Enterprise Marketing — Entrepreneurship STD 12 Commerce — Question

Beta Ltd. is a steel manufacturing company having its headquarters at Mumbai. It is the tenth largest steel manufacturing company of the world. Gama Ltd. are also steel manufacturers with their headquarters in Rangoon, the capital of Myanmar. For a long period the company (Gama Ltd.) had been facing workers unrest and it decided to sell its business to an international bidder. The highest bid for this was made by Beta Ltd. for ₹ 10 lakh crores. Afterwards Beta Ltd. realised that the assets of Gama Ltd. were overvalued and liabilities were under-assessed and hence the price paid by them was higher. The employees of the two entities have different corporate cultures and styles of leadership which led to the problem of co-ordination. Ultimately Beta Ltd. had to close its business.

1. Identify the growth strategy adopted by Beta Ltd.
2. Quoting lines from the above paragraph, explain any two reasons for the failure of Beta Ltd. after it took over the business of Gama Ltd.

Differentiate between Unit Cost and Unit Price.

Explain value addition by giving examples.

Why is it essential that employees perform together as a collective unit? HOTS

Kamal Ltd. are manufacturers of textiles, having their plant in Surat, a city of Gujarat. Vastra Ltd. are the manufacturers of readymade garments and sell their products throughout the country. They also export their products to America and European countries. Vastra Ltd. source their textiles from Kamal Ltd. The management of the two companies decided to merge to have economies of large scale production.

1. Identify the type of merger entered into by Kamal Ltd. and Vastra Ltd.
2. Also, explain a type of merger other than the one identified in (a) above.

Lalit a small Entrepreneur is manufacturing portable fans with the brand name 'P ­FAN'. These fans are in great demand. He finds that the cost of production of per unit of the fan is 800 and he can sell the same at 1,000 per fan. The competitors in the market are selling this type of fan at the rate of 1,200. Lalit's objective is not to earn profit in the short - run but to capture the largest market share. His expectation is that the customers will be attracted towards the new brand because of lower price. Identify the method of pricing adopted by La|it to capture the substantial portion of the market. Also, state any two advantage of this method of pricing.

Distinguish between Fixed Capital and Working Capital.

Explain any three points to be taken into consideration while 'Assessing the Market'.

The footwear industry in India is dominated by ‘B-relax Footwear’. ‘B-relax Footwear’ procures 70% of its raw material from ‘Polymers Ltd.’ The major production of ‘Polymers Ltd.’ is plastic chips, PU foam and elastic which is used by ‘B-relax Footwear’ in its manufacturing processes. After due diligence, they decide to merge with each other. If they merge, ‘B-relax Footwear’ doesn’t need to look for a vendor and sourcing raw materials would be seamless. On the other hand, as a result of the merger, ‘Polymers Ltd.’ doesn’t need to worry about the sales and marketing. All they need to do is to improve their processes to produce better raw materials for ‘B-relax Footwear’. After the merger the combined entity will be known as ‘B-relax Inc’.

1. Identify and explain the type of merger between ‘B-relax Footwear’ and ‘Polymers Ltd.’
2. Why is due diligence required before merger ?
3. Which is the most dominant reason for this merger ? Explain.

Answer each of these questions in about fifty words:
Explain briefly the three functions of SEBI rolled into one body.