If an Indian firm finds that a foreign multinational is entering the Indian market with new substitutes, it can prepare itself to meet the threat by adopting which of the following measures:

(A) Improving the quality of the products

(B) Reducing cost of production

(C) Engaging in aggressive advertising and making false claims

(D) Upgrading technology

Choose the correct answer from the options given below:

(A), (B) and (D) only

The correct answer is option 1- (A), (B) and (D) only.

(A) Improving the quality of the products – This is a valid and ethical competitive strategy to retain customers and counter foreign entrants.

(B) Reducing cost of production – Helps offer competitive prices and maintain profitability.

(C) Engaging in aggressive advertising and making false claims –  While aggressive advertising is acceptable, making false claims is unethical and illegal under consumer protection laws.

(D) Upgrading technology –  Enhances efficiency, product innovation, and competitiveness.

So, A, B & D is the correct answer.

Threats refer to the external environment trends and changes that will hinder a firm’s performance. Besides oppor tunities, environment happens to be the source of many threats. Environmental awareness can help managers to identify various threats on time and serve as an early warning signal. For example, if an Indian firm finds that a foreign multinational is entering the Indian market with new substitutes, it should act as a warning signal. On the basis of this information, the Indian firms can prepare themselves to meet the threat by adopting such measures as improving the quality of the product, reducing cost of the production, engaging in aggressive advertising, and so on.