MGT206 Business Environment

Business EnvironmentTU Board 2022

Read the following case carefully and answer the questions given below: Tea industry in Nepal is growing rapidly due to the active participation of the private sector. Now, Nepal is self sufficient…

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Read the following case carefully and answer the questions given below: Tea industry in Nepal is growing rapidly due to the active participation of the private sector. Now, Nepal is self-sufficient in CTC tea. There is a huge international market for Orthodox tea. According to Nepal Tea and Coffee Development Board, 20 million kg is orthodox. About eight million kg of tea produced in the country is consumed domestically and the rest 12 million kg are exported. The National Agricultural Research Center (NARC) has started research on production of Nepali variety of tea. The center which is based at local Pakhribas Municipality has initiated the research for developing a unique Nepali brand of tea that would stand out in the world tea market. Likewise, after 154 years of tea cultivation, Nepal's traditional tea has finally got an international trademark and its own logo in the international market. After numerous attempts of the Nepal Tea and Coffee Development Board, organization association with tea productions, and experts in the field, Nepali tea has received its own logo and trademark. International demand for tea produced in Nepla was hit hard in Europe and USA when a test in Germany few months ago reveled that it contained a harmful chemical called 'antiraquinone'. However, the situation has improved. Organic has become a minimum quality acceptable in Western markets. Western customers have started seeking other standards in tea production, such as eco-friendliness and bio-friendliness. In the past few weeks, Indian tea producers and traders have been seeking ban on import of non-organic orthodox tea from Nepal in their country. Keeping health issues in mind, some organic tea producers in the country have demanded the government to make all the production of tea organic in Nepal. They have argued that this step not only have health benefits for consumers, but also helps the economy grow. However, those in opposition say that the move could do more harm than good. Organic production takes at least three years to complete. And with the lengthy time, the production can be affected by fertilizers shortage and other challenges, according to non-organic tea producers. Frequent strikes by the workers, effect of climate change, low labour productivity, poor support from the government, high cost of capital, use of modern technologies, competition with Indian tea, and promotion at international market are some of the major issues confronting the Nepalese tea industries. Questions : a. Identify two components of the task and general environment each of the Nepalese tea industry. b. In your opinion, what are the opportunities and threats for Nepalese tea industries? c. In view of the growing globalization, what strategies should Nepalese tea industries adopt to remain competitive in the market. d. Write how innovation is being important factor of Nepalese tea industries.

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