Q."The same environmental change can be both an opportunity and a threat." Explain this statement using the New Economic Policy as an example.

The NEP was an opportunity for businesses that could compete on quality and cost, and a genuine threat for those that could not adjust in time.

A business environment factor is neither inherently good nor bad in itself — whether it becomes an opportunity or a threat depends on how ready a particular business is to respond to it. The New Economic Policy of 1991 is the clearest illustration of this in the chapter.

For businesses that were ready to compete — willing to raise quality, control costs, and adopt new technology — the NEP was a major opportunity: it brought access to foreign capital and technology, sharpened competitive efficiency, opened new markets, and enabled entirely new sectors (like IT and IT-enabled services) to grow rapidly. Many such businesses grew substantially in the years after 1991.

For small and domestic businesses that had grown used to operating with less competition, often behind tariff protection, the SAME policy change was a genuine threat: they suddenly faced large, well-capitalised foreign firms and more efficient domestic rivals, and many struggled to raise the investment needed to meet global-standard quality and cost benchmarks quickly enough to survive. …