“Companies that fail to adopt to their environment are unlikely to survive in the long run.” Discuss with an example.

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Approved answer

It is right to say that the companies that fail to adopt to their environment are unlikely to survive in the long run because environment constitutes the forces and factors such as technological change, economic change, change in government policy, change in customer’s demand, change in competitor’s policy, etc. Companies have to survive with these forces and factors. If companies are able to make change or adopt the conditions according to changes taking place, then these companies can survive otherwise they will be thrown out by market forces. Understanding of business environment is necessary for its long term success. Example: Weston company, a major player in TV market, was having 5896 market share, lost out heavily from competition from imported products. Its market share became negligible by 1995-96. Its turnover reduced to 50 crore in 1995-96 from 99 crore in 1991-92. Now the company is almost unknown in the color TV market. The reason for loss of Weston company was, they failed to adopt the changes taking Place in business environment.