Question

1. Why is it important for a firm to study and understand the external environment? Can you give an example of a firm that failed to do so and suffered financial consequences?
2. What is the appropriate role for governments to encourage or discourage certain purchasing behaviors? You may note many national governments have for decades collected additional taxes on tobacco and alcohol products as a measure to try to moderate consumption of these items.

answer any one of these

Answer 1

a company does the business in external environemnt so it becomes very important for themn to understand the behaviours of the customer and also the strategies adopted by their competiors to gain markets share

customer is the king of market  

in current scenario only those business can survive who adapts itself according to chaning patterns of consumer and and as per its exterrnal enviornement

nokia was once a time was having most of the market share in cell phones but then it did not focus on adopting new technoligies and giving better cellphones at less prices , due to which theri compeitior took advantage of this and they started to gain major market shaer and now has major market share ie samsung

due to this , time came when it was do or die situtation for nokia they weere not able to pay salaries to employes on time neither they were able to sette their liabity on due date