Question

Manorama opened a retail outlet in Bengaluru selling readymade fashionable garments like t-shirts, skirts, kurtis, etc. for girls. Her decision was based on recent trends in clothing of young girls. Since fashion changes very fast in the garments business, Manorama not only wanted to understand the business environment but also wanted to adapt it to succeed in the long run. So, she monitored fashion trends through social media and introduced sustainable clothing. A keen watch on the trends in the environment had sensitized Manorama to the changing needs of customers. By doing this, Manorama is concentrating on one of the points of importance of environment.

1. Identify the point of importance of environment discussed above.
2. Explain with the help of one more point how sensitivity to environmental factors is crucial for an entrepreneur.

Answer 1

1. Coping with rapid changes: Manorama operates in the fashion clothing industry, where trends change extremely quickly. By watching social media and introducing sustainable apparel, she actively tracks and adjusts to these volatile market movements rather than falling behind.
2. Sensitivity to environmental factors is crucial for an entrepreneur because:
   • It enables the firm to identify opportunities and get the first mover advantage: Early awareness of shifting client preferences or technology improvements enables an entrepreneur to offer new products before competitors. This allows them to gain a large part of the market and build strong brand loyalty ahead of competitors.
   • It helps in assisting in planning and policy formulation: A deep understanding of environmental conditions gives the underlying information required to determine the next course of action. This guarantees that an entrepreneur develops goals, budgets, and corporate practices that are consistent with future market realities rather than relying on guesswork.