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?
'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?
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Remember: If a case study involves a sudden change in external forces (like government policy or competitors) ruining a plan, the limitation is always the "dynamic environment."
Updated On: Jun 25, 2026
- Planning may not work in a dynamic environment
- Planning leads to rigidity
- Planning does not guarantee success
- Planning involves huge costs
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The Correct Option is A
Solution and Explanation
Step 1: Concept
Limitations of Planning.
Step 2: Meaning
While planning anticipates the future, the business environment is highly volatile. Plans can quickly become obsolete if external forces shift unpredictably.
Step 3: Analysis
• The company laid out a logical plan based on the current high demand for electric vehicles.
• A sudden, unexpected change occurred when the government introduced new manufacturing incentives, flooding the market with competitors.
• Because the environment changed so rapidly and suddenly, the company's initial assessments failed, proving that static plans struggle against volatile external changes.
Step 4: Conclusion
The scenario clearly illustrates that when the business environment shifts unexpectedly, well-laid plans may no longer be effective.
Final Answer: (A)
Limitations of Planning.
Step 2: Meaning
While planning anticipates the future, the business environment is highly volatile. Plans can quickly become obsolete if external forces shift unpredictably.
Step 3: Analysis
• The company laid out a logical plan based on the current high demand for electric vehicles.
• A sudden, unexpected change occurred when the government introduced new manufacturing incentives, flooding the market with competitors.
• Because the environment changed so rapidly and suddenly, the company's initial assessments failed, proving that static plans struggle against volatile external changes.
Step 4: Conclusion
The scenario clearly illustrates that when the business environment shifts unexpectedly, well-laid plans may no longer be effective.
Final Answer: (A)
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