MS-93 Management of Small and New Enterprises Exam Paper
MBA - Master of Business Administration
Note: This paper consists of two Section A and B. Attempt any three questions from Section A each carrying 20 marks. Section B is compulsory and carries 40 marks.
1. You have found through informal observation that many households in the high-income category are now buying European vegetables such as broccoli. You have some agricultural land near a metropolitan centre. You re confident that you will be able to grow these vegetables which fetch a premium price. Work out a business plans incorporating.
(a) Estimation of the market potential, identification of large segments, both household and institutional.
(b) Possible alternatives for physical distribution
(c) Market entry strategy.
2. A major problem faced by small-scale entrepreneurs in marketing their products is that the public promotion regarding the quality of their products is mostly unfavorable. What steps can you take towards quality assurance? Do you think TQM as a concept is implementable in a small unit environment? What are the quality control measures used by small enterprises generally?
3. These days, there is an increasing realisation that professionalism should take precedence over ownership. In several large Indian family - owned firms, professionals have taken over the reins. Do you think this conflict also exists in small-scale enterprises? If so, what are the possible options for integrating ownership with professionalism? What are the challenges faced by family managed enterprises?
4. Government of India has developed a number of special schemes for providing finance to the small-scale enterprises. Evaluate some of these schemes in terms of the needs of a prospective SSI entrepreneur.
5. Explain the concept of Break-even analysis. Work out an example of its application in evaluating a proposal to set up a Cyber Cafe, by using imaginary data.
SECTION - B
6. Read the case carefully and answer the questions at the end:
FACING GLOBAL COMPETITION
To promote the growth of small-scale industry in India, the Government has followed for the last several decades a comprehensive policy of providing protection to the domestic industry. To insulate the small-scale sector from the competition from the large corporate sector-, a policy of reservation of certain categories of products for the small-scale sector was introduce. This policy effectively barred the entry of large - scale units in the manufacture of the reserved items. To provide protection from the cheap imports, the Government had imposed rigorous controls on imports through quantitative restrictions as well as tariffs.
The Uruguay Round negotiations under the WTO which India is a member has put obligations on the Government to eliminate all quantitative controls on imports. Most of all the items which India controls on imports. Most of the items which India currently imports have been made free from quota restrictions w.e.f. 1 April 2000. The few remaining items will be made free from 1 April 2000. Imports of many small - scale sectors products are already allowed quota free. Starting from April 2000, the Government has allowed import of completely built bicycles under Open general License almost after 50 years. Earlier, only import of bicycle parts were allowed under the Open General License.
India is one of the largest producers of bicycles in the world, the number one producer being China. While the industry has many large players, there are also many smaller manufacturers. Taking advantages of this change in import policy, Chinese companies are looking at the Indian market. This is especially true for bicycles for children. The Chinese bicycles for this market segment is cheaper, attractive and easier to handle compared to what is being manufactured in India. Chinese bicycles are made of nylon and plastic, while Indian bicycles for children are made of steel and therefore, heavy. Chinese bicycles cost between Rs. 500 and 600 in India while the Indian kid bicycle cost approximately Rs. 1100 for branded models and approx Rs. 900/- for unbranded products. Between January-April 2000 about 10,000 Chinese bicycles have been imported into India. This is very insignificant now as India has manufactured more than 27 lakh bicycles during that period. However, the industry feels that since the Chinese bicycles are cheap, attractive and lightweight their demand in the Indian market is expected to go up substantially.
The Chinese bicycle imports certainly pose a challenge to the Indian manufacturers.
(1) You are a small-scale manufacturers of bicycles. Prepare a complete plan to face this competition from cheaper imports.
(2) What advice would you give a small entrepreneur producing bicycle parts, under these circumstances. Give reasons for your answers.
