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Answers of MB0053 Q1. “Environment scanning is an important part of international business.” Explain your views on this statement and discuss what factors need to be scanned.

AnswerThe environmental scanning process entails obtaining both factual and subjective information on the business environments in which a company is operating or considering entering Environmental scanning is the internal communication of external information about issues that may potentially influence an organization's decision making process. Environmental scanning focuses on the identification of emerging issues, situations, and potential pitfalls that may affect an organization's future. The information gathered, including the events, trends, and relationships that are external to an organization, is provided to key
managers within the organization and is used to guide management in future plans. It is also used to evaluate an organization's strengths and weaknesses in response to external threats and opportunities. In essence, environmental scanning is a method for identifying, collecting, and translating information about external influences into useful plans and decisions.

There are many important reasons to do environmental scanning. Because of rapid changes in today's marketplace and new and emerging business practices, it is easy for an organization to fall behind by not keeping up in areas such as technology, regulations, and various rising trends. Environmental scanning reduces the chance of being blindsided and results in greater anticipatory management.


The focus of environmental scanning is on strategic thinking and planning. Its value comes from the identification and understanding of complex issues facing the organization. Environmental scanning helps an organization form a strategic position from which it can address external forces over which it has little, if any, control. Through consistent monitoring of external influences, organizations can shape their own internal processes to reflect necessary and effective responses.
Factors need to be scanned before to go international:
Technological factors
State funding for research and innovation, trends development in country research.
Competition factors
Type, structure, operations, strategy plans, programme, acquisitions, mergers.
Trading partner and their role in target market
Trade openness, trade propensity, regional intensity and orientation, trade intensity product and market diversification.

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