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The purpose of this paper is to examine the use of environmental scanning (ES) in the new product development (NPD) process among small and medium enterprises (SMEs) in the Thai food processing industry. This study also shows that more extensive use of ES improves new product (NP) performance, and that perception of higher technology turbulence increases usage of ES.

Data from a survey of 124 Thai SMEs through statistical package for the social sciences software shows that more extensive acquisition of ES information does improve NP performance.

Managers who perceive more technological turbulence do use ES more extensively. The technology strategy of the company does not have much impact on the use of ES. The results indicate that even SMEs can benefit from ES, a practice more commonly carried out by larger companies. Some SMEs seem to recognize that more turbulent environments require more extensive scanning.

These results may not hold exactly this way in other industries where technology plays a much greater role. Also, the impact of technology strategy on ES usage would be much more apparent in more technology intensive industries. It is clear that industry context variables should be included in future research to more fully understand the role of ES and NPD outcomes, as well as the factors that encourage companies to use ES more extensively. In addition, the ES impact on NPD outcomes should be examined in conjunction with some of the other determinants of quality NPD process.

The major contributions of the study consist of how comprehensive use of ES makes a significant contribution to NP performance, the findings on the impact of technology strategy, technology turbulence upon ES and the impact of ES upon NPD.

A study of ABB, Shell and CP Group of companies in Thailand found that the scope and management of environmental scanning activities within organizations evolve continuously as a result of volatility of the environment and the diverse nature of businesses. In the case of ABB and Shell the respective regional head office along with global head quarter participate actively in the process of environmental scanning in order to make strategic choices and grant approvals for operating budgets and new investments. The regional head quarter, in the case of ABB and Shell, plays the intervening role as information and capital resource provider whereas the country offices collect specific information at the industry and market levels and use it for implementing specific programs. In the case the of CP Group, the president and several vice presidents at the head office in Thailand play the bulk of the role in environmental scanning. All companies use business performance indicators to review the scope and the management of their environmental scanning practices.

Some small and medium‐sized enterprises (SMEs) in the Thai food industry put a lot of effort into keeping up with changes of consumption patterns locally and in the South East Asia region. To see how successfully they are able to create competitive advantage, aims to examine the impact of environmental scanning practices on new product development (NPD) outcomes among SMEs in the Thai food industry. The technology strategy of the company influences how much it uses environmental scanning, and technology turbulence can play a role in exactly how critical is good knowledge of the external environment.

Qualitative research was conducted using semi‐structured in‐depth interviews with food experts and SME owners.

Results suggest that SMEs that practice environmental scanning are better able to develop appropriate new food products. Technology strategy plays a role in how much scanning they use, with a more proactive technology strategy requiring more extensive scanning. Environmental turbulence, including changes in technology, can cause failure in NPD if scanning does not keep companies aware of the situation.

A simple conceptual model is proposed to show how technology strategy, technological turbulence, and environmental scanning affect NPD performance.

The research on medium‐sized finance companies in Thailand shows that companies with well‐organized and managed environmental scanning practices are recovering from the impact of the 1997 financial crisis and are able to respond to the hypercompetitive market context. The industry leaders and followers show two distinct approaches in responding to business environment. The industry leaders focus on short‐ and long‐term horizons, look at a broader set of factors, are able to influence and better foresee changes in the environment and respond towards these movements more pragmatically. The industry followers are slow in capturing changes in the business environment, do not influence industry regulations and can only comply once the policies are handed out by the regulators. The leaders have managed to overcome the debt burden and are looking forward. The followers have to devote attention to cleaning up the past.