Which term in external environment analysis is defined as developing projections on how the environment may change?

• A. Forecasting
• B. Scanning
• C. Assessing
• D. Monitoring

Answer: (A)

Forecasting is the practice of developing projections about how the external environment may change. It uses trends, signals, and data gathered from scanning and monitoring to forecast future conditions that could affect the organization. By estimating likely future states—such as shifts in demand, technology, regulations, or competitive dynamics—forecasting helps management anticipate opportunities and threats and shape strategic choices. Scanning is about gathering information on external factors, monitoring tracks events over time, and assessing interprets the potential impact; forecasting ties these inputs together to imagine plausible future scenarios and guide planning.