Question

‘Renew Ltd.’ was the pioneer in the Electric Vehicles segment and presently has 70% market share. Keeping in mind the rapidly increasing demand for Electric Vehicles due to the rising environment consciousness among people and lower operating costs, the company set a target to increase its market share to 80% in the current year. However, the incentives provided by the government to encourage manufacturing of Electric Vehicles attracted many new players in the market. As this change in the business environment happened suddenly, the company was not able to accurately assess future trends. As a result, the market share of ‘Renew Ltd.’ fell from 70% to 55% in the current year.

Which limitation of planning has been discussed in the above case?

विकल्प

• Planning may not work in a dynamic environment

• Planning leads to rigidity

• Planning does not guarantee success

• Planning involves huge costs

Answer 1

Planning may not work in a dynamic environment

Explanation:

• The case describes a sudden change in the business environment (government incentives and many new entrants) that the firm could not accurately forecast, causing its plan to fail, exactly the limitation that planning can break down in a dynamic, rapidly changing environment. 
• While “planning does not guarantee success” is also true, the vignette specifically highlights unpredictability and rapid environmental change.