Question

Alfa Graphics Ltd. was a reputed Indian company which had been in business for many years. The Chief Executive Officer of the company, Rohit Gupta, always believed in understanding the business environment as well as responding and adapting to it. When he found that a foreign multinational company, Leno Graphics, is entering the Indian market with new substitutes, he prepared to meet this threat by reducing cost and creating good quality and aesthetically appealing layouts, advertisements, logos, etc. As a result, Alfa Graphics Ltd. was not only able to retain its own customers, but also started getting new projects. The point of importance of Business Environment discussed above is:

• A. Tapping useful resources.
• B. Identifying threats and early warning signals.
• C. Improving performance.
• D. Identifying opportunities and getting first mover advantage.

Answer 1

The Correct Option is B

In the scenario provided, Alfa Graphics Ltd. faced a situation where a foreign multinational company, Leno Graphics, was entering the Indian market with new substitutes. The action taken by Rohit Gupta, the CEO of Alfa Graphics, was to prepare for this new competitive threat by reducing costs and enhancing the quality of their products, hence retaining customers and even attracting new ones. This situation highlights the importance of understanding and adapting to threats in the business environment.

Among the provided options, the key point of business environment that is being discussed is:

• Identifying threats and early warning signals.

The rationale behind this conclusion is as follows:

• Identifying threats and early warning signals: This point emphasizes the ability of a business to recognize potential competitive threats in the environment, such as the entry of new competitors with substitute products, and then strategically responding to these threats to maintain competitive advantage and market position. In this case, Alfa Graphics Ltd. proactively responded to the entry of Leno Graphics by improving their offerings to combat the competition.
• Other options: The other options like "Tapping useful resources", "Improving performance", and "Identifying opportunities and getting first mover advantage" do not directly align with the scenario in the same way, as the primary focus was on countering a threat rather than seizing new opportunities or resources.