The increase in the demand for many Ayurvedic medicines, Health products and services in the past few months, is related to the need for building immunity and an increased awareness for health care due to the spread of Corona virus. Identify the feature of Business Environment being described above:
a. Specific and General forces
b. Interrelatedness
c. Relativity
d. None of the above
✔ Answer
b. Interrelatedness
The court issued the order that for vehicles to be smokeless was most essential and that any one violating this order shall have to pay a heavy fine. Identify the dimension of Business environment?
(a) Economic environment
(b) Political environment
(c) Legal environment
(d) Social environment
✔ Answer
(c) Legal environment
Entry of new players in the market led Mr. Vivek , the general manager of Clean Purifiers Ltd. to think afresh how to deal with the pandemic situation. Identify the significance of business environment in above case.
(A) It helps in coping with rapid changes
(B) It helps the firm to identify threats and early warning signals
(C) It helps in assisting in planning and policy formulation
(D) It helps in improving the performance
✔ Answer
(C) It helps in assisting in planning and policy formulation
Dino Industries is facing a lot of opposition as it pays salary to women workers as compared to men workers. Which dimension of environment is being violated by the company?
(a) Social Environment
(b) Technological Environment
(c) Legal Environment
(d) Political Environment
✔ Answer
(a) Social Environment
Two Big Banner movies were scheduled to be released on the same date, however at the last moment release of one movie had to be postponed due to opposition by a group of people because of some unethical content in the movie. The loss suffered by movie postponed, provided opportunity for the released movie to earn huge amount of revenue. Which feature of business environment is highlighted in the given case?
a. Dynamic factor
b. Complexity
c. Specific and general forces
d. Relativity
✔ Answer
c. Specific and general forces
Government of India banned several Chinese apps due to face off between China and India on the Line of Actual Control, it created fear in the mind of Chinese investors. Which of the following component of business environment is responsible for the decision?
(A) Legal Environment
(B) Social Environment
(C) Technological Environment
(D) Political Environment
✔ Answer
(D) Political Environment
Assertion: Business environment includes both specific and general forces. However, manager should be careful for both forces but give priority or more focus to specific force.
Reason: If workforce of Techvia Pvt. Ltd. is not satisfied due to unequal distribution of remuneration, it will affect smooth functioning of the entire industry and will not affect the functioning of Techvia Pvt. Ltd.
(a) Both Assertion and reason are true and reason is correct explanation of assertion.
(b) Assertion and reason both are true but reason is not the correct explanation of assertion.
(c) Assertion is true, reason is false.
(d) Assertion is false, reason is true.
✔ Answer
(c) Assertion is true, reason is false. · (Reason is incorrect because dissatisfaction affects the company directly, not just the industry)
“According to the Weights and Measures Act, every eatable product should explicitly bear a green dot for vegetarian contents and Red dot for non-vegetarian ingredient“ which key component of the business environment is discussed in the given case.
a. Social environment
b. Political environment
c. Legal environment
d. Economic environment
✔ Answer
c. Legal environment
Maruti was the first company to recognise the need for small cars in an environment of rising petrol prices and large middle-class population in India so they become the leader in the small car market. Which importance of business environment is highlighted here.
a. First mover advantage
b. Identify the early threat
c. Adjust with change
d. None of the above
✔ Answer
a. First mover advantage
Android mobile was the first unique application for mobile market. After few years this mobile is replaced by some other variants. Which nature of Business Environment is highlighted here.
(a) Dynamic
(b) Uncertain
(c) Complex
(d) Inter relatedness
✔ Answer
(a) Dynamic
Miss. Rosy after completing her studies from Canada comes to India to start a new business under the banner New Bloomer Ltd. She launches a new product in gleaming for Senior Secondary School students in Commerce stream, which already has an established market in Canada but not in India. Her business starts flourishing in India. Now more Indian companies entered into the market with other subjects also.
Identify and quote the lines from above paragraph 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.”
→ Assisting in planning and policy formulation
→ 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 subject also”
→ It helps the firm to identify threats and early warning signals.
SILKY Ltd. is a company which deals in hair products. It has its branches in all the parts of the world. However, the requirements of hair products are different in different parts of the world. This is due to the change in climate and lifestyles of people in the different countries. The market in which it is dealing is known for awareness of health. The more the awareness the more is the demand for such products. Company knows that the demand for these products is unpredictable as new products keep on coming and the industry keeps on changing frequently. There is a research and development department which keeps on updating the latest changes.
1. “This is due to the change in climate and lifestyles of people in the different countries.” Which feature of business environment is being highlighted here?
2. “Company knows that the demand for these products is unpredictable as new products keep on coming and the industry keeps on changing frequently.” Identify the feature of business environment being highlighted here?
3. “The requirements of hair products are different in different parts of the world. This is due to the change in climate and lifestyles of people in the different countries.” Identify the business environment dimension being highlighted here?
✔ Answer
1. A. Relativity
2. D. Uncertainty
3. A. Social Environment
The government of India announced Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016. As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date. New currency notes of the denomination of ₹ 500 and ₹ 2,000 were issued by Reserve Bank of India after the announcement. The step resulted in a substantial increase in the awareness about and use of Point-of-Sale machines, e-wallets, digital cash and other modes of cashless transactions. Also, increased transparency in monetary transactions and disclosure led to a rise in government revenue in the form of tax collection.
Enumerate the dimensions of business environment highlighted above.
✔ Answer
Political dimension: “The government of India announced Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016.”
Legal dimension: “As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date.”
Technological dimension: “The step resulted in a substantial increase in the awareness about and use of Point-of-Sale machines, e-wallets, digital cash and other modes of cashless transactions.”
The Government encouraged foreign companies to invest in some sectors of retailing. The argument is:
i. Customers can purchase the products of these companies as their income is rising.
ii. It will increase innovations which will provide new ways of producing goods.
This will ultimately improve the quality of life.
Identify and explain the Business Environment under four different dimensions quoting the lines from the above description.
✔ Answer
Political environment: “The Government encouraged foreign companies to invest in some sectors of retailing.” – includes government policies, stability, etc.
Economic environment: “Customers can purchase the products of these companies as their income is rising.” – nature of economy, income levels.
Technological environment: “It will increase innovations which will provide new ways of producing goods.” – new methods, discoveries.
Social environment: “This will ultimately improve the quality of Life.” – social values, lifestyles, standards of living.
CREA is an award winning, innovation led carry solutions Company. When the first lockdown was announced in March, 2020, to restrict the spread of the novel coronavirus, the company had its game plan ready. The firm, which designs and manufactures bags for a diverse clientele, spans across cosmetics, fashion, travel, health and fitness and apparel, quickly pivoted its business. The moment they saw that global lockdowns are in process, they understood that it is going to be a while before the business flourishes again. They immediately acted and started manufacturing PPE kits, masks, etc. during these tough times. They spent five months making PPE kits for the healthcare heroes. Many businesses changed track during the lockdown to meet the consumer demand. But the demand curve again undergoing a shift, post the various unlock phases, it might mean fight or flight for various MSME’s in the country.
1. Which forces have been covered by CREA in the above case?
2. Name the related feature of business environment which has influenced the business of CREA?
3. The above case highlights one of the points related to the importance of business environment and its understanding which led the managers to do well even in lockdown. Identify it.
4. Identify the related dimensions of business environment which led to the sudden spur in demand for masks and PPE kits?
✔ Answer
1. (C) Both Specific and General Forces
2. (B) Dynamic nature
3. (A) It helps in coping with rapid changes.
4. (A) Social dimension
Deepa and Saniya after finishing their BCOM degree decide to start their own travel agency which will book rail tickets and air tickets on commission basis. They also thought of providing tickets within 5 minutes through the use of internet. They discussed the idea with their teacher Arbind Kumar who liked the idea and suggested them to first analyze the business environment which consist of investors, competitors and other forces like social, political, etc., that may affect their business directly or indirectly. He further told them about the technological improvements and shifts in customer preferences that were taking place and hence, they should be aware of the environmental trends and changes which may hinder their business performance. He emphasized on making plans keeping in mind the threats posed by the competitors so that they can deal with the situation effectively. This alignment of business operations with the business environment will result in better performance.
1. Identify the components of business environment highlighted in the above paragraph.
2. Identify the features of business environment as discussed by Arbind Kumar with Deepa and Saniya.
3. Identify the points of importance of business environment as stated by Arbind Kumar in the above situation.
4. “Deepa and Saniya after finishing their BCOM decided to start their own travel agency which will book rail tickets and air tickets on commission basis” which dimension of business environment highlighted here.
✔ Answer
1. (C) technological environment
2. (C) dynamic nature
3. (B) It helps the firm to identify threats and early warning signals
4. (A) Economical
As per the directions issued by Supreme court, the government passed an order to ban the sale of tobacco products within the area of 200 meters of all educational institutions as:
(a) its consumption is injurious to health.
(b) People are becoming more conscious about health and fitness.
It is indicating the government's attitude towards this business.
Identify the 'Business Environment' under four different dimensions quoting the lines from the above paragraph.
✔ Answer
Legal Environment: “As per the directions issued by Supreme court, the government passed an order to ban the sale of tobacco products within the area of 200 meters of all educational institutions.”
Social Environment: “People are becoming more conscious about health and fitness.”
Political Environment: “It is indicating the government's attitude towards this business.”
Social Environment: “its consumption is injurious to health.”
Identify the various dimensions of business environment:
1. With the election of a new government the Sensex drops by 748 points.
2. A particular channel refrains from showing the advertisement of a particular product as it is banned by the government.
3. A software is in high demand among the industrial buyers as it can connect all the branches of a company as a single integrated unit.
4. At the time of Holi a large number of manufacturing firms get involved in making colours which are used in the celebration of this colourful festival.
5. It is not advisable to open a luxury car showroom in the middle of an economy where per capita income is very low.
✔ Answer
1. Political environment
2. Legal environment
3. Technological environment
4. Social environment
5. Economic environment
Naman and Govind after finishing their graduation under vocational stream decided to start their own travel agency which will book Rail Tickets and Air Tickets on commission basis. They also thought of providing tickets within ten minutes through the use of internet. They discussed the idea with their Professor Mr. Mehta who liked the idea and suggested them to first analyse the business environment which consists of investors, competitors and other forces like social, political, etc., that may affect their business directly or indirectly. He further told them about the technological improvements and shifts in consumer preferences that were taking place and hence they should be aware of the environmental trends and changes which may hinder their business performance. He emphasized on making plans keeping in mind the threat posed by the competitors, so that they can deal with the situation effectively. This alignment of business operations with the business environment will result in better performance.
(i) Identify and state the component of business environment highlighted in the above Paragraph.
(ii) State any two features of business environment as discussed by Professor Mehta with Naman and Govind.
(iii) Also state two points of importance of business environment as stated by Professor Mehta in the above situation.
✔ Answer
(i) Technological Environment – It includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
(ii) Two features:
- Business environment includes both specific and general forces.
- Business environment is Dynamic in nature.
(iii) Two points of importance:
- It helps the firm to identify threats and early warning signals.
- It helps in planning and policy formulation.
India's craft heritage is surviving because of its customs and traditions. Craft products made by craftsmen of Rajasthan, Gujarat, Assam, etc. are not only used in the country but are also exported to Canada, Australia, Germany and other countries of the world. The volume of exports of these gives India an advantage in balance of payments and the much-needed foreign exchange. The prime minister desires that the handicraft industry should be expanded by linking it with technology. Focus should be on changing the manufacturing process, ensuring durability and adopting innovations.
Quoting the lines from the above paragraph, explain dimension of business environment.
✔ Answer
Social Environment: “India's craft heritage is surviving because of its customs and traditions.”
Economic Environment: “The volume of exports of these gives India an advantage in balance of payments and the much-needed foreign exchange.”
Political Environment: “The prime minister desires that the handicraft industry should be expanded by linking it with technology.”
Technological Environment: “Focus should be on changing the manufacturing process, ensuring durability and adopting innovations.”