What is suggested as an example of an early warning signal?

Entry of a foreign multinational with new substitutes

An Indian firm identifies the entry of a foreign multinational into the market with new substitutes, it should act as a warning signal. This implies that the presence of a new competitor with alternative products can be an early indication of a potential threat to the firm. In response to this warning signal, Indian firms can prepare themselves by adopting measures such as improving the quality of the product, reducing the cost of production, engaging in aggressive advertising, and so on. Essentially, the entry of a foreign competitor with innovative substitutes serves as an early warning sign for the firm to take proactive measures to address and mitigate the potential threat.