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Model Paper 1 — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesModel Paper 16 Marks
Question
'Konark Ltd/ is an electronics goods manufacturing enterprise situated in Shivpuri, Madhya Pradesh. It is earning a very low revenue in comparison to a competing electronic good manufacturing enterprise, 'Nova Ltd.' situated in Mumbai. Both Konark's and Nova's operations are affected directly by the investors, customers, competitors, and suppliers, which are unique to their respective locations. In addition to this, individual firms of this field are affected indirectly by factors like the money supply in the economy, the composition of the families, the technological changes, etc.
a. Identify and state the feature of the concept discussed in the above paragraph.
b. Also, state any four points of importance of this concept.
✓

Answer

a. The Concept discussed above is 'Business Environment'.The feature of the business environment discussed above is-
Specific and General forces: Business Environment is made up of both specific and general forces. Specific forces refer to the customers, competitors, investors, etc. which have a direct effect on the day to day working of the business while the general forces refer to social, political, legal, technological and other forces which indirectly affect the operations of a business.
b. The Four points of importance of Business Environment are:
(i) Enabling the identification of opportunities and getting the first-mover advantage: The business environment provides many opportunities for firms to improve their performance. The firms which are able to scan these opportunities at an early stage get maximum benefit and can leave their competitors behind.
(ii) Helping in the identification of threats and early warning signals or the Radar effect: Environment understanding helps an enterprise to recognize qualitative information in advance, which can be used to prepare it for facing likely challenges.
(iii) Improvement in performance: Environmental awareness provides continuing, broadbased education for management. Objective qualitative information generated by such understanding provides a strong basis for strategic thinking. The enterprises that monitor their environment closely can adopt suitable business practices not only to improve their performance but also to become leaders in the industry.
(iv) Image building: Environmental understanding generates a feeling among the public that business is sensitive and responsive to its environment. This helps in building the image or reputation of the firms.

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