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CMA Intermediate · Operations Management and Strategic Management · Strategic Analysis and Strategic Planning

Which statement best describes the main purpose of environmental scanning in strategic analysis?

Environmental scanning aims to identify external opportunities and threats so the organisation can adapt its strategy to change. It is an outward-looking exercise, unlike overhead allocation, internal efficiency measurement or break-even calculation, which are internal or cost matters.

  1. AIdentifying external opportunities and threats so strategy can respond to changeCorrect
  2. BAllocating overhead costs among departments of the firm
  3. CMeasuring the internal efficiency of production processes
  4. DCalculating the break-even sales volume of the firm

Explanation

Environmental scanning monitors external conditions to detect opportunities and threats early. Overhead allocation and break-even work are cost accounting tasks, and measuring internal efficiency belongs to internal analysis such as value chain or resource review.

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