Question

Rajat was carrying on a business of manufacturing plastic disposables like plastic plates, plastic cups and plastic straws. He heard about the upcoming ban on single use plastics. He was able to identify this external environmental trend which could hinder his firm’s performance. So he took action and shifted to manufacturing the plates, cups and straws from bamboo and palm leaves. As a result, his business not only survived but was able to generate profit. 
The point of importance of Business Environment highlighted above is ______.

Options

• 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 assisting in planning and policy formulation.

Answer 1

Rajat was carrying on a business of manufacturing plastic disposables like plastic plates, plastic cups and plastic straws. He heard about the upcoming ban on single use plastics. He was able to identify this external environmental trend which could hinder his firm’s performance. So he took action and shifted to manufacturing the plates, cups and straws from bamboo and palm leaves. As a result, his business not only survived but was able to generate profit. 
The point of importance of Business Environment highlighted above is It helps the firm to identify threats and early warning signals.

Explanation:

The external environmental trends and changes that will harm a firm's performance are referred to as threats. Along with opportunities, the environment also presents a number of risks. Managers can use environmental awareness as an early warning system and to quickly identify various risks.