MS-93 Management of Small and New Enterprises Test 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. (a) What do you understand by the term 'entrepreneurial competencies'?

(b) Describe the process by which you would develop such competencies among unemployed graduates, seeking to set up and small enterprises.

2. How would you determine whether a business opportunity chosen by you as a small entrepreneur is worth pursuing? Identify the steps that you would take to assess the viability and attractive of a business opportunity.

3. You are a small entrepreneur planning to start a catering service for supplying lunch and refreshments to commercial offices in your city, by using teams of delivery boys to deliver the food. Prepare a checklist of variables you would need to include in your capital estimates for preparing your business plan.

4. What are the distribution alternatives available to small entrepreneur? What are the factors that as a small entrepreneur you would need to consider for selecting appropriate distribution channels for the following?

(a) A manufacturer of pickle's and preserves

(b) A manufacturer of preschool toys

5. (a) What are the measures that can be used for evaluating marketing performance of small enterprises?

(b) Identify and briefly describe some financial rations that enable small entrepreneurs to assess their own performance.

SECTION B

6. Read the given case and analyse the questions given at the end:

DR. LAL'S PATH LABS

Try getting a relatively complicated virus test in any non - metro town in India. Chances are you won't find a lab, which can do it. That's because other than in metropolitan towns, such facilities are simply not available.

Now, that would seem like a great business opportunity -- especially for Dr. Lal's Path Labs, Delhi's oldest pathological lab. But expanding the network is fraught with great risk. Even if one test-tube gets exchanged, there is every danger of getting a wrong diagnostic result. So, the question is how do you expand without impairing the quality of service?

The key is the degree of control, Lal's national pathological grid, which is in the process of being rolled out in the ear future, has found a way to do just that. Dr. Lal's appointing master franchisees in large towns. These will act as collection centres, where patient's can walk in to deposit their samples. With the help of global management consultants Arthur Andersen, Lal has invested a Rs.2 crores in diagnostic software. So, when a patient walks into one of his franchised collections, say in Patna, the software generates a bar code, which is affixed to the sample and also registers him at Delhi lab. As soon as the sample arrives in a special-temperature container, it is read by the lab's computers. Then it is sent to the diagnostic machine where it is tested and revalidated. Following this, the data is transferred to Patna all in less then 24 hours. A large franchise network allows Lal the necessary economies of scale to invest in expensive equipment to carry a battery of specialised tests, which are normally available in select hospitals.

To carry his business idea forward. Lal is enlisting the support of his community of pathologies. Dr. Praful Amin, a successful pathologist in Mumbai, is already a part of the pathological grid, and a partner. The way it works; Lal invites experienced doctors to be franchisees. They must have a minimum turnover of Rs. 2 crore, and also Rs. 500 lakh to invest in the software. Once they sign on, Lal and the franchisee will together invest in an electronic network to pass on data. With the infrastructure in place, the franchisee then looks at expanding his network. For instance, Amin is talking to doctors with pathology labs in towns like Surat, Vadodara, Kolapur and Sholapur.

But would a successful doctors fancy himself as a mere franchisee? Lal realises the gravity of the issue. So, he envisages that two-three years down the line, most of his franchisees will be offered a stake in his company. "Once we have developed a good working relationship and got used to his kind of business operation. I expect most franchisees to own small stakes in the company," says Lal, Once a pathologist evinces interest, Lal will carry out a due diligence of the franchisee's organisations. The stake he is offered will depend on the kind of value he generates and service he provides.

Questions:

(a) Evaluate the business concept in terms of available opportunities.

(b) How do you assess the organisational set-up being planned by Dr. Lal? What are the barriers that are likely to arise?