Question

The Marketing Research Manager of ‘Trendy Textiles’ has been assigned the task of analysing the influence of Generation Z on fashion trends. On studying the forces that affect business, he observed that increased awareness amongst Generation Z with respect to environmental protection, preference of individuality over trends, rejection of traditional norms in clothing, and greater use of social media have increased the demand for sustainable and innovative styles in clothing, ‘Do It Yourself’ (DIY) products, and promotion of products on various social media platforms by companies.

1. In the context of the above case, identify and explain the feature of the business environment highlighted above.
2. Explain any two features of the business environment, apart from the one identified in part a.

Answer 1

1. The feature of the business environment highlighted is interrelatedness. Different elements or parts of the business environment are closely interrelated. For example, increased life expectancy of people and increased awareness for health care have increased the demand for many health products and services like soft drinks, fat-free cooking oil, and health resorts. New health products and services have, in turn, changed people’s lifestyles.
2. 1. Totality of external forces: The business environment is the sum total of all things external to business firms and, as such, is aggregative in nature.
   2. Specific and general forces: The business environment includes both specific and general forces. Specific forces (such as investors, customers, competitors, and suppliers) affect individual enterprises directly and immediately in their day-to-day operations. General forces (such as social, political, legal, and technological conditions) have an impact on all business enterprises and thus may affect an individual firm indirectly.
   3. Relativity: The business environment is a relative concept since it differs from country to country and even region to region. Political conditions in the USA, for instance, differ from those in China or Pakistan. Similarly, demand for sarees may be fairly high in India, whereas it may be almost non-existent in France.
   4. Dynamic nature: The business environment is dynamic in that it keeps on changing, whether in terms of technological improvement, shifts in consumer preferences, or the entry of new competition in the market.
   5. Uncertainty: The business environment is largely uncertain, as it is very difficult to predict future happenings, especially when environmental changes are taking place too frequently, as in the case of the information technology or fashion industries.
   6. Complexity: Since a business environment consists of numerous interrelated and dynamic conditions or forces that arise from different sources, it becomes difficult to comprehend at once what exactly constitutes a given environment. It is a complex phenomenon that is relatively easier to understand in parts but difficult to grasp in its totality.