, using various methods and sources. You can use primary data, which is the data that you collect yourself through surveys, interviews, observations, or experiments. Or you can use secondary data, which is the data that is already available from other sources, such as reports, publications, websites, or databases. You can also use both types of data, depending on your scope, tools, and resources. You need to ensure that the data you collect is reliable, valid, and relevant.

4 Analyze your data

The fourth step is to analyze the data that you have gathered, using the tools or frameworks that you have chosen. You need to interpret the data and identify the key trends, patterns, changes, and implications for your organization. You need to highlight the opportunities and threats that are most significant, urgent, and feasible for your organization. You also need to consider the strengths and weaknesses of your organization, and how they can affect your response to the opportunities and threats.

5 Communicate your findings

The fifth step is to communicate your findings to the relevant stakeholders, such as your managers, employees, partners, or investors. You need to present your findings in a clear, concise, and compelling way, using appropriate formats, such as reports, presentations, charts, or diagrams. You need to explain the purpose, scope, methods, and results of your environmental scan, and how they relate to your organization's vision, mission, and goals. You also need to provide recommendations or action plans for how your organization can capitalize on the opportunities and mitigate the threats.

6 Review your process

The sixth and final step is to review your environmental scanning process, and evaluate its effectiveness and efficiency. You need to assess the quality, accuracy, and timeliness of your data, tools, and findings, and identify any gaps, errors, or biases. You also need to monitor the external environment for any changes or new developments, and update your environmental scan accordingly. You need to seek feedback from your stakeholders, and learn from your successes and failures. You need to continuously improve your environmental scanning process, and make it a regular and strategic part of your business administration.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?