Question

‘Renew Ltd.’ was the pioneer in the Electric Vehicles segment and presently has 70% market share. Keeping in mind the rapidly increasing demand for Electric Vehicles due to the rising environment consciousness among people and lower operating costs, the company set a target to increase its market share to 80% in the current year. However, the incentives provided by the government to encourage manufacturing of Electric Vehicles attracted many new players in the market. As this change in the business environment happened suddenly, the company was not able to accurately assess future trends. As a result, the market share of ‘Renew Ltd.’ fell from 70% to 55% in the current year. Which limitation of planning has been discussed in the above case ?

• A. Planning may not work in a dynamic environment
• B. Planning leads to rigidity
• C. Planning does not guarantee success
• D. Planning involves huge costs

Hint:

Planning is a "future-oriented" process. If the future becomes unpredictable due to external shifts, the plan loses its effectiveness.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
Business planning relies on forecasting future events. However, the external environment (economic, political, social) is "dynamic" and subject to rapid, unpredictable changes that can render existing plans obsolete.
Step 2: Detailed Explanation:
The case highlights that the business environment changed "suddenly" due to new competitors and government incentives. Because the company could not "accurately assess future trends" amidst this volatility, their plan to increase market share failed. This illustrates that planning has limitations when faced with a highly unstable or dynamic market.
Step 3: Final Answer:
The limitation discussed is (a) Planning may not work in a dynamic environment.