Some of the impacts of changes in government policy on business and industry are: 1. Increasing Competition 2. More Demanding Customers 3. Rapidly Changing Technological Environment 4. Necessity for Change 5. Need for Developing Human Resource 6. Market Orientation 7. Loss of Budgeting Support to the Public Sector 8. Threat from Multinational Corporations 9. Corporate Vulnerability 10. Enhanced Focus on Exports.

1. Increasing Competition:

Firms are now facing competition not only from existing players and new local entrants but also from the multinational competitors.

They have to compete with the rest of the world. Market orientation and liberalization has created the situation of all round competition.

2. More Demanding Customers:


Increased competition has widened the choice of customers in respect of goods and services. Thus, the customers have become more demanding. Consequently, many new schemes are being evolved by companies to attract the customers in highly customer oriented markets.

3. Rapidly Changing Technological Environment:

Rapidly changing technological environment helps the firms to improve their goods and services, equipments and methods in order to face the competition and survive in the market. Moreover, producers are now using world class technology. This leads to more investment in Research and Development (R & D), Innovation Product Development etc.

4. Necessity for Change:

Since the market forces have become very dynamic, the firms have to continuously change their activities to survive in the market. They have to modify their existing policies and operations from time to time as proactively as possible.

5. Need for Developing Human Resource:

To compete with the foreign firms, Indian companies must have highly skilled, trained and competent human resource. Therefore, huge amount of money is now being spent on the training and development of employees.

6. Market Orientation:


Today the market has become consumer oriented. Thus, the firms must study the market situation first and then produce goods according to the demand of the customers. Accordingly, the firms now plan production on the basis of market research, need and want of customers.

7. Loss of Budgeting Support to the Public Sector:

The reduction in the financial help by the Central Government to the public sector enterprises has made these enterprises realise that they have to generate their own resources to survive and grow.

8. Threat from Multinational Corporations:

With the entry and consolidation of multinational in India, Indian companies are facing takeover threats and are having subordinate position in joint ventures.

9. Corporate Vulnerability:

With increased presence of MNCs, financial weaknesses of Indian firms have come to force. Foreign markets have become aware of in competencies of Indian companies.

10. Enhanced Focus on Exports:


The new trade policy has helped Indian business firms to boost exports and hence earn precious foreign exchange required for importing according to their requirements.