Read the passage and answer the following questions.

Dynamic Horizons Ltd., a global brand, is known for its innovative approach to manufacturing and selling smartwatches. Recently, the company decided to launch its operations in two new markets- a developing country and a European nation. In the developing country, the company faced challenges such as unstable policies, a lack of proper infrastructure, limited purchasing power among the local population and an unfavorable attitude from the government. However, they noticed that the younger population was showing a growing interest in smartwatches, providing a potential market segment to target. But, the European nation presented an entirely different scenario with stringent laws and an established consumer base with high purchasing power and intense competition from local brands with similar watches. The smartwatch, which was desirable for populations in developing countries, was just another watch in European countries. Dynamic Horizons understood that they should adapt their products to the preferences of Europeans to gain a foothold here. So, the company in both the markets, leveraged advanced technological solutions including Al (Artificial Intelligence) technology and a tracking application in the smartwatch to enhance the customer experience. However, they faced challenges due to fluctuations in inflation rates which impacted raw material costs and transportation expenses. It is also imperative for the management of the enterprise to obey the law of the land.

The advancement of smartwatches using artificial intelligence is a part of which dimension of the business environment?

Technological environment

The correct answer is option 2- Technological environment.

The use of artificial intelligence in smartwatches represents technological innovation and advancement, which is a key aspect of the technological environment as this dimension includes the development and adoption of new technologies that impact how products are made, marketed, and used.

Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business. For example, recent technological, advances in computers and electronics have modified the ways in which companies advertise their products. It is common now to see computerised information kiosks, and World Wide Web multimedia pages highlighting the virtues of products. Similarly, retailers have direct links with suppliers who replenish stocks when needed. Manufacturers have flexible manufacturing systems. Airline companies have Internet and World Wide Web pages where customers can look for flight times, destinations and fares and book their tickets online. In addition, continuing innovations in different scientific and engineering fields such as lasers, robotics, biotechnology, food preservatives, medicine, telecommunication and synthetic fuels have provided numerous opportunities and threats for many different enterprises. Shifts in demand from vaccum tubes to transistors, from steam locomotives to dieseland electric engines, from fountain pens to ballpoint, from propeller airplanes to jets, and from typewriters to computer based word processors, have all been responsible and creating new business.