Scanning Of Environment

Important Note :The latest notes is available at class 12 Entrepreneurship

I. Answer the following questions in a sentence each :

1. From what do entrepreneurs spot opportunities.

Entrepreneurs spot opportunities from various ideas generated by analyzing the various sources of information.

2. What are the two ways in which entrepreneurs receive opportunities?

The two ways in which entrepreneurs receive opportunities are by scanning the environment and

  1. generating innovative ideas to the needs and
  2. inventing solutions to problems.

3. What is the crucial requirement for a successful venture?

The crucial requirements for a successful venture are

  1. Sensing of existing opportunities.
  2. Innovate new ideas and there by creating opportunities

and more essentially interacting with the environment.

4. What is the interface between ‘spotting’ and ‘product-identification’?

The interface between ‘spotting’ and ‘product-identification’ is the evaluation of various crucial environment parameters.

5. What does the word ‘scan’ mean?

Literally, scan means to examine closely. It is especially used in the context of searching for something.

II. Answer the following in 50-60 words each.

1. What are the three steps involved in the process of sensing entrepreneurial opportunities.

The three steps involved in the process of sensing entrepreneurial opportunities are

  1. Scanning of the environment: To be of economic value, the entrepreneurial oppportunity identified should be compatible with the following environmental factors:
    1. Cultural
    2. Developmental
    3. Economic
    4. Financial
    5. Government and non-governmental institutional support
    6. Legal
    7. Political
    8. Social
    9. and other developmental factors

    This requires a thorough scanning of the environment to understand these factors.

  2. Generation of ideas: The scanning of the environment help in collecting different ideas. This leads to an innovative product or service. This entire process is called ‘Generation of ideas’.
  3. Identification of product or service: After generating the idea for an innovative product or service, the entrepreneur should evaluate the product or service. If the product or service exists in the current market, there should identify strong reason to introduce the product into the market. If the product or service is entirely new, they should take necessary steps to introduce it into the market.

2. What do you understand by ‘Scanning of Environment’?

‘Scanning of environment’ is the first step in the sensing of entrepreneurial opportunity. It is required to ensure that the identified entrepreneurial opportunity is compatible with various environmental factors as described below.

  1. Developmental and institutional factors: The encouragement and guidance of various governmental and non-governmental institutions plays a vital role in the setting up of an enterprise.
  2. Economic Factors: The vital economic factors like demand and supply will determine the size of the enterprize. The health of the economy will also determine the various means of financing the business.
  3. Financial Factors: The fnnds required for starting up an enterprise requires a close examination of the available financial institutions and other sources of funding.
  4. Social and cultural factors: Evaluating the social and cultural factors is essential before implementing a business concept. This will ensure that the product or service is compatible with the needs of the population living in a specific region.
  5. Legal factors: Starting an enterprise involves fulfilment of various legal requirements. Thus the environment has to closely scanned for legal factors.
  6. Political Factors: Various govermental policies prevailing in the society will affect the setting up of the enterprise. Thus a thorough scanning of the political factors is required.

3. Why is environment an important factor for entrepreneurship?

Environment plays a crucial role in setting up of an enterprise because of the influence of various environmental factors as described below.

  1. Developmental and institutional factors: The encouragement and guidance of various governmental and non-governmental institutions plays a vital role in the setting up of an enterprise.
  2. Economic Factors: The vital economic factors like demand and supply will determine the size of the enterprize. The health of the economy will also determine the various means of financing the business.
  3. Financial Factors: The fnnds required for starting up an enterprise depends on the availability financial institutions and other sources of funding and the policies followed by them.
  4. Social and cultural factors: Evaluating the social and cultural factors plays a vital role and requires that the enterprise is compatible with the needs of the population living in a specific region.
  5. Legal factors: Starting an enterprise involves fulfilment of various legal requirements. Thus these factors have a crucial role in setting up of an enterprise.
  6. Political Factors: Various govermental policies prevailing in the society will affect the setting up of the enterprise. Thus political factors needs consideration for setting up of an enterprise.

III. Answer the following in about 200 words each.

1. ‘Sensitivity to environmental factors is crucial for an entrepreneur’. Discuss with suitable examples.

Sensitivity to environmental factors is crucial for an entrepreneur because of the following reasons.

  1. A major portion of the opportunities are from the environment. A close examination of the surroundings may help a person about the lack of facilities that the people are suffering from. For instance, a person might notice that there is scarcity of cooking gas supply and the power supply and starts a business to sell solar operated cooking equipment and heating equipment thus capitalizing the opportunity. Capitalizing opportunities like this will not be possible if the entrepreneurs are not sensitive to the surrounding environment.
    A similar example will be that of an entrepreneur who senses that the demand for a seasonal events like those of marriages, national or religious celebrations can be capitalized.
  2. The nature of the enterprise is solely dependent on the environment. A person can not start a business to sell modern wear like Jeans and T-Shirts in a village environment where in the demand for traditional wear is more and vice versa. Similarly a person can not start non-vegetarian food supply in the geographical regions where in the majority of the population is vegetarian. Such mistakes won’t happen if the entrepreneur has a greater sensitivity to the conditions prevailing in the surrounding environment.
  3. The success of the enterprise depends on its ability to meet the consumer needs.
    Usually in winter there is demand for heating equipment or woolen clothes. Cotton clothes have less demand. It is the opposite in summer. An entrepreneur should have greater sensitivity to such facts and should be able to meet the demand from the consumers.

2. Why is scanning of environment considered as an interface between spotting and product identification? Support your answer with at-least one example.
I’m still in the process of preparing an answer for this


Other useful resources for your reference

Books & Other Material

  1. Entrepreneurial Opportunities
  2. Entrepreneurial Planning
  3. Enterprise Marketing
  4. Enterprise Growth Strategies
  5. ‎Business Arithmetic
  6. ‎Resource Mobilization
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2 Comments (+add yours?)

  1. Sapna Yadav
    Apr 29, 2016 @ 12:45:44

    easy to understand

    Reply

  2. Sachin Udhani
    May 19, 2014 @ 23:44:47

    It is so much good that it explains note in easy form

    Reply

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