BUSINESS ENVIRONMENT CASE STUDIES 1 A good understanding of environment by business managers enables them not only to identify and evaluate but also to react to the forces external to their firm In the light of the above statement explain any four points of importance of understanding business environment by a manager ii Answer Importance of understanding business environment i It enables the firm to identify opportunities and getting the first mover advantage It helps the firm to identify threats and early warning signals It helps in tapping useful resources It helps in coping with rapid changes 2 Under which environment does change in taste fashion iii iv and trend fall in Answer Social environment 3 The people of some regions translated the slogan of Come Alive used by Pepsi company as Come out of the grave As a result company lost its market share rather than picking up This is the effect of which environment and how does this dimension of environment affect the business Answer This is the effect of social environment As people misunderstood the meaning of slogan and hurt their sentiments so they decided to stop the use of this product which is playing with their sentiments The social environment has great influence over the demand of customers because social environment constitutes taste preference tradition and expectations of customers the customer is the king pin in present day market and you can win over your competitor only by winning large segment of customers Although changes in the social environment may affect the business slowly or quickly but the cost of ignoring the customs traditions tastes and preferences of the people could be very high 4 How would you argue that the success of a business enterprise is significantly influenced by its environment Answer It is correct to say that the success of business enterprises is greatly influenced by the force and factors prevailing in environment by analysing and scanning the business environment Businessmen get the following benefits i ii Helps in tapping business resources iii iv Warning signal v Assisting in planning and policy formation vi Helps to adopt rapid changes Improvement in performance First mover advantage 5 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 e learning for Senior Secondary School students in Commerce stream which already has an 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 Answer 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 formulisation It enables the firm to identify opportunities and getting 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