The policy of Liberalization, Privatization and Globalization of the government has made a significant impact on the working of Indian business and industry.
- Increasing Competition: Firms now face competition not only from Indian firms, but also from multinational companies (MNCs), especially in service industries like telecommunications, airlines, banking, insurance, etc.
- More Demanding Customers: Customers today have become more demanding as increased competition in market gives customers wider choice in purchasing better quality of goods and services.
- Market Orientation: Earlier firms had production-oriented marketing operations. But in the present scenario, there is a shift to market orientation, where the firms have to study and analyse the market first to identify customer needs and produce goods accordingly. Marketing research, educational advertising, after-sales services, etc. have become more significant.
- Rapidly Changing Technological Environment: Technology is changing very fast, which creates tough challenges before smaller firms. The rapidly changing technological environment requires improvement in machines, processes, products and services. Business firms have to develop new products and technologies to survive and grow in the market.
- Necessity for Change: After 1991, the market forces have become turbulent as a result of which the enterprises have to continuously modify their operations. Investments in R&D and innovations schemes have become a must.
