Entrepreneurship as Innovation and Problem Solving — Entrepreneurship STD 11 Commerce — Question

The various external factors which may give rise to such risks are as follows:

1. Economic factors: These arise due to prevalent economic condition and changes in the prevailing market conditions. These can be of the following types,

• Changes in demand,
• Price fluctuations
• Changes in tastes and preferences of the consumers;
• Changes in income, output or trade cycles,
• Increased competition for the product,
• Inflationary tendency in the economy;
• Rising unemployment,
• Fluctuations in world economy.

For example: Audio cassette player to CD player.

2. Natural factors: These are the unforeseen natural calamities like earthquake, flood, famine, cyclone, lightening, etc. These may cause loss and damage to life and property. Entrepreneurs have very little or no control. For example, the land slide in Uttarakhand damaged the business and have adversely affected the whole economy of the state.
3. Political factors: These are due to political changes in a country like:

• Fall or change in the Government,
• Communal violence,
• Civil war,
• Hostilities with the neighbouring countries;
• Changes in Government policies and regulations.

4. Change in taste and preference: Tastes change with the change of time and factors.

For example: Earlier home made food was preferred and fast food was considered as luxury. In the present scenario, there has been an increase for the liking towards fast food.