Program – MBA

Subject – ENTREPRENEURSHIP DEVELOPMENT

Subject Code: MMBA22011

Assessment Type – Internal Assessment

Case study per subject – 10 Marks

Questions
(i) Identify any two features of a business environment from the above case. Explain
it.

(ii) State the importance of understanding of environment by business managers in

the light of the above para.

Answers

(i) Two features of the business environment highlighted in the case are:

Rapidly changing consumer preferences and market trends:

The case indicates that the fashion and tastes of consumers are changing at a fast pace,
leading to a decline in demand for Karodimal Ltd.'s products. New competitors with
innovative designs have entered the market, indicating the dynamic nature of consumer
preferences and market trends.

Increased uncertainty and complexity in the external environment:

The company faces difficulty in predicting future market happenings due to the complexity
and uncertainty in the business environment. The relative impact of various external factors
such as social, economic, political, technological, and legal factors on the decline in demand
is challenging to ascertain.

Explanation:

Rapidly changing consumer preferences and market trends:

Consumer preferences and fashion trends are constantly evolving. What was in demand
yesterday might not be as popular today. Businesses need to continuously monitor and adapt
to these changes to stay competitive and meet consumer demands effectively. In this case,
Karodimal Ltd. faces declining demand due to changing consumer tastes, highlighting the
importance of staying updated with evolving market trends.

Increased uncertainty and complexity in the external environment:

The business environment is influenced by various external factors that are often
interconnected and constantly changing. Understanding the impact of social, economic,
political, technological, and legal factors on business operations is crucial. However, the
dynamic and unpredictable nature of these factors can create uncertainty, making it
challenging for businesses to anticipate future trends or their effects accurately.

(ii) Importance of understanding the environment by business managers:

Understanding the business environment is crucial for business managers for several reasons:

Strategic decision-making:
Knowledge of the external environment helps managers make informed strategic decisions.
By understanding market trends, consumer preferences, and potential threats and
opportunities, managers can formulate effective strategies to adapt to changes and capitalize
on emerging trends.

Risk management:
Awareness of external factors allows managers to identify potential risks and challenges that
may impact the business. This understanding enables them to develop contingency plans and
mitigation strategies to minimize risks and navigate uncertainties effectively.

Competitive advantage:
Keeping abreast of changes in the business environment provides a competitive edge.
Managers who are proactive in responding to market changes can position their company
ahead of competitors by introducing innovative products or services that align with customer
demands.

Adaptability and agility:

An understanding of the business environment allows managers to be flexible and agile in
responding to changing circumstances. They can quickly adjust business strategies, marketing
approaches, and operations to meet the evolving needs of customers and the market.

In the case of Karodimal Ltd., understanding the business environment is crucial for the
company's survival and success. It enables the management team to assess market dynamics,
identify shifts in consumer preferences, and devise strategies to address these changes
effectively.

Submitted by : Ladeeda Nasrin

Reg no: 225012301200