The microenvironment of the business is characterised by explosive industrial growth in some segments and at the same time, rapid technological development is rendering existing solutions to customer problems obsolete. On the macro-economic front, governments are increasingly facing the dilemma of choosing between economic progress and welfare - affecting government expenditure, and in turn the economic growth of the country. On the other hand, recessionary conditions in other countries have forced many companies out of business. Added to these, are the regulatory frameworks of the country and socio-cultural factors. The scenarios become even more complex when companies expand to new geographical regions. They have to deal with multiple � yet distinct � business environments. Organisations have no control over the changes happening in its external environment; but these factors cannot be ignored as they have a profound impact on the business operations and its profitability.
With the ongoing rapid change in business environment, the conventional bases of competitive strategy are continuously eroding. In such a scenario, any company that is not continually developing, acquiring, and adapting to new technological advances and to the changing business environment is preparing itself to be out of the business within a few years. So, an extensive study of the business environment has become an essential prerequisite for success.
The case studies featured in this book provide an in-depth and rigorous perspective on various business environment issues across the globe. Starting with a short theoretical framework, the book, Case Studies on Business Environment - Vol. I, provides insights into some of the companies that have been successful in managing their ever-changing and demanding business environments. This book would definitely be an essential reading for all those executives managing or desirous of managing different business environments.
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Case Studies - (Chapter- 3) Environment
Q. 1. Mr. Ajay after completing MBA from USA comes to India to start a new business under the banner Ecom Creations Ltd. He launches a new product in a e-learning for senior Secondary School students in Commerce stream, which already has n established market in UK and USA but not in India. His business starts flourishing in India. Now more Indian companies entered into the market with other subjects also.
Identify and quote the lines from above para which highlight the significance of understanding business environment. (4 marks)
- “Comes to India to start a new business … launches a new product in e-learning for Senior secondary school students in Commerce stream.”
- It helps in assisting in planning and policy formulation.
- It helps the firm to identify opportunities and get the first mover advantage.
- “His business starts flourishing in India.”
- It helps in improving performance.
- “Now more Indian companies entered into the market with different subjects also.”
- It helps the firm to identify threats and early warning signals.
Q. 2. Just after declaration of Lok Sabha Elections 2014 results, the Bombay stock exchange’s price index (Sensex) rose by 1000 points in a day. Identify the environmental factor which led to this rise giving reason. Also explain any two other dimensions of business environment. (5 marks)
Ans. Rise in stock market index (Sensex) is economic environment. But Political environment (declaration of Lok Sabha Elections 2014 results)) led to this rise.
Two other dimensions of business environment:
- Legal Environment:
- Technological environment:
Q. 3. The court passed an order that all schools must have water purifier for the school children as
- Society in general is more concerned about quality of life.
- Innovative techniques are being developed to manufacture water purifier at competitive rates.
- Incomes are rising and children at home are also drinking purified water.
The government is also showing positive attitude towards the water purifier business.
Identify the different dimensions of business environment by quoting from the above details. (5 marks)
- Legal environment:
- Social environment:
- Technological environment:
- Economic environment:
- Political environment:
Q. 4. ‘It is common now to see CD-ROM’s, computerized information kiosks, and Internet/Word Wide Web multimedia pages highlighting the virtues of products.’ Name the dimension of the business environment highlighted by this stateme. (1 mark)
Ans. Technological environmentShow more