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:

• A. It enables the firm to identify opportunities and getting the first-mover advantage.
• B. It helps the firm to identify threats and early warning signals.
• C. It helps in tapping useful resources.
• D. It helps in assisting in planning and policy formulation.

Hint:

Analyzing the business environment helps firms identify both opportunities and threats, enabling timely and strategic decisions.

Answer 1

The Correct Option is B

The business environment helps firms recognize potential threats and take corrective action to mitigate risks. Rajat identified the ban on single-use plastics as a threat and took proactive measures to shift to eco-friendly alternatives like bamboo and palm leaves.