Importance of business environment

Question

What are the importance of business environment?

Answer 1

1. Identification of opportunities to get first mover advantage: Understanding of business environment help an organisation in identifying advantageous opportunities and getting their benefits prior to competitors.

2. Identification of threats: Correct knowledge of business environment helps an establishment to recognise those intimidations which may unfavourably affect its procedures.

3. Tapping useful resources: Business environment made available various resources like raw material, labour, capital, technologies etc. to a business firm. In order to know the availability of resources and making them available on time knowledge of business environment is necessary.

4. Coping with Rapid changes: Continuous study/scanning of business environment help in knowing the changes which are taking place and thus they can be faced effectively.

5. Assistance in planning and policy formulation: Understanding and analysis of business environment help an organisation in planning & policy formulation.

6. Helps in Improving Performance: Correct and continuous monitoring of business environment help an organisation in improving its performance.