MS 93 Management of Small and New Enterprises Previous 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. (a) What are the support needs of small entrepreneurs?

(b) Critically evaluate the role of small-scale enterprises in economic development. Do you agree that enterpreneurship is a low cost strategy for economic development? Comment.

2. (a) What are the factors that need to be understood by a small entrepreneur in order to determine market demand for his products or services?

(b) If you were the manufacturer of a detergent intended to be marketed locally in your town, how would you analyse the competitive situation for your product?

3. (a) What are the projects cost components that need to be reflected in the business plan?

(b) Why is it necessary for a small entrepreneur to draw up an implementation schedule for his business plan? What are the considerations that should be kept in mind while drawing up an implementation schedule?

4. (a) Describe the major sources of recruitment utilized by small-scale industries in India.

(b) You are a small entrepreneur in the domestic appliance servicing business. You operate by sending your team of service professionals to the residence of your clients. As the business has grown, you would like to increase the size of your trained workforce. What are the training alternatives available to you and which ones would you like to select? Justify your choice.

5. What are the measures of marketing performance that can be used by small entrepreneurs? How would you evaluate your market performance id you were an entrepreneur running a dry cleaning service at three locations in your city. Suggest the measures you would use.

SECTION B

Read the case given below and answer the given questions:

DR. LAL'S PATH LABS
Business concept: national pathological grid
No. Of labs planned: 10-15 every year
Company investments: Rs. 2 crore
Franchisee investments: minimum Rs, 50 lakh
Franchisee's ROI: 25-30 per cent

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 near future --- has found a way to do just that. Dr. Lal is appointing master franchisees in large towns. These will act as collection centres where patients can walk in to deposit there samples. With the help of global management consultants Arthur Andersen. Lal has invested Rs. 2 crore in a diagnostic software. So, when a patient walks into one of his franchised collection centres, say in Patna, the software generates a bar code, which is affixed to the sample and also registers him at the Delhi lab. As soon as the sample arrives in a special0temperature container, it is read by the lab's computers. Then it is sent to the diagnostic machine where it us tested and revalidated. Following this, the data is transferred to Patna -- all in less than 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 pathologists. 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. 50 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 with pathology labs in towns like Suratm Vadodara, Kolapur and Sholapur.

To carry his business idea forward, Lal is enlisting the support of his community of pathologists. 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. 50 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 with pathology labs in towns like Suratm 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 this 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 operations, The stake, he is offered, will depend on the kind of value he generates and service he provides.

Questions:

1) Critically evaluate the business opportunity outlined above.
2) What are the problems that you foresee for this idea? Explain.
3) What kind of quality control measures would need to be used in this case? Briefly describe.