Here we are providing Class 12 Business Studies Important Extra Questions and Answers Chapter 3 Business Environment. Business Studies Class 12 Important Questions are the best resource for students which helps in class 12 board exams.
Class 12 Business Studies Chapter 3 Important Extra Questions Business Environment
Business Environment Important Extra Questions Short Answer Type
Give your views on ‘Economic Environment in India.
The economic environment in India consists of various macro-level factors related to the means of production and distribution of wealth which have an impact on business. These are
- Stage of economic development of the country.
- The economic structure in the form of a mixed economy.
- Economic policies of Government including industrial monetary and fiscal policy.
- Economic planning including five-year plans etc.
- Infrastructural factors such as financial institutions.
State briefly the influence of the technological environment on business and industries.
- The efficiency of business increases tremendously to face global competition.
- The firm is able to produce better quality products at a cheaper price.
- Continuous up-gradation as per the changing environment has become a necessity to remain competitive in the market.
- Small and medium enterprises find it difficult to invest in the new technologies due to limited funds available.
Do you agree with the statement that “Environment offers opportunities as well as threats”? Discuss.
Yes, the statement that the business environment offers opportunities, as well as threats, holds true. Threats to the domestic industry can be in the form of increased or cutthroat competition, no availability of a trained workforce.
Shortage of raw materials, a shift in consumer demand to other products, etc. For example, Chinese toy manufacturers have taken over the world toy market. Now they almost have taken monopoly in this sector.
The opportunities can be experienced in the form of easy accessibility to new technology, opening, up of new investment avenues increased orders, world quality products due to competition, etc. For example, there is increased demand for environment-friendly products.
Explain the Environment analysis and its Diagnosis with SWOT analysis.
Environment Analysis is the study of various factors of l environment affecting the business, like economic factors, political factors, technological factors, global factors, etc. Environment analysis helps to anticipate opportunities and to plan to take appropriate actions to avail these opportunities. By careful analysis of the environment, the business comes to know the opportunities provided and threats posed by the environment.
However, in general, the manager takes the help of SWOT analysis to analyze the environment. SWOT analysis has have been discussed below:
Swot analysis: Swot Analysis is an analysis of the strengths and weaknesses of the organization and the opportunities and threats in the: environment. SWOT-analysis helps in the formulation of business policy.
Two parts of SWOT analysis are
1. Strengths and Weaknesses: Strengths and weaknesses are related to internal factors such as finance, technology, production facilities, personnel capabilities, etc. of the business organization. The ability of a business organization to exploit the available environmental opportunities depends upon the strength of these internal factors. An organization should concentrate on such business for which it is most competent in case if it does not possess the necessary strength to exploit the opportunities.
2. Opportunities and Threats: Opportunities and threats are related to the external environment. Good opportunities are provided to the business by changes in the external environment. Similarly, the same is responsible for posing threats to the business. Lower rate of interest, development of new market new innovations, etc. are some forms of opportunities. Threats may in the form of increased competition decreasing demand, obsolete technology, etc.
Business Environment Important Extra Questions Long Answer Type
What is Environmental Scanning? Explain the SWOT technique of Environmental scanning.
Environmental Scanning: The first and foremost step in corporate planning is environmental scanning. Every organization functions within a specific environment and the various elements of the environment have a significant influence – on its functioning.
SWOT stands for
S – Strengths,
W – Weakness,
O – Opportunities, and
T – Threats.
Strength: Strength is an inherent capacity that an organization can use to gain a strategic advantage over its competitors. For example, superior research and development facilities enable a firm to develop new products and there by gain a competitive advantage:
Some of the examples of a company’s strength are:
Weakness: Weakness is an inherent limitation or constraint which creates a strategic disadvantage. For example, over-dependence on a single product is potentially very risky.
Some of the examples of the weakness of a company are:
Opportunity: Opportunity is a favorable condition in the environment. It enables an enterprise to consolidate its position. For exam growth of the demand is an opportunity for the company to grab.
Threat: Threat is an unfavorable condition in the environment. It creates a risk to the business. For example, growing competition is a threat to the business.
Thus we can see that SWOT Analysis helps an enterprise in matching its strengths and weakness with the opportunities and threats operating in the environment.
Explain in detail the External Environment and affecting factors.
External Environment: External Environment consists of all the forces, institutions, and events that are relevant to an organization’s operations but which are absolutely beyond the control of the enterprise. It includes all the outside factors that provide opportunities and pose threats to the organization. The main components of the external environment are:
- Micro Environment includes competitors, suppliers, consumers, the public at large, and marketing intermediaries.
- Macro Environment includes economic environment, socio-cultural environment, political environment, legal environment, and technological environment.
- Micro Environment Micro environment includes all those factors which are closely related to the business. These factors have a different effect on various types of enterprises. Every enterprise has its unique dealing with all these factors. The various factors included in the microenvironment are
1. Competitors Every business enterprise and its policies are affected by the competitors to a great extent. The policies of the competitors can affect the pricing of the product, quality, and quantity of the product, the advertising pattern and budget, etc.
2. Suppliers Business enterprise is very much affected by its relationship with its suppliers. It is in the hands of the suppliers to make the uninterrupted supply of raw materials at a reasonable price.
3. Consumers: The satisfaction of the consumers is one of the main aims of a business enterprise. Different types of consumers are of different importance to the enterprise. The business enterprise must be able to provide goods according to the tastes and preferences of different types of consumers.
4. Public at Large The attitude and behavior of different constituents of the public at large like the local public, trade unions, press, etc. affect the business enterprises.
5. Marketing Intermediaries The marketing intermediaries like agents, whole-sellers, retailers, etc. also affect the business enterprises to a great extent. They act as a link between the manufacturer and the ultimate consumer and can be an important factor in the business.