A systematic assessment of internal and external factors that affect an organization is conducted to understand the current environment and anticipate future changes. This process involves gathering information about economic, technological, political, social, and competitive forces. An example is a company researching emerging technologies to determine if they pose a threat or opportunity to its existing product line.
Understanding the environment in which an organization operates provides strategic foresight, which is critical for effective planning and decision-making. It enables proactive adaptation to evolving market dynamics, mitigates potential risks, and identifies emerging opportunities. Historically, this analysis has been crucial for businesses seeking to maintain a competitive advantage and achieve long-term sustainability.
