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Business Environment

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Business Studies I

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Business Studies

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CBSE Gujarat Board Haryana Board

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Class 10 Class 12

How is business environment helpful in the ‘improvement of performance’?


In every organisation the study of business environment has an important role as far as its performance is concerned. Those organisations which keep a constant eye on it and analyse it correctly definitely win the race and remain alive for a long time. On the other hand, those organisations which do not care about it cannot remain steadfast in the market, are likely to close down. Therefore, it can safely be asserted that an organisation can improve its present as well as future with the help of the study of business environment.

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How ‘first mover advantage’ is made available by the business environment? Give an example.


The study of business environment enables us to know about the opportunities available. A company which is more conscious about the changes taking place in the business environment is the first mover. It takes advantage of it by becoming the first supplier. In other words, a company which has the capacity to know the possibilities of the opportunities available can be the greatest beneficiary. For example, the ASIAN PAINTS a leading company of the paint industry, at one stage lagged behind because of technology. This was smartly understood by another company, GOODLASS NEROLAC (GN). In order to exploit this situation, the latter company entered with a contract with a foreign company named KANSAI PAINTS (KP) with the purpose of acquiring latest technology. The KP made available to the GN the Cathodic Electro Deposition (CED) technology. On this very basis, the GN was able to obtain the contract for the entire paint requirements of the MARUTI UDYOG. In this way, the GN earned huge profits by entering the market with the latest technology. It was a first mover advantage of the company.

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Business environment includes both 'specific and general forces'. List any four specific forces.


Customers, Suppliers, Competitors and Investors.

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‘Nothing can be said with any amount of certainty about the factors of the business environment.’ Why?


Because they continue to change quickly.

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Why is business environment known as ‘totality of external forces’?


As it is the group of many outside forces, that is why, its nature is of totality.

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