Read the following passage and answer the question.
The governments all over the world are becoming more and more concerned about the environment. To protect it, many state governments passed an order to ban polythene bags since these are non-biodegradable. As a result, the government also decided to give a subsidy to the jute industry (bags). The minister said in a statement that they believed it would be helpful as the incomes of people are rising and people can afford jute bags. After this subsidy, Pooja saw great potential in the jute multi-pocket bags business, which was not yet established in India but had been flourishing in the USA, where she studied during her post-graduation. She launched the product in India and her business started to boom. So, more companies entered the market with other articles and improvisations in the country.
Pooja had seen the jute multi-pocket bags business flourish in the USA, and she launched it in India before it was established here. Which importance of understanding the business environment does this show?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Identifying opportunities and getting the first mover advantage
Option (1) Identifying opportunities and getting the first mover advantage — Correct. Opportunities are positive external trends that help a firm. Spotting one early lets a firm exploit it first. Pooja started in India a business that was not yet set up here.
Option (2) Identifying threats and early warning signals — Incorrect. Threats are external trends that hinder a firm’s performance. Pooja spotted a chance to grow.
Option (3) Coping with rapid changes — Incorrect. This is about adjusting to fast changes in tastes or technology. Pooja was first in a new market; she was not adjusting to a change.
Option (4) Assisting in planning and policy formulation — Incorrect. This is about deciding the future course of action. The case stresses being first in the market.
NCERT (2026-27 Edition): “(i) 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.” |