Environmental Scan
Environmental Scan of Home Depot
Crystal Graham
MGT498
March 18, 2013
Rob Inglis
Environmental Scan of Home Depot
Strategic planning is necessary for every successful company and needs to be managed accordingly. Environmental scanning is the first phase in strategic planning management. Environmental changes, whether external or internal can pose major problems for a company. A scan of environmental factors provides a better understanding of current trends and what causes things to change. An analysis of this information can ensure long-term stability and orientation for any business. This paper will explain the element of environmental scanning and describe the internal and external environment of Home Depot; summarizing the competitive advantages and current strategies they employ. The strategic management process has four different components: Environmental scanning, strategy formulation, strategy implementation, and evaluation and control. “Before an organization can begin strategy formulation, it must scan the external environment to identify possible opportunities and threats and its internal environment for strengths and weaknesses” (Wheelen & Hunger, 2010). A SWOT analysis is an effective tool for organizing these factors. The internal factor of environmental scanning consists of a company’s strengths and weaknesses. An easy way to analyze these factors is to create an Internal Factor Analysis Summary, (IFAS) table [see Exhibit 2] or VRIO framework (Value, Rareness, Imitability, and Organization). Where the internal environment deals with strengths and weaknesses, the external environment is about opportunities and threats. These factors can be analyzed using a STEEP Analysis or PESTLE Analysis [see Exhibit 3].
When scanning the external environment, many variables need to be considered; natural environment, societal environment, task environment, and industry analysis. The natural environment consists of wildlife, weather, and other
Crystal Graham
MGT498
March 18, 2013
Rob Inglis
Environmental Scan of Home Depot
Strategic planning is necessary for every successful company and needs to be managed accordingly. Environmental scanning is the first phase in strategic planning management. Environmental changes, whether external or internal can pose major problems for a company. A scan of environmental factors provides a better understanding of current trends and what causes things to change. An analysis of this information can ensure long-term stability and orientation for any business. This paper will explain the element of environmental scanning and describe the internal and external environment of Home Depot; summarizing the competitive advantages and current strategies they employ. The strategic management process has four different components: Environmental scanning, strategy formulation, strategy implementation, and evaluation and control. “Before an organization can begin strategy formulation, it must scan the external environment to identify possible opportunities and threats and its internal environment for strengths and weaknesses” (Wheelen & Hunger, 2010). A SWOT analysis is an effective tool for organizing these factors. The internal factor of environmental scanning consists of a company’s strengths and weaknesses. An easy way to analyze these factors is to create an Internal Factor Analysis Summary, (IFAS) table [see Exhibit 2] or VRIO framework (Value, Rareness, Imitability, and Organization). Where the internal environment deals with strengths and weaknesses, the external environment is about opportunities and threats. These factors can be analyzed using a STEEP Analysis or PESTLE Analysis [see Exhibit 3].
When scanning the external environment, many variables need to be considered; natural environment, societal environment, task environment, and industry analysis. The natural environment consists of wildlife, weather, and other
References: The Home Depot USA Inc. (2012). Our History. Retrieved from https://corporate.homedepot.com/OurCompany/History/Pages/default.aspx Wheelen, T. L., & Hunger, J. D. (2010). Concepts in Strategic Management and Business Policy: Achieving Sustainability (12th ed.). Upper Saddle River, NJ: PrenticeHall.