Business Studies 4 Marks Question

It is right to say that business environment is dynamic as every day new changes are taking place in that business environment. These changes are so fast and effective that the companies, which are able to scan them or recognise them on time, only survive in the market.Examples:(i) Rapidly changing technology has affected the business world. Large number of new products are being introduced in market such as refrigerator with bio fresh technology or door cooling technology, etc.(ii) The spread of literacy and public consciousness has contributed in rousing the aspirations of people and today companies give priority to customer's preference and demands.(iii) With new legislation and policies of deregulation of industries, there is increase in the foreign direct investment in capital market.

It is correct to say that the success of business enterprises is greatly influenced by the force and factors prevailing in environment by analysing and scanning the business environment. Businessmen get the following benefits:(i) First mover advantage.(ii) Warning signal(iii) Helps in tapping business resources.(iv) Assisting in planning and policy formation.(v) Improvement in performance.(vi) Helps to adopt rapid changes.

This is the effect of social environment. As people misunderstood the meaning of slogan and it hurt their sentiments so they decided to stop the use of this product which is playing with their sentiments.The social environment has great influence over the demand of customers because social environment constitutes taste, preference, tradition and expectations of customers, the customer is the king pin in present day market and you can win over your competitor only by winning large segment of customers. Although changes in the social environment may affect the business slowly or quickly but the cost of ignoring the customs, traditions, tastes and preferences of the people could be very high.