Procedure of the environmental analysis:
Step 1: assess the nature of the environment: it is useful to take a view of the nature of the organization's environment in terms of how uncertain it is. Is it relatively static or does it show signs of the change, and in what ways, and is it simple or complex to comprehend? This helps in deciding what focus of the rest of the analysis is to take.
Step 2: audit, environmental influences: the aim is to identify which of the many different environmental influences have been affected the organization's development or performance in the past it may also be helpful to construct pictures or scenario of possible futures to consider the extent to which strategies might need to change.
Step 3: identify key competitive forces through structural analysis: it aims to identify the key forces at work in the immediate or competitive environment and why they are significant.
Step 4: identify strategic position: it means to analyze the organization's strategic position, how it stands in relation to those other organization's competing for the same resources or customers, as itself. This may be done in number of ways:
1. Competitor analysis
2. Strategic group analysis, in terms of the simplifications and dissimilarities of the strategic they follow:
3. The analysis of the market segments and the market power
4. Building on growth or share analysis
5. Attractiveness analysis
Step 5: identify key opportunities and threats: develop and understanding of the opportunities which can be built upon the threats which have to be overcome or circumvented. An understanding which needs to be considered in terms of the resource in terms of the resource base of the organization and which will contribute to strategy choice is very important.