Maruti Udyog became the leader in the small car market because it was the first to recognise the need for small cars in an environment of rising petroleum prices and large middle class population in India.
Identify the importance of Business environment in the given case study.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Identify opportunities and getting first mover advantage
Option (1) Tapping useful resources — Incorrect. This means getting inputs like finance, machines and raw materials from the environment. The case is about seeing a market need, not about getting resources.
Option (2) Coping with rapid changes — Incorrect. This means adjusting to fast changes in the market. Maruti did not just adjust; it acted first on a new need.
Option (3) Identify opportunities and getting first mover advantage — Correct. Maruti saw the need for small cars before anyone else. This is the very example: Maruti Udyog became the leader in the small car market because it was the first to recognise the need for small cars. Early identification of opportunities helps a firm be the first to use them, before competitors do.
Option (4) Assisting in planning and policy formulation — Incorrect. This means using knowledge of the environment to make plans and policies. The case stresses being first in the market, not planning.
NCERT (2026-27 Edition): “It enables the firm to identify opportunities and getting the first mover advantage: Opportunities refer to the positive external trends or changes that will help a firm to improve its performance. Environment provides numerous opportunities for business success. Early identification of opportunities helps an enterprise to be the first to exploit them instead of losing them to competitors. For example, Maruti Udyog became the leader in the small car market because it was the first to recognise the need for small cars in an environment of rising petroleum prices and a large middle class population in India.” |