"Environmental scanning is the acquisition and use of information about events, trends, and relationships in an organization's external environment, the knowledge of which would assist management in planning the organization's future course of action." (Choo, 2001) Environmental scanning can be formal or informal and ranges in practice from customer surveys to market research programs.
After strategic managers have "scanned the societal and task environments and identified a number of likely external factors for their particular corporation" they may refine their analysis of these factors by developing an External Factors Analysis Summary (EFAS) table. (Wheelen & Hunger, 2006) The EFAS table organizes the external factors into two categories ? opportunities and threats ? and analyzes how well the company's management (rating) is responding to these specific factors in consideration of the perceived importance (weight) of the factors to the company.
In reviewing the case study of the Vermont Teddy Bear Co., Inc., I developed the following External Factor Analysis Summary:
External Factors Wgt Rating Wtd Score Comments
1 2 3 4 5
Opportunities
Upswing in public interest in teddy bears/collectibles .10 4.0 .40 Good potential here ? low cost to advertise at trade shows and in specialty magazines
Wholesale sales to unaffiliated retailers .05 ...