Question

Why is environmental scanning an important element of the marketing plan and what are its five forces?

Answer 1

Solution:-Environmental scanning is one type of date gathering process.The environmental scanning process consists of the data-gathering phase, the environmental interpretation/analysis phase, and the strategy formulation phase. The three processes are interlinked, but, over time, more attention is focused on each one more than the others so that at the end of the process, greater effort is expended on using knowledge gleaned from the external and competitive environments to formulate strategy based on changes occurring and identi?ed in the company's environment.The most common technique used to analyse the performance environment is Porter's Five Forces
Model of Competitive Analysis. Porter concludes that the more intense the rivalry between industry players, the lower will be their overall performance. On the other hand, the lower the rivalry, the greater will be the performance of the industry players. Porter's Five Forces comprise (1) supplier bargaining power, (2) buyer bargaining power, (3) threat of new entrants, (4) rivalry of competitors, and (5) threat of substitutes.