Question

4.Favourable and unfavourable factors of Indian Business Enviroment?
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Answer 1

Answer:

Economic factors throw light on the nature and direction of the economy in which a firm operates. Consumption patterns are usually governed by the relative affluence of market segments. Therefore, while carrying out strategic planning exercises, the firm must focus attention on economic trends in the segments that affect its industry.

Low interest rates on personal savings, for example could compel indivi­duals to equity and bond markets, leading to a boom for the capital market activity and mutual fund industry. At the national and international level, the firm must look into the general availability of credit, the level of disposable income and the propensity of people to spend.

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Interest rates, inflation rates, unemployment rates and trends in the gross national product, governmental policies, sectoral growth rates of agriculture, industry infrastructure, etc., are other economic influences it must consider.

The world is a small networked village. Most nations are interconnected and interdependent now—thanks to the rapid advances in technology all over the globe. As a result firms, everywhere, are compelled to scan, monitor, forecast and assess the health of economies outside their host nation.

When the US economy slipped into a recession in 2001 interest rates were cut. They were cut repeatedly with a view to stimulate global output growth. Interest rates on home loans have fallen to rock bottom levels—to spur demand for new homes.

Low interest rates are aimed at boosting up sales of consumer durables, passenger cars, electronic items, gold and jewellery etc. Any expansion of consumer expenditures should lead to increased industrial activity—stimulating demand for various other items.

Answer 2

Answer:

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Explanation:

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