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Business Environment — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesBusiness Environment6 Marks
Question
In what ways do managers respond to various changes taking place in business environment?
OR
Explain the various ways in which companies responded to changes in the business environment.
✓

Answer

Companies responded due to changes in the business environment in the given mentioned ways:
  1. Acquisitions and mergers: Business organizations went through a lot of changes such as mergers, amalgamations, acquisitions, takeover bids etc. These were conducted with different purposes in mind such as:
  1. To achieve market dominance.
  2. To get entry in new markets.
  3. To increase their product range.
  4. To attain core competency.
  5. For access to technology.
  1. Diversification spree: The corporate scene witnessed a spate of diversification as well. For example, ITC which was initially only into tobacco products and hotels later entered in fast moving consumer goods, paperboards and packaging, agri business and information technology.
  2. Consolidation of multinationals: Many MNC's entered India through new joint ventures agreements. For example, US based pharmaceutical Merck joined hands with Sun Pharma. Similarly, Pfizer entered into marketing alliance with Biocon Ltd.
  3. Brand building: Companies increased their expenditures to build brands. For examples, dot. com companies such as bookmyshow.com, flipcart.com etc.
  4. Customer focus: There is a lot of emphasis on increasing customer satisfaction by placing more focus on quality, enhanced features, packaging, services etc.
  5. Use of advanced technology: Successful companies make use of latest technology to enhance quality of products and reduce costs.
  6. Increased compensation levels: Companies have enhanced the compensation levels for managerial and technical services. This is done to attract and retain the competent personnel who can help the organistion to attain new heights. Also, to motivate employess, performance related incentive schemes are becoming popular.

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