Describe and discuss the four activities of the external environmental analysis process

The external environmental analysis process includes four steps: scanning, monitoring, forecasting and assessing. The scanning of the environment includes the study of all segments of the general environment in order to detect changes that may occur in the future or already are occurring. When analysts monitor the environment, they observe environmental changes to see if an important trend is emerging from those spotted by scanning. Forecasting builds on scanning and monitoring to develop feasible projections of what might happen, and how quickly it will occur. Finally, through assessing, the analyst determines the timing and the significance of the effects of environmental changes and trends on the strategic management of the firm.