Category: CBSE

NCERT Solutions for Class 11 Entrepreneurship Chapter 5B Analysing the Market Environment

TEXTBOOK QUESTIONS SOLVED.

Question 1. Answer each of these questions in about 15 words:
(i) What is micro environment?
(ii) Give one point of difference between the primary forces and secondary forces.
(iii) Who is a producer?
(iv) What is meant by the term ‘demographic forces’?
Answer: (i) Micro environment or internal environment refers to the forces operating in the market that are close or within the enterprise or firm and affect its ability to serve its customers directly. It comprises of the following forces: (1) Producer/Seller (2) Customers (3) Competitors (4) Suppliers (5) Marketing Intermediaries.
(ii) Primary forces refer to the forces which are close to firm or are within the control of firm. Secondary forces are those which are part of the larger society and are the “uncontrollable” to which companies mould itself.
(iii) Producer refers to an individual or a group of individuals who bring all the factors of production together and bring into existence something which has utility and commercial value.
(iv) Demographic forces refer to size, density, location, age, gender, race, and occupation of the population in the locality or in the area of the market.

Question 2. Answer each of these questions in about 50 words: (i)Define Market environment.
(ii)Define Macro environment.
(iii)Define customers.
Answer:  (i) The market environment refers to factors and forces that affect a firm’s abfi’ty to build and maintain successful relationships with customers.
(ii) Macro environment refers to all forces that are part of the larger society and are the “uncontrollable” to which companies mould itself through setting the “controllable” factors.
(iii) Customers refer to a person(s)or firms who buy/s goods or services from a shop, enterprise or business. They are the ultimate consumers of the product.

Question 3. Answer each of these questions in about 75 words:
(i) Performing sellers sustain and succeed in the market. How?
Answer:  (i) Performing sellers sustain and succeed in the market because—:

• They keep themselves aware of market needs and trends.
• They give market a solution for their ‘unmet’ needs.
• They identify opportunities and threats in the environment.

Question 4. Answer each of these questions in about 150 words:
(i) Differentiate between competitors and suppliers as primary forces of market.
(ii) “Consumer is the King”. Why?
Answer:  (i) (a) Competitors provide similar offerings for goods and services whereas suppliers normally offer only one brand of goods or service.
(b) Competitors try for developing strategic advantage over their competitors whereas suppliers take advantage of the strategies made by the parent firm.
(ii) Consumer is the King because of the following reasons:
(a) Consumer’s willingness is involved in the purchase of products.
(b) Consumer is smart and want full return for its money.
(c) Useful creativity is always appreciated and accepted by the consumer.
(d) Consumer satisfaction is the foundation stone of a successful business.

Question 5. Answer each of these questions in about 250 words:
(i) Discuss the primary forces that comprise the internal environment of the market.
(ii) Explain the term Secondary Forces. What all external environment comprise of? Explain with suitable examples.
(iii) Differentiate between the Micro and Macro environment.
Answer:  (i) Following are the Primary forces that comprise the internal environment of the market:
(а) Producer/Seller: The goals, objectives, policies, strategies, etc. of the organization are the foremost forces which govern the market. Successful companies are those that can recognize and respond profitably to unmet needs and trends in the society. Unmet needs always exist.”PERFORMING SELLERS” sustain and succeed in the market. Catering to social responsibility, if more is the number of producers, harder and healthier would be the competition. Ethics, values, principles, creativity, innovativeness of the seller helps in setting trends for market.
(b) Customers: Consumer is the King instead of trying to market what is essential for us to make, we must find out much more about what the consumer is willing to buy. We must apply our creativity more intelligently to people, and their wants and needs, rather than products. The most influential force which rules the market is the ‘Consumer’. Consumer satisfaction is the foundation stone of a successful business. Business has to produce goods according to the needs of the customers. But knowing customers is never simple.
(c) Competitors: Competitors are such factors in the micro environment that provide similar offerings for goods and services. To remain competitive, an enterprise must consider who their biggest competitors are. With LPG, the level of competition is no more local or national, but international. The company should develop a strategic advantage over their competitors else if it’s otherwise the fate of the enterprise is doomed. Edmund Burke believes “An opponent is our helper”.
(d) Suppliers: Suppliers are another key component in the core system of market. The company is essentially a resource – conversion machine that converts material, machines, labour and funds into useful products. The necessary resources are obtained from suppliers. How well the company buys depends on how well it grasps the working of the various supply markets and how well it applies business principles in conducting its relations with suppliers. Lack or non-availability of suppliers can ruin the market for a product.
(e) Marketing Intermediaries: Marketing intermediaries are institutions that facilitate the flow of goods and services between the company and its final markets. They include resellers (i.e. wholesalers, retailers, agents and brokers), transporters, warehouses, banks and promoting agencies. These all institutions come into being to facilitate the work of consummating exchanges in the market. They perform a great deal of work in bringing about transactions between the buyers and sellers, market cannot survive without these intermediaries.
(ii)Secondary forces or Macro environment refers to all forces that are part of the larger
society and are the “uncontrollable” to which companies mould itself through setting
the “controllable” factors.
Following are the factors that comprises of Macro environment:
(a)Demographic Forces: Demographic forces refer to features of populations with reference to size, density, location, age, gender, race, and occupation. These features help to divide the population into market segments and target markets. Each classification has its unique and different characteristics and causes.
(b)Economic Factors: These refer to the purchasing power of potential customers and also the patterns in which people spend their money. Expenditure pattern of customers is different in different economic situations of the economy.
(c)Technological Forces: The technological environment is perhaps one of the fastest changing factors in the macro environment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards. Advances in technology have provided opportunities to new products, new ways of selling, new markets and new trends.
(d)Political Forces: The political environment covers all laws, government agencies, and groups that influence or limit other organizations and individuals within a territory. Market is run and regulated by these laws or restrictions. These are different for various places and varies from time to time. The fate of enterprises and markets depend upon the political conditions of the areas in which they are situated.
(e)Natural Factors: These include the natural resources that a company uses as inputs and affects their marketing activities. The ability to create a company’s product is becoming a tough task for the enterpriser. Also, pollution, government intervention, etc. have effect on a company’s reputation if they are known for damaging the environment.
(f)Cultural Forces: The cultural environment, which consists of institutions and basic values and beliefs of a group of people. The values can also be further categorized into core beliefs, which passed on from generation to generation and very difficult to change, and secondary beliefs, which tend to be easier to influence.
(iii) Differences between Micro environment and Macro environment:

MORE QUESTIONS SOLVED

I. VERY SHORT ANSWER TYPE QUESTIONS [1 MARK]
Question 1. Give examples of collapse due to failure to meet environmental challenges.
Answer:  Nations (Assyria), Species (dinosaurs), industries (Kingfisher) have collapsed because they failed to meet environmental challenges with creative responses.

Question 2. What is demography?
Answer: Demography refers to studying human populations in terms of size, density, location, age, gender, race and occupation.

Question 3. What keeps spinning around in the market?
Answer: Opportunities and threats keep constantly spinning around. Those enterprises that ignore or resist market forces bear the brunt.

Question 4. What does excellent companies keep on doing constantly in the market?
Answer: Excellent companies take an outside-inside view of the market and its forces.

Question 5. ‘Google’ and ‘Yahoo’ just appeared and captured, whereas solids like American Airlines and Avon are almost on the brink of winding up. Why?
Answer:  Because something in market was either in their favour or against them.

Question 6. What forms the environment of the market?
Answer:  The network of “key institutions” interact to supply the markets with needed goods and services, collectively form the ‘environment’ of the market.

Question 7. What is market?
Answer:  A market is an arrangement of establishing effective relationship between buyers and sellers of the commodities.

Question 8. Which factors or forces are at play in the market?
Answer:  Following factors or forces are at play in the market:

• Micro (Internal) Environment – Primary
• Macro (External) Environment – Secondary

Question 9. What is said by Edmund Burke related to competitors?
Answer:  Edmund Burke said that “An opponent is our helper”.

Question 10. How well the company buys the resources depends on which features?
Answer: How well the company buys the resources depends on
(i) how well it grasps the working of the various supply markets.
(ii) how well it applies business principles in conducting its relations with suppliers.

Question 11. What can ruin the market for a product?
Answer: Lack of suppliers can ruin the market for a product.

Question 12. What are marketing intermediaries?
Answer: Marketing intermediaries are the organizations or institutions that facilitate the flow of goods and services between the company and its final markets.

II. Short Answer Type Questions [2/3 Marks]

Question 1. Explain market.
Answer: A market is an arrangement of establishing effective relationship between buyers and sellers of the commodities.

• It consist of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want.
• It is the forces of demand and supply which represents the aggregate influence of self- interested buyers and sellers on price and quantity of the goods and services offered in the market.

Question 2. What do you mean by a firm?
Answer: A firm is a business organization, such as a corporation, limited liability company or partnership. Firms are typically associated with business organizations that practice law, but the term can be used for a wide variety or business operation units.

Question 3. Give the features of the market.
Answer:  Following are the main features of the market:

• Presence of buyers and sellers
• Presence of a commodity (Good or service) which is to be transacted.
• It refers to the whole area where buyers and sellers are in contact. It do not refer to any place.
• There is competition between buyers-buyers, sellers-sellers and buyers-sellers.

Question 4. Give examples of failures of some successful companies.
Answer:  Following are the examples:

• ‘Motorola, a few years back, dominated the mobile industry. Earlier, it had almost 50% of the cell phone handset market, which now is merely 17%.
• ‘Satyam’ was once ranked 4th in the top Indian IT companies list in 2008, but collapsed in 2009.

Question 5. Which forces govern the market?
Answer:  The goals, objectives, policies, strategies, etc. of the organization are the foremost forces Which govern the market. Successful companies are those that can recognize and respond profitably to unmet needs and trends in the society. Unmet needs always exist.

Question 6. List some unsolved problems in the world.
Answer: Following are some of the unsolved problems of the world:

• A sure shot cure for cancer.
• Permanent chemical cure for mental diseases.
•  Desalinization of sea-water.
• Non-fattening tasty nutritious food
•  Voice-controlled computer, etc.

Question 7. Which enterprises rule the market?
Answer: Those enterprises rule the market, who are capable of:

• Keeping itself aware of market needs and trends.
• Giving market a solution for their ‘unmet’ needs.
• Identifying opportunities and threats in the environment.

Question 8. Which features are to be taken into consideration to create, maintain and retain consumer?
Answer: Following features are to be taken in consideration to create, maintain and retain consumer by the enterprises:

• Tradition, customs, beliefs, values of society and customers
• Lifestyle, standard of living, consuming habits
• Propensity to consume and save
• Education level, thinking behaviour
• Income level
• Demographic characteristics, etc.

Question 9. How does the consumers’ demand affect enterprises?
Answer: Consumers’ demand affects enterprises as it affects the following things of the enterprises:

• Profitability
• Reputation and goodwill
• Expansion plans.

III. Short Answer Type Questions [4 Marks]

Question 1. What are the features of marketing intermediaries?
Answer: Following are the features of marketing intermediaries:

• Marketing intermediaries are the organizations or institutions.
• These facilitate the flow of goods and services between the company and its final markets.
• These include resellers, i.e. wholesalers, retailers, agents, and brokers, transporters, warehouses, banks and promoting agencies.
• These facilitate the work of consummating exchanges in the market.
• These bring about transactions between the buyers and sellers.
• These are indispensable part of market.

Question 2. What do you mean by Macro environment?
Answer: Macro environment refers to all forces that are part of the larger society and are the “uncontrollable” to which companies mould itself through setting the “controllable” factors.

Question 3. Why are demographic forces play an? important role in the market?
Answer: Demographic forces play an important role in the market because of the following reasons:

• They help to divide the population into various market segments.
• They help to divide the population into target markets.

Question 4. Give an example demographic classification.
Answer:  Classifying groups of people according to the year they were born. Based on this classification following groups can be made:

1. Baby boomers: Those individuals who are born between 1946 and 1964.
2. Generation X: Those individuals who are born between 1965 and 1976.
3. Generation Y: Those individuals who are born between 1977 and 1994.

Question 5. What do you mean by economic factors?
Answer: Economic factors refer to the purchasing power of potential customers and the ways in which people spend their money. Under conditions of boom, buyer behaviour is different than its behaviour during recession and depression, thus affecting the market.

Question 6. What does technological forces include?
Answer: Technological forces includes various types of technological changes that have taken place in all the fields of the economy. It covers all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards. Advancement of such kind have provided opportunities to new products, new ways of selling, new markets and trends.

Question 7. What does political forces include?
Answer: The political forces is a mix of all laws, government agencies, and groups that influence or limit other organizations and individuals within a given society.

Question 8. Give the features of political forces.
Answer:  The features of political forces are:

1. It include the political environment of the society
2. It comprises of all laws, government agencies, and groups that influence or limit other organizations and individuals.
3. These regulate the market.
4. These varies from place to place and time to time.
5. These determine the fate of companies and markets.
6. These are highly dynamic.

IV. Long Answer Type Questions [6 Marks]

Question 1. Explain the forces of Micro environment or internal environment.
Answer: Following are the forces of Micro and Internal environment:

1. Producer/Seller:The goals, objectives, policies, strategies, etc. of the organization are the foremost forces which govern the market. Successful companies are those that can recognize and respond profitably to unmet needs and trends in the society. Unmet needs always exist. “PERFORMING SELLERS” sustain and succeed in the market. Catering to social responsibility, if more is the number of producers, harder and healthier would be the competition. Ethics, values, principles, creativity, innovativeness of the seller helps in setting trends for market.
2. Customers: Consumer is the King instead of trying to market what is essential for us to make, we must find out much more about what the consumer is willing to buy. We must apply our creativity more intelligently to people, and their wants and needs, rather than products.
   The most influential force which rules the market is the ‘Consumer’, consumer satisfaction is the foundation stone of a successful business.
   Business has to produce goods according to the needs of the customers. But knowing customers is never simple.
3. Competitors: Competitors are such factors in the micro environment that provide similar offerings for goods and services. To remain competitive, an enterprise must consider who their biggest competitors are. With LPG, the level of competition is no more local or national, but international. The company should develop a strategic advantage over their competitors else if it’s otherwise the fate of the enterprise is doomed. Edmund Burke believes “An opponent is our helper”.
4. Suppliers: Suppliers are another key component in the core system of Market. The company is essentially a resource — conversion machine that converts material, machines, labour and funds into useful products. The necessary resources are obtained from5 suppliers. How well the company buys depends on how well it grasps the working of the various supply markets and how well it applies business principles in conducting its relations with suppliers. Lack or non-availability of suppliers can ruin the market for a product.
5. Marketing Intermediaries: Marketing intermediaries are institutions that facilitate the flow of goods and services between the company and its final markets. They include resellers (t.e. wholesalers, retailers, agents, and brokers), transporters, warehouses, banks and promoting agencies. These all institutions come into being to facilitate the work of consummating exchanges in the market. They perform a great deal of work in bringing about transactions between the buyers and sellers, market cannot survive without these intermediaries.

Question 2. What things should be known by the enterprises in order to have an edge in the competition?
Answer: For the correct assessment following should be known by the enterprises:

• Who are our competitors?
• Level/size of competitors
• The areas of strengths/weaknesses of competitors
• The financial standing of competitors
• Overall image of competitors’ products in the market
•  Operational capacity of the competitors.

The company should develop a strategic advantage over their competitors else if it’s otherwise the fate of the enterprise is doomed.

Question 3. Describe the factors or forces that are the components of Macro environment.
Answer: Following are the factors that are the main players in the Macro environment:

1. Demographic Forces: Demographic forces refer to features of populations with reference to size, density, location, age, gender, race, and occupation. These features help to divide the population into market segments and target markets. Each classification has its unique and different characteristics and causes.
2. Economic Factors: These refer to the purchasing power of potential customers and also the patterns in which people spend their money. Expenditure pattern of customers is different in different economic situations of the economy.
3. Technological Forces: The technological environment is perhaps one of the fastest changing factors in the macro environment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards. Advances in technology have provided opportunities to new products, new ways of selling, new markets and new trends.
4. Political Forces: The political environment covers all laws, government agencies, and groups that influence or limit other organizations and individuals within a territory. Market is run and regulated by these laws or restrictions. These are different for various places and varies from time to time. The fate of enterprises and markets depend upon the political conditions of the areas in which they are situated.
5. Natural Factors: These include the natural resources that a company uses as inputs and affects their marketing activities. The concern in this area is the increased pollution, shortages of raw materials and increased governmental intervention. As raw materials become increasingly scarcer, the ability to create a company’s product gets much harder. Also, pollution can go as far as negatively affecting a company’s reputation if they are known for damaging the environment. The last concern, government intervention can make it increasingly harder for a company to fulfil their goals as requirements get more stringent.
6. Cultural Forces: The cultural environment, which consists of institutions and basic values and beliefs of a group of people. The values can also be further categorized into core beliefs, which passed on from generation to generation and very difficult to change, and secondary beliefs, which tend to be easier to influence. Market reflects the values of a target audience.

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NCERT Solutions for Class 11 Entrepreneurship chapter 3  Entrepreneurial Journey

TEXTBOOK QUESTIONS SOLVED

Question 1. Answer the following in about 15 words:
(i) List the fields in which ‘Trailblazer’ has business strengths.
(ii) List the fields in which ‘Motivator’ has business strengths.
(iii) List the fields in which ‘Collaborator’ has business strengths.
(iv) List the fields in which ‘Diplomat’ has business strengths.
Answer: (i) The trailblazers business strengths include the medical, technology, finance, legal and consulting fields.
(ii) Motivators do well in business with partners, or in a business that involves others.
(iii) Collaborators are good at running customer service-oriented or retail businesses, or any business where being convincing is an important aspect of getting the job done, and done right.
(iv) The diplomats excel in retail or other people-oriented environments. Both outgoing and empathetic, they tend to be well-liked, but they sometimes have a hard time asserting them self and holding others accountable.

Question 2.Answer the following in about 50 words:
(i) Describe the characteristics of a ‘go-getter’ type of personality.
(ii) What is brainstorming?
(iii) What do you mean by ‘Environment Scanning’?
(iv) What are focus groups?
(v) Explain ‘feasibility study’.
(vi) What do you think is the reason for failure of business plan execution?
Answer: (i) Go-getters
(a) have dominance and sociability,
(b) are very driven and independent,
(c) are competitive,
(d) have great deal of initiative,
(e) have sense of urgency to get things done,
(f) are good leaders and good managers,
(g) work well in ambitious and unfamiliar environments.
(ii) Brainstorming is a way of generating idea in which a group of persons sit together and generate a number of business ideas by innovating alternative ways of meeting the needs and solving problems.
(iii) Environment scanning means the screening of large amounts of information to detect emerging changes or trends. Information is scanned from news magazines, reviews, government and consumer publications, trade publications, commercials, etc. Lot of effort is put in but in the end it is energy well spent.
(iv) Focus groups is a way of generating idea in which the groups of individuals provide information about proposed commodity (good or service) in a structured setting. Group provides an excellent way to generate new ideas and to screen proposed ideas and concepts.
(v) Following are the types of feasibility study:
1.Market Feasibility: This involves a complete description of the industry, current situation of the market, anticipated future of the product, competition, sales projections, etc.
2.Technical Feasibility: This involves the issues like how to deliver a product or service, transportation, location of the enterprise, technological requirement, etc.
3. Financial Feasibility: It involves the issues like requirement of the start-up capital, seed capital, sources of capital, returns on investment, etc.
4. Organisational Feasibility: It involves the legal and corporate structure of the business, size of the venture, legal formalities and requirements, etc.
(vi) Many plans fail because of following reasons:
(a) Companies often fail to deliver on their promises.
(b) The strategy followed was wrong.
(c) Strategies not executed well.
(d) The failure to execute the plan.
(e) Ineffective linkage of strategy, people, and work processes.

Question 3.Answer the following in about 75 words:
(i) What do you mean by ‘Opportunity Assessment’?
(ii) Why are feasibility studies more important?
(iii) Why do you think the role of family in an entrepreneur’s life is important?
Answer: (i) Opportunity Assessment includes in-depth review of business opportunity, market research, intellectual property analysis, opportunity development timing, legal liability issues, applications of the opportunity, barriers to entry, industry trends, growth potential, market positioning, competitive analysis, financial projections and pricing, resource requirement analysis and licensing, etc.
(ii) Following are the main features of feasibility study:
(a) Process: A feasibility study is a process in which an idea is studied to see whether it will work and if going to work then how it will work.
(b) Comprehensive: A feasibility study looks at the total structure, needs, requirements, operations of a business, etc.
(c) Specific: Feasibility study looks at one issue, i.e. specific task, program, idea, or problem.
(d) Pros and cons: A feasibility study looks at both sides, i.e. merits and demerits. It also takes into consideration potential problems.
(e) Foundation: A feasibility study serves as a foundation for developing a successful business plan.
(f) Essential requirement for loan: Lending financial institution require the feasibility study considering the proposal for loan by the entrepreneur.
(iii) (a) What family and friends think or opine about entrepreneurship has a crucial role to play.
(b) Besides, the view of the family, their support and the society with regard to failure is also a very important factor.
(c) Family’s support is very essential as the entrepreneur need to borrow initial finances from the family and friends.
(d) The family’s attitude towards education and other careers in fields like medicine, engineering, etc. are also likely to dominate the youth’s mindset towards entrepreneurship.
(e) A prospective bride-groom can also become a deciding factor, promoting or inhibiting entrepreneurship.

Question 4.Answer the following in about 150 words:
(i) According to Dell, what was the final outcome of the study about women entrepreneurs.
(ii) Explain in detail any four entrepreneurial types.
(iii) Explain any four main sources of ideas.
(iv) Explain the types of feasibility study.
(v) Differentiate between feasibility study and business plan.
(vi) What purposes does a business plan serve?
Answer: (i) According to a new study commissioned by Dell in January 2012, the ideal country to be where a woman starting a business in 2012 could well be India. Women entrepreneurs in India anticipate, an average of 90 per cent over the next five years.
(ii) Following are the details of four types of entrepreneurs:
(a) Trailblazers: Trailblazers are:
1. very competitive
2. ambitious
3. goal-oriented
4. tend to be aggressive
5. sometimes take a steamroller approach
6. restless and energetic
7. a strong drive
8. sense of urgency
9. logical, analytical, practical and realistic
10. calculated risk takers
Trailblazers tend to have two speeds: fast and faster. They aren’t happy unless they are in charge. Trailblazers tend to take their decisions on facts rather than feelings. The trailblazers business strengths include the medical, technology, finance, legal and consulting fields. Trailblazers prefer being the driving force of a business.
(b) Go-getters
1. have dominance and sociability
2. are very driven and independent
3. are competitive
4. have a great deal of initiative
5. have sense of urgency to get things done
6. are good leaders and good managers
7. work well in ambitious and unfamiliar environments Go-getters represent the largest percentage of the founders.
Go-getters show a great deal of initiative, coupled with a compelling sense of urgency to get things done. Go-getters are typically good leaders and good managers, excelling at motivating themselves and those around them.
The go-getter’s business strengths could include doing well in retail, but may prefer being the outside rainmaker.
They work well in ambitious and unfamiliar environments. They can invest in, buy or start a business that’s totally new to you and still make a success of it. They don’t need to be an expert in the field to start the business, they are good collaborators and can learn as they go.
(c) Managers. The features of managers are:
1. dominant and independent
2. very goal-oriented
3. quite analytical
4. focusing more on processes and outcomes than on people
5. straightforward style of communication
6. have a higher-than-average level of relaxation
7. loyal, sometimes to a fault, as they consider their employees to be an extension of their family.
The manager’s business strengths are:
1. doing things on their own
2. they excel at competitive selling because they enjoy overcoming rejection and achieving goals.
3. they enjoy working by themselves. Managers excel at competitive selling because they enjoy overcoming rejection and achieving goals despite obstacles.
(d) Motivators. Motivators have following features: They:
1. have a high level of sociability.
2. have the ability to work well under pressure and in autonomous situations.
3. are great consensus builder and a good collaborator
4. are a driver of change
The motivator’s business strengths is:
1. Retail can be their game – or any environment where people are a large part of the equation.
2. They do well in any business that involves people, as long as it’s a somewhat non-confrontational environment.
3. They can be convincing and avoid most confrontations by creating a strong emotional argument.
4. They do well in the toughest of customer service roles, as they are able to see both sides of the argument.
Motivators tend to deal with the negative arguments by using the three F’s—feel, felt and found—saying, —I understand how you are feeling. In fact, I have felt the same way, but when I learned, what I found was (again, insert your point).
Motivators excel at leadership or sales.
Motivators do well in business with partners, or in a business that involves others.
(iii) The different structured approaches adopted to generate ideas are:
1. Environment Scanning: It means the screening of large amounts of information to detect emerging changes or trends. Information is scanned from news magazines, reviews, government and consumer publications, trade publications, commercials, etc. Lots of effort is put in but the end it is energy well spent.
2. Creativity and Creative Problem Solving: Creativity is the ability to combine ideas in a unique way or to make unusual associations between the ideas. It involves cross thinking by seeing new angles, connections and approaches. The role of creativity and creative problem solving for generating ideas is that a number of specific creative approaches can be used. For example attribute listing, free association, etc.
3. Brainstorming: Here a group of persons sit together and generate a number of business ideas by innovating alternative ways of meeting the needs and solving problems. A number of ideas are discussed and finally a concrete idea is the end result.
4. Focus Groups: In this way generating idea, the groups of individuals provide information about proposed commodity (good or service) in a structured setting. Here a moderator focuses the group discussion or issues are being examined. Such group can provide an excellent way to generate new ideas and to screen proposed ideas and concepts.
5. Market Research: This is a method of gathering information about products/ services that already exist in the market. Demand supply position for a particular product or service is studied in the market and based on it new ideas for products and services are obtained.
(iv) Following are the types of feasibility study:
1. Market Feasibility: This involves a complete description of the industry, current situation of the market, anticipated future of the product, competition, sales projections, etc.
2. Technical Feasibility: This involves the issues like how to deliver a product or service, transportation, location of the enterprise, technological requirement, etc.
3. Financial Feasibility: It involves the issues like requirement of the start-up capital, seed capital, sources of capital, returns on investment, etc.
4. Organisational Feasibility: It involves the legal and corporate structure of the business, size of the venture, legal formalities and requirements, etc.
(v) Following are the points of difference between Feasibility Study and Business plan:
(a) A feasibility study can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem. On the other hand, a Business Plan is a written summary of various elements involved in starting a new enterprise like arrangement of resources, mobilizing resources, etc. ib) The feasibility study can be completed prior to the business plan.
(c) The feasibility study helps determine whether an idea or business is a viable or not, whereas the business plan is developed after the business opportunity is created.
(d) A feasibility study is carried out to know if the business venture is worth the time, effort and resources while a business plan is made up of mostly tactics and strategies to be implemented in order to grow the business.
(e) A feasibility study can be converted to a business plan.
(f) The business plan is studied in terms of growth and sustainability whereas the feasibility study studied in terms of idea viability.
(vi) A business plan serves the following purposes:
(а) Blue print: It provides a blueprint of actions to be taken by the firm in future.
(b) Guidance: It guides the entrepreneur in raising and mobilising the factors of production.
(c) Organisation: It serves as a guide to the entrepreneur in organizing and directing the activities of the entrepreneurial venture.
(d) Progress: It helps in measuring the progress of the venture at various stages
(e) Communication: It communicates to investors, lenders, suppliers, etc. initiating the programmes of the business.

Question 5.Answer the following in about 250 words:
(i) Explain in detail the elements of business plan.
(ii) Although there is no singular process to manage the execution of a business plan, there are basic processes-and fundamentals to be followed. Enlist them.
(iii) Explain in detail any six problems faced by women entrepreneurs.
Answer: (i) Proposed Business Plan has the following parts:
1.General Introduction

• Name and address of business
• Name and address of entrepreneur
• Stakeholder of business
• Nature of business and customers

2.Business Venture

• Product(s) to be offered
• Service(s) to be offered
• Scale of business operation
• Type of technology used
• Type of skilled personnel required

3.Organized Plan

• Form of ownership, sole proprietorship, partnership or joint stock company
• Identification of business, associated partners/members, etc.
• Administrative structure
• Identification of management team

4.Production Plan

• Details of manufacturing process
• Physical infrastructure required
• Types of plant and machinery
• Raw materials to be used
• Requirement of power, water, etc.

5.Human Resource Plan

• Categories of human resources or staff required
• Human resource already identified
• Human resource required to be procured
• Time frame for procurement of human resource

6.Marketing Plan

• Products and services offered
• Pricing policies
• Promotional strategies
• Logistics for distribution
• Channels of distribution

7.Financial Plan

• Breakeven analysis
• Fixed capital requirements
• Working capital requirement
• Sources of capital
• Schedule of procurement of capital
• Schedule of procurement of asset
• Cash flow projection

8.Miscellaneous/Appendix

• Market research report
• Contract with venders
• Contract with financial institutions
• Type of business risk
• Contingency plan

(ii)Following processes and fundamentals to be followed for managing the execution of a business plan:

• Focus on Core competencies: Focusing on the core competencies, specific quantifiable goals to support the strategy must be drafted and formulated.
• Evaluation: The organization must be evaluated. It must ensure that the right people with the right skills are in the right jobs. It require reallocation of human
  resources if required. Right number of employees in the various departments are to be appointed.
• Identification: Identification of the following is must—the key initiatives, broad actions that must be accomplished, transitional issues, or the gaps, between where you are today and where you plan to be. Every employee must understand his/ her individual role in accomplishing his/her aspect of the plan.
• Budget: Budget is to be prepared to support the plan.
• Communicate well: There is to be a effective way of giving the message out to the entire organization. Develop compensation and reward systems to support the future vision of the organization.
• Review process: Establishing a review process because the markets, customers, competitors, government regulations, economy, etc. evolve; some priorities, and possibly some goals, may change.

(iii)The following are some of the limitations faced by women entrepreneurs:

• Patriarchal society: The gender bias exists in society and is due to the patriarchal attitude.
• Lack of opportunities: In some area education still has not reached to every female, the lack of education is thus a barrier.
• Enabling technologies for women: There is lack of more opportunities regarding new methods of production, marketing and other modern technologies for women.
• Social barriers: In rural areas, more social barriers are faced. This is due to lack of education and positive legislation.
• Attitude of creditors towards women: Women entrepreneurs suffer while raising and meeting the financial needs of their business. The society was slightly biased in their attitude towards women entrepreneurs.
• Organised sector: The skilled women work more in the un-organised sector and hence does not get her due.

MORE QUESTIONS SOLVED

I. Very Short Answer Type Questions [1 Marks]
Question 1. Does personality matter in becoming a successful entrepreneur?
Answer: Yes, successful entrepreneurs share a number of common features and these features are the predominant indicators of their success.

Question 2. What are the benefits of choosing ventures that are in sync with the true personalities of the entrepreneur?
Answer: Such entrepreneur tend to experience the greatest level of success and fulfilment.

Question 3. Who has the potential to grow a successful business?
Answer: Every person, has the potential to grow a successful business.

Question 4. What does one need to determine for a successful entrepreneur?
Answer: One has to determine the right opportunity for becoming a successful entrepreneur.

Question 5. What is needed to bridge the gap between who we are and what the opportunity requires?
Answer: Self-awareness.

Question 6. Name the types of entrepreneurs.
Answer: Entrepreneurs can be divided into seven types:

1. Trailblazers
2. Go-getters
3. Managers
4. Motivators
5. Authoritarians
6. Collaborators
7.  Diplomats

Question 7. What are the two speeds of Trailblazers?
Answer: Trailblazers tend to have two speeds: fast and faster.

Question 8. When are Trailblazers happy?
Answer: Trailblazers aren’t happy unless they are in charge.

Question 9. What the Trailblazers tend to base their decisions on?
Answer: Trailblazers tend to take their decisions on facts rather than feelings.

Question 10. What does the trailblazer’s business strengths include?
Answer: The trailblazers business strengths include the medical, technology, finance, legal and consulting fields.

Question 11. Why is a Trailblazer able to focus easily on marketing and operations?
Answer: Strong strategic thinking power enables the Trailblazer to focus easily on marketing and operations.

Question 12. What is a challenge faced by the Trailblazers?
Answer: Their challenge faced is to be working with people as they are usually better leaders than managers.

Question 13. What does Trailblazers prefer?
Answer: Trailblazers prefer being the driving force of a business.

Question 14. What tasks are not normally taken by the Trailblazers? 
Answer: Trailblazers wouldn’t buy a franchise or distributorship.

Question 15. When are Trailblazers highly innovative?
Answer: They are highly innovative, especially when it comes to taking an idea to the next level.

Question 16. What makes the largest percentage of the founders?
Answer: Go-getters represent the largest percentage of the founders.

Question 17. What does Go-getter’s business strength?
Answer: The Go-getter’s business strengths could include doing well in retail, but may prefer being the outside rainmaker.

Question 18. Managers excel at competitive selling. Why?
Answer: Managers excel at competitive selling because they enjoy overcoming rejection and achieving goals despite obstacles.

Question 19. How do the Motivators tend to deal with the most negative arguments?
Answer: Motivators tend to deal with the negative arguments by using the three F’s—feel, felt and found—saying,—I understand how you are feeling. In fact, I have felt the same way, but when I learned, what I found was (again, insert your point).

Question 20. Motivators excel what?
Answer: Motivators excel at leadership or sales.

Question 21. Motivators do well in which business?
Or
List the fields in which ‘Motivator’ has business strengths.
Answer: Motivators do well in business with partners, or in a business that involves others.

Question 22. What are motivators good at?
Answer: Motivators are good at nurturing relationships and do best in a business that involves keeping clients for the long term.

Question 23. In what roles the Motivators do well?
Answer: Motivators do well in the toughest of customer service roles, as they are able to see both sides of the coin.

Question 24. Give the examples of businesses that fit the authoritarians.
Answer: Dry cleaning stores, liquor or convenience stores where the need for the product or service is strong.

Question 25. What does an Authoritarian see his customer as?
Answer: An Authoritarian see his customer as an extension of his family.

Question 26. Why do Authoritarian dislike prospecting?
Answer: Authoritarian dislike prospecting as they are accommodating.

Question 27. Till how long are the Authoritarian successful?
Answer: Authoritarian can be very successful as long as the organization is well-supported with advertising and marketing.

Question 28. What is the difference between Collaborator and Authoritarian?
Answer: The difference between Collaborator and Authoritarian is that they have a personality gift called sociability.

Question 29. What characteristics allows Collaborator and Authoritarian to use their influence?
Answer: Sociability allows to use their influence to get what they want.

Question 30.Collaborators are good at what?
Answer: Collaborators are good at running customer service-oriented or retail businesses, or any business where being convincing is an important aspect of getting the job done right,

Question 31. When does the collaborators do well?
Answer: Collaborators do well within structured environments where people are an element of success.

Question 32. Collaborators can be great salesman. Why?
Answer: Collaborators can be great salesmen in a warm selling market because they use their sociability to sell their expertise.

Question 33. What is the meaning of ‘warm selling’?
Answer: ‘Warm selling’ means that the collaborators bring the prospect to them, often through a letter or advertisement enticing the prospect to contact them for more information about their product or service.

Question 34. What does ‘cold selling’ mean?
Answer: ‘Cold selling’ is the one that involves picking up the phone and dialling for dollars, or hitting the streets looking for prospects door to door.

Question 35. Collaborators are not comfortable with what?
Answer: Collaborators aren’t comfortable with cold calling or pitching new ideas as they like to follow prescribed rules and guidelines.

Question 36. Why the Diplomats work at their full capacity?
Answer: Diplomats work at full capacity because of their compliance and their need to do things right, their work at their full capacity.

Question 37. Diplomats can experience difficulty in what?
Answer: Diplomats can experience difficulty in delegating details, but do a great job when they can do the work themselves.

Question 38. What are the two important elements to success of Diplomats?
Answer: Sociability and drive in their personalities are two important elements to success.

Question 39. What do you mean by Generating ideas?
Answer: Generating ideas is an innovative and creative process. In the process of generating ideas, ideas come from, ways to generate ideas and the role of structured approach, analysis and intuition.

Question 40. What is Creativity?
Answer: Creativity is the ability to combine ideas in a unique way or to make unusual associations between the ideas.

Question 41. What is attribute listing?
Answer: Attribute listing is a method in which entrepreneur develops a new idea by looking at the positive or negative features of a product or a service.

Question 42. What do you mean by free association?
Answer: Free association is a process whereby an entrepreneur develops a new idea through a chain of word associations, etc.

Question 43. What is intuition?
Answer: Intuition is a cognitive process by which subconsciously decisions are made on the basis of accumulated or cumulative knowledge and experiences.

Question 44. What is a Business Plan?
Answer: A Business Plan is a written summary of various elements involved in starting a new enterprise like arrangement of resources, mobilizing resources, etc.

Question 45. What is the key to a successful execution?
Answer: The key to a successful execution is alignment.

Question 46. What is the ray of hope with respect to the women entrepreneurs?
Answer: The ray of hope is that rate at which women entrepreneurs are growing is slowly increasing.

II. Short Answer Type Questions [2/3 Marks]

Question 1. What is Nandita’s advice to new entrepreneurs?
Answer: Nandita’s advice to new entrepreneurs is

1. Don’t give up. Keep at it to succeed.
2. Pay the creditors, suppliers and vendors on time. It builds credibility.
3. Treat employees like family. If employees are happy, one’s business will be successful.

Question 2. What are Go-Getters excellent in?
Answer: Go-Getters show a great deal of initiative, coupled with a compelling sense of urgency to get things done. Go-Getters are typically good leaders and good managers, excelling at motivating themselves and those around them.

Question 3. In which environment the Go-getters work well?
Answer: They work well in ambitious and unfamiliar environments. They can invest in, buy or start a business that’s totally new to you and still make a success of it. They don’t need to be an expert in the field to start the business, they are good collaborators and can learn as they go.

Question 4. What are manager’s business strength?
Answer: The manager’s business strengths are:

• Doing things on their own.
• They excel at competitive selling because they enjoy overcoming rejection and achieving goals.
• They enjoy working by themselves.

Question 5.Give the characteristics of Motivators.
Answer: Motivators have following features: They—

• have a high level of sociability.
• have the ability to work well under pressure and in autonomous situations.
• are great consensus builder and a good collaborator.
• are a driver of change.

Question 6. What are authoritarians’ business strength?
Answer: The authoritarians’ business strengths are:

1. They often refer to themselves as—accidental entrepreneurs, because they may end up running a business that was never part of their original plan.
2. They’re best served by going into a business that embraces their level of expertise or allows them to develop a new level of expertise.

Question 7.What are the main features of Collaborators?
Answer: The main features of collaborators are to:

• relish the people’s side of business.
• benefit from having a partner who is more aggressive about developing new business.
• follow prescribed rules and guidelines.
• are good at running customer service-oriented or retail businesses.

Question 8. Diplomats excel in which business and why?
Answer: The diplomats excel in retail or other people-oriented environments. Both outgoing and empathetic, they tend to be well-liked, but they sometimes have a hard time asserting themself and holding others accountable.

Question 9.What does diplomats need to successfully leading a company?
Answer: To lead a company successfully, diplomats need—

• to hire stronger, more result-oriented personalities,
• to be sure that deadlines are met,
• commitments be fulfilled and staff members follow them through doing duties.

Question 10. What is the role of intuition in generating ideas?
Answer: Intuition is a cognitive process by which subconsciously decisions are made on the basis of accumulated or cumulative knowledge and experiences. Intuition can be a powerful source of new ideas if you learn to use it. It provides an idea that is based on the idea of coming out and taking a viable form.

Question 11. What is the Feasibility Study?
Answer:  According to Centre for Entrepreneurship at University of Rochester:
“A feasibility study can be defined as a controlled process for identifying problems and opportunities, determining objectives, describing situations, defining successful outcomes, and assessing the range of costs and benefits associated with several alternatives for solving a problem.”

Question 12. What does Opportunity Assessment include?
Answer: Opportunity Assessment include in-depth review of business opportunity, market research, intellectual property analysis, opportunity development timing, legal liability issues, applications of the opportunity, barriers to entry, industry trends, growth potential, market positioning, competitive analysis, financial projections and pricing, resource requirement analysis and licensing, etc.

Question 13. Do all business units need to prepare a business plan and will the plan vary depending on the size of the unit?
Answer: Not necessarily that all business units require a business plan. But the plan size will vary from one unit to another depending on the nature of the enterprise. For example, for a new manufacturer of computer, would definitely need a comprehensive business plan, whilst for an entrepreneur who will be opening a small stationery shop would not need a detailed business plan.

Question 14. What does a Business plan must define?
Answer:  The plan must define the objectives, strategies, customer scenario, market segments, products and services to be offered, sales forecast and steps required to attain the objectives.

Question 15. What does a Business plan must describe?
Answer:  The plan should describe distribution systems, promotional activities and pricing decisions.

III. Short Answer Type Questions  [4 Marks]

Question 1. What are the motivator’s business strength?
Answer: The motivator’s business strength is:

• Retail can be their game or any environment where people are a large part of the equation.
• They do well in any business that involves people, as long as it’s a somewhat non- confrontational environment.
• They can be convincing and avoid most confrontations by creating a strong emotional argument.
• They do well in the toughest of customer service roles, as they are able to see both sides of the argument.

Question 2.Describe the importance of evaluating ideas.
Answer: Idea evaluation is an important step in researching the venture’s feasibility because of the following reasons:

1. Helps in deciding what is important: Idea evaluation forces the entrepreneur to decide what is important to the successful venture, which the entrepreneur is undertaking.
2. Helps to identify strengths and weaknesses of the idea: By evaluating the strengths and weakness of each idea, the entrepreneur identifies and assesses the strong and weak points. By this one gets information which helps to make a better decision.
3. Helps to make the best use of limited resources: It provides an idea about limited resources at disposal. Mostly entrepreneurs have limited resources in the form of money, time, people, etc. They can make sure that their choices make the best use of the available limited resources.
4. Helps to minimize risks while maximizing return:   Every entrepreneur like to have the least uncertainty or risk while getting the return from entrepreneurial decisions and actions. An entrepreneur puts in the effort to evaluate potential of the venture undertaken for maximizing the possible returns.

Question 3.What do you think is the reason for failure of business plan execution?
Or
Why many plans fail?
Answer:  Many plans fail because of the following reasons:

• Companies often fail to deliver as per their promises.
• The strategy followed was wrong.
• Strategies are not executed well.
• The failure to execute the plan.
• Ineffective linkage of strategy, people, and work processes.

Question 4.What is the role of society and family in the growth of an entrepreneur?
Or
Why do you think the role of family in an entrepreneur’s life is important?
Answer: 

1. What family and friends think or opine about entrepreneurship has a crucial role to play.
2. Besides, the view of the family, their support and the society with regard to failure is also a very important factor.
3. Family’s support is very essential as the entrepreneur needs to borrow initial finances from the family and friends.
4. The family’s attitude towards education and other careers in fields like medicine, engineering, etc. are also likely to dominate the youth’s mindset towards entrepreneurship.
5. A prospective bridegroom can also become a deciding factor, promoting or inhibiting entrepreneurship.

Question 5. What challenges do the woman entrepreneurs need to overcome?
Answer: Woman entrepreneurs need to overcome the following challenges:

• Responsibility towards family, society and huge workload.
• Tough resistance from men.
• Women are considered as helpers.
• The attitude of society towards women.
• Constraints in which women have to live and work are not very conducive.

IV.Long Answer Type Questions [6 Marks]

Question 1.What are the main features of Authoritarians?
Answer: Authoritarians:

• are loyal workers who make the world function.
• make their products, service their systems, and always do it right.
• can be an excellent distributor, franchisee or owner of an existing business.
• can do well when they purchase an ongoing operation.
• are detail and tactic-oriented.
• are motivated by doing things one-way-the right way.
• are very conscientious and cooperative, following rules, procedures and policies carefully.
• are cautious, deliberate, logical and analytical.

They are also relaxed, patient and accommodating by nature, and are a great team player who tends to avoid confrontation.

Question 2.Give the main characteristics of Diplomats.
Answer: Diplomats:

• are restless and enjoy working under a certain amount of pressure.
• get things done quickly and work well with deadlines.
• adjust easily to change and deal well with new situations.
• have a high sense of urgency and like variety,
• work at their full capacity
• they do multitask and keep a variety of jobs going at once.

Question 3.Give and explain the misconceptions about great idea.
Answer: The misconceptions about great idea are:

1. Great ideas just appear out of nowhere: It’s not true as the best idea generators tend to do so in a structured systematic way. They don’t wait for the things to happen.
2. There are no illogical ideas: The reality is that, many ideas may not be very good, though to prevent others from feeling that their contribution are not valued; the belief is that, all ideas should be approached as worthy.
3. The customer will tell you what to do if you will only listen: Although customers can help identify unmet needs, they require more involvements in making a great idea workable than simply listening to the customers.
4. We can generate all the ideas we will ever need if we sit down at a meeting: Generating great ideas is not restricted to a meeting but are best shaped through an ongoing dialogue.
5. Great ideas aren’t the problem; implementing them is: The reality is that, problems with implementation arise from not screening carefully enough, the ideas that are generated.

Question 4. Describe the ways to generate ideas.
Or
Describe the various structured approaches adopted to generate ideas.
Or
Explain any four main sources of ideas.
Answer: The different structured approaches adopted to generate ideas are:

1. Environment Scanning: It means the screening of a large amounts of information to detect emerging changes or trends. Information is scanned from news magazines, reviews, government and consumer publications, trade publications, commercials, etc. Lot of effort is put in but in the end it is energy well spent.
2. Creativity and Creative Problem Solving: Creativity is the ability to combine ideas in a unique way or to make unusual associations between the ideas. It involves cross thinking by seeing new angles, connections and approaches. The role of creativity and creative problem solving for generating ideas is that a number of specific creative approaches can be used. For example attribute listing, free association, etc.
3. Brainstorming: Here a group of persons sit together and generate a number of business ideas by innovating alternative ways of meeting the needs and solving problems. A number of ideas are discussed and finally a concrete idea is the end result.
4. Focus Groups: In this way if generating idea the groups of individuals provide information about proposed commodity (good or service) in a structured setting. Here a moderator focuses the group discussion or issues are being examined. Such group can provide an excellent way to generate new ideas and to screen proposed ideas and concepts.
5. Market Research: This is a method of gathering information about products/services that already exist in the market. Demand supply position for a particular product or service is studied in the market and based on it new ideas for products and services are obtained.

Question 5. How is feasibility study important to the entrepreneurs?
Answer: The information gathered and presented in a feasibility study will help entrepreneurs to:

• List in detail all the things they need to make the business work;
• Identify logistical and other business-related problems and solutions;
• Develop marketing strategies to convince a bank or investor that their business is worth considering as an investment; and
• Serve as a solid foundation for developing their business plans.

Even if entrepreneurs have a great business idea they still have to find a cost-effective way to market and sell their products and services.For example, most commercial spaces lease place restrictions on businesses that can have a dramatic impact on income. A lease may limit business hours/days, parking spaces, restrict the product or service that can be offered in some cases, even limit the number of customers a business can receive each day.

Question 6.List the features of feasibility study.
Or
Why are feasibility studies more important?
Answer: Following are the main features of feasibility study:

1. Process: A feasibility study is a process in which an idea is studied to see whether it will work and if going to work then how it will work.
2. Comprehensive: A feasibility study looks at the total structure, needs, requirements, operations of a business, etc.
3. Specific: Feasibility study looks at one issue, i.e. specific task, program, idea, or problem.
4. Pros and cons: A feasibility study looks at both sides, i.e. merits and demerits. It also takes into consideration potential problems.
5. Foundation: A feasibility study serves as a foundation for developing a successful business plan.
6. Essential requirement for loan: Lending financial institution requires the feasibility study considering the proposal for loan by the entrepreneur.

Question 7.Give an outline of a good feasibility study.
Answer:  Following is an outline of a good feasibility study:

• Introduction
• Product or Service
• Technology
• Market Environment
• Competition
• Industry
• Business Model
• Market and Sales Strategy
• Production Operations Requirements
• Management and Personnel Requirements
• Regulations and Environmental Issues
• Critical Risk Factors
• Financial Predictions Including: Balance Sheet, Income Statement, Cash Flow Statement, Break Even Analysis and Capital Requirements
• Conclusion.

Question 8.What purposes are fulfilled by a Business Plan?
Answer: A business plan serves the following purposes:

• Blue print: It provides a blueprint of actions to be taken by the firm in future.
• Guidance: It guides the entrepreneur in raising and mobilising the factors of production.
• Organisation: It serves as a guide to the entrepreneur in organizing and directing the activities of the entrepreneurial venture.
• Progress: It helps in measuring the progress of the venture at various stages.
• Communication: It communicates to investors, lenders, suppliers, etc. initiating the programmes of the business.

Question 9. Give the main elements of a proposed business plan.
Or
Explain in detail the elements of business plan.
Answer: Proposed Business Plan has the following parts:

1. General Introduction
   (a)Name and address of business (c)Stakeholder of business
   (b)Name and address of entrepreneur (d)Nature of business and customers
2. Business Venture
   (a)Product(s) to be offered (b) Service(s) to be offered
   (c)Scale of business operation (d) Type of technology used
   (e)Type of skilled personnel required
3. Organised Plan
   (а)Form of ownership, sole proprietorship, partnership or joint stock company
   (b)Identification of business, associated partners/members, etc.
   (c)Administrative structure
   (d)Identification of management team
4. Production Plan
   (a)Details of manufacturing process (b)Physical infrastructure required
   (c)Types of plant and machinery (d)Raw materials to be used
   (e)Requirement of power, water, etc.
5. Human Resource Plan
   (a)Categories of human resources or staff required
   (b)Human resource already identified
   (c)Human resource required to be procured
   (d)Time frame for procurement of human resource
6. Marketing Plan
   (a)Products and services offered (b)Pricing policies
   (c)Promotional strategies (d)Logistics for distribution
   (e)Channels of distribution
7. Financial Plan
   (a)Breakeven analysis (b)Fixed capital requirements
   (c)Working capital requirement (d) Sources of capital
   (e)Schedule of procurement of capital (f)Schedule of procurement of asset
   (h)Cash flow projection
8. Miscellaneous/Appendix
   (a)Market research report (b)Contract with venders
   (c)Contract with financial institutions (d)Type of business risk
   (e)Contingency plan

NCERT SolutionsPsychologyEntrepreneurshipIndian Economic DevelopmentHumanities

Comparative Development Experience of India with its Neighbours NCERT Solutions for Class 11 Indian Economic Development

Indian Economic DevelopmentRD Sharma SolutionsNCERT Solutions

NCERT TEXTUAL QUESTIONS WITH ANSWERS

Question 1. Mention some examples of regional and economic groupings.
Answer. Every country aims to strengthen its own domestic territory. The nations are forming regional and global economic groupings such as:

1. SAARC. It has 8 countries of South Asia.
2.  EU has 25 independent states based on European Communities.
3.  ASEAN. It has 5 countries of South East Asia.
4.  G-8 (Group of Eight). It has 8 countries.
5.  G-20 (Group of Twenty). It consists of 19 world’s largest economies.

Question 2. What are the various means by which countries are trying to strengthen their own domestic economies?
Answer. Countries are trying to strengthen their own domestic economies by:

1.  forming regional apd global economic groupings like SAARC, EU, ASEAN, G-8, G-20, etc.
2.  By having economic reforms.

Question 3. What similar development strategies have India and Pakistan followed for their respective developmental paths?
Answer. Similar developmental strategies of India and Pakistan are:

1.  India has the largest democracy of the world. Pakistan has authoritarian militarist political power structure.
2.  Both India and Pakistan followed a mixed economy approach. Both countries created a large public sector and planned to raise public expenditure on social development.

Question 4. Explain the Great Leap Forward campaign of China as initiated in 1958.
Answer. Communist China or the People’s Republic of China, as it is formally known, came into being in 1949. There is only one party, i.e., the Communist Party of China that holds the power there. All the sectors of economy including various enterprises and all land owned by individuals was brought under governmental control. A programme called ‘The Great Leap Forward’ was launched in 1958. Its aim was to industrialise the country on a large scale and in as short a time as possible. For this, people were eyeji encouraged to set up industries in their backyards. In villages, village Communes or cooperatives were set up. Communes means collective cultivation of land. Around 26000 communes covered almost all the farm population in 1958.
The Great Leap Forward programme faced many problems. These were:

1.  In the earlier phase, a severe drought occurred in China and it killed some 3 crore people.
2.  Soviet Russia was a comrade to communist China, but they had border dispute. As a result, Russia withdrew its professionals who had been helping China in its industrialisation bid.

Question 5. China’s rapid industrial growth can be traced back to its reforms in 1978. Do you agree? Elucidate.
Answer. Starting 1978, several reforms were introduced in phases in China. First, agriculture, foreign trade and investment sectors were taken up. Commune lands were divided into small plots. These were allotted to individual households for cultivation.
The reforms were expanded to industrial sector. Private firms were allowed to set up manufacturing units. Also, local collectives or cooperatives could produce goods. This meant competition between the newly sanctioned private sector and the old state-owned enterprises.
This kind of reform in China brought in the necessity of dual pricing. This meant the farmers and industrial units were to buy and sell fixed quantities of raw material and products on the basis of prices fixed by the government. As production increased, the material transacted through the open market also rose in quantity. Special Economic Zones (SEZs) were set up in China to attract foreign investors.

Question 6. Describe the path of developmental initiatives taken by Pakistan for its economic development.
Answer. The developmental initiatives taken by Pakistan were:

1.  In the late 1950s and 1960s, Pakistan introduced a variety of regulated policy framework (for import substitution industrialisation). The policy combined tariff protection for manufacturing of consumer goods together with direct import controls on competing imports.
2.  The introduction of Green Revolutioned led to mechanisation of agriculture. It finally led to a rise in the production of foodgrains. This changed the agrarian structure dramatically.
3.  In the 1970s, nationalisation of capital good industries took place.
4. In 1988, structural reforms were introduced. The thrust areas were denationalisation and en¬couragement to private sector.
5.  Pakistan received financial support from western nations and remittances from emigrants to the Middle East. It helped in raising economic growth of the country.

Question 7. What is the important implication of ‘one child norm’ in China?
Answer. One-child norm introduced in China in the late 1970s is the major reason for low population growth. It is stated that this measure led to a decline in the sex ratio, that is, the proportion of females per 1000 males.

Question 8. Mention the salient demographic indicators of China, Pakistan and India.
Answer. We shall compare some demographic indicators of India, China and Pakistan.

1. The population of Pakistan is very small and accounts for roughly about one-tenth of China or India.
2.  Though China is the largest nation geographically among the three, its density is the lowest.
3.  The population growth is highest in Pakistan followed by India and China. One-child norm introduced in China in the late 1970s is the major reason for low population growth. They also state that this measure led to a decline in the sex ratio, that is, the proportion of females per 1000 males.
4.  The sex ratio is low and biased against females in all the three countries. There is strong son- preference prevailing in 11 these countries.
5.  The fertility rate is low in China and very high in Pakistan.
6. Urbanisation is high in both Pakistan and China with India having 28 per cent of its people living in urban areas.

Question 9. Compare and contrast India and China’s sectoral contribution towards GDP. What does it in¬dicate?
Answer. Sectoral Distribution of Output and Employment:

1.  Agriculture Sector. China has more proportion of urban people than India. In China in the year 2009, with 54 per cent of its workforce engaged in agriculture, its contribution to GDP is 10 per cent. In India’s contribution of agriculture to GDP is at 17 per cent.
2.  Industry and Service Sectors. In both India and China, the industry and service sectors have less proportion of workforce but contribute more in terms of output. In China, manufacturing contributes the highest to GDP at 46 per cent whereas in India it is the service sector which contributes the highest. Thus, China’s growth is mainly contributed by the manufacturing sector and India’s growth by service sector.

Question 10. Mention the various indicators of human development.
Answer. Parameters of human development are:

1.  HDI— (a) Value—higher the better.
   (b) Rank—lower the better.
2.  Life expectancy—higher the better.
3. Adult literacy rate—higher the better.
4.  GDP per capita (PPP US $)—higher the better –
5.  Percentage of population below poverty line (on $1 a day)—lower the better.
6. Infant mortality rate (per 1000 live births)—lower the better.
7.  Maternal mortality rate (per 100,000 live births)—lower the better.
8.  Percentage of population having access to improved sanitation—higher the better.
9.  Percentage of population having access to improved water source—higher the better.
10.  Percentage of population which is undernourished (% of total) – lower the better.

Question 11. Define the liberty indicator. Give some examples of liberty indicators.
Answer. Liberty indicator has actually been added as a measure of ‘the extent of democratic participation
in social and political decision-making’ but it has not been given any extra weight. Some of the
examples of liberty indicators are : literacy rate, women participation in politics, etc.

Question 12. Evaluate the various factors that led to the rapid growth in economic development in China.
Answer. Reforms were initiated jn China in 1978. China did not have any compulsion to introduce reforms.
1. Pre-Reform Period : Failures
(a) There was slow pace of growth and lack of modernisation in the Chinese economy under the Maoist rule.
(b) It was felt that Maoist vision of economic development which was based on decentralisation, self-sufficiency and shunning of foreign technology, goods and capital, had failed.
(c) Despite extensive land reforms, collectivisation, the Great Leap Forward and other initiatives, the per capita grain output in 1978 was the same as it was in the mid-1950s.
Pre-Reform Period: Success
(a) There was existence of infrastructure in the areas of education and health.
(b) There were land reform.
(c) There was decentralised planning and existence of small enterprises.
(d) There was extension of basic health services in rural areas.
(e) Through the commune system, there was more equitable distribution of foodgrains.
2. Post-Reform Period (after 1978): Success
(a) In agriculture, by handing over plots of land to individuals for cultivation, it brought prosperity to a vast number of poor people.
(b) It created conditions for the subsequent phenomenal growth in rural industries and built up a strong support base for more reforms.
(c) More reforms included the gradual liberalisation of prices, fiscal decentralisation, increased autonomy for state owned enterprises (SOEs), the introduction of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment.
(d) The restructuring of the economy and resulting efficiency gains have contributed to a more than ten-fold increase in GDP since 1978. Measured on a Purchasing Power Parity (PPP) basis, China in 2005 stood as the second largest economy in the world after the US.
(e) China’s economic growth as measured in terms of GDP on an average is 10.9% per year. In economic size, China is surpassed today only by the US, Japan, Germany and France.
(f) If its present growth trend continues, China is likely to be the world’s largest economic power by any measure by the year 2025.
Comparative Development Experience of India with its Neighbours 11 .IS
(g) China had success when it enforced one-child norm in 1979. The low population growth of China can be attributed to this one factor.
Thus, China’s structural reforms introduced in 1978 in a phased manner offer various lessons from its success story.

Question 13. Group the following features pertaining to the economies of India, China and Pakistan under three heads.

1. One-child norm
2. Low fertility rate
3. High degree of urbanisation
4. Mixed economy
5. Very high fertility rate
6. Large population
7. High density of population
8. Growth due to inanufacturing sector
9. Growth due to service sector

Answer.

1. China
2. China
3.  Pakistan and China
4.  India and Pakistan
5. Pakistan
6.  India and China
7.  India
8.  China
9.  India.

Question 14. Give reasons for the slow growth and re-emergence of poverty in Pakistan.
Answer. Reforms were initiated in Pakistan in 1988.
1. Pre-Reform Period : Failure
(a) The proportion of poor in 1960s was more than 40 per cent.
(b) The economy started to stagnate, suffering from the drop in remittances from the Middle East.
(c) A growth rate of over 5% in the 1980s could not be sustained and the budget deficit increased steadily.
(d) At times foreign exchange reserves were as low as 2 weeks of imports.
2. Post-Reform Period (after 1988): Failure
The reform process led to worsening of all the economic indicators.
(a) The growth rate of GDP and its sectoral constituents have fallen in the 1990s.
(b) The proportion of poor declined to 25 per cent in 1980s and started rising again in 1990s. The reasons for the slow-down of growth and re-emergence of poverty in Pakistan’s economy are:
(i) Agricultural growth and food supply situation were based not on an institutionalised process of technical change but on good harvest. When there was a good harvest, the economy was in a good condition; when it was not, the economic indicators showed stagnation or negative trends.
(ii) Fall in foreign exchange earnings coming from remittances from Pakistani workers in the Middle East and the exports of highly volatile agricultural products.
(iii) There was also growing dependence on foreign loans on the one hand and increasing difficulty in paying back the loans on the other.

Question 15. Compare and contrast the development of India, China and Pakistan with respect to some
salient human development indicators.
Answer. It is clear that:

1. China is moving ahead of India .and Pakistan. This is true for many indicators—income indicator such as GDP per capita, or proportion of population below poverty line or health indicators such as mortality rates, access to sanitation, literacy, life expectancy or malnourishment.
2. Pakistan is ahead of India in reducing proportion of people below the poverty line and also its performance in education, sanitation and access to water is better than that of India. Both China and Pakistan are in similar position with respect to the proportion of people below the international poverty rate of $1 a day, whereas the proportion is almost two times higher for India.
3. In China, for one lakh births, only 38 women die whereas in India it is 230 and in Pakistan it is 260.
4. India and Pakistan are ahead of China in providing improved water sources.

Question 16. Comment on the growth rate trends witnessed in China and India in the last two decades.
Answer. Growth of Gross Domestic Product (%), 1980-2009 In 1980s, China had remarkable growth rate of 10.3% when India was finding it difficult to maintain a growth rate of even 5%. After two decades, there was a marginal improvement in India’s and China’s growth rate.

Question 17. Fill in the blanks:

1.  First Five Year Plan of commenced in the year 1956. (Pakistan/China)
2.  Maternal mortality rate is high iri (China/Pakistan)
3. Proportion of people below poverty line is more in (India/Pakistan)
4.  Reforms in were introduced in 1978. (China/Pakistan).

Answer. (1) Pakistan, (2) Pakistan, (3) India, (4) China.

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Liberalisation, Privatisation and GlobalisationAn Appraisal NCERT Solutions for Class 11 Indian Economic Development

NCERT TEXTUAL QUESTIONS WITH ANSWERS

Question 1. Why were reforms introduced in India?
Answer. In 1991, economic reforms were introduced in India because 1991 was the year of crisis for the Indian economy. It is clear from the following facts:
(a) National income was growing at the rate of 0.8%.
(b) Inflation reached the height of 16.8%.
(c) Balance of payment crisis was to the extent of 10,000 crores.
(a) India was highly indebted country. It was paying 30,000 crores interest charges per year.
(e) Foreign exchanges reserves were only 1.8 billion dollars which were sufficient for three weeks.
(f) India sold large amount of gold to Bank of England.
(g) India applied for the loan from World Bank and IMF to the extent of 7 billion dollars.
(h) Fiscal deficit was more than 7.5%.
(i) Deficit financing was around 3%.
(j) Trade relation with Soviet block had broken down.
(k) Remmittances from non-residence Indians stopped due to war in Arab countries.
(l) Price of petroleum products was very high.

Question 2. How many countries are members of the WTO?
Answer. At present there are 149 countries which are members of WTO.

Question 3. What is the most important function of RBI?
Answer. There was a substantial shift in role of the RBI from ‘a regulator’ to ‘a facilitator’ of the financial sector. Earlier as a regulator, the RBI would itself fix interest rate structure for the commercial banks. After liberalisation in 1991, RBI as a facilitator would only facilitate free play of the market forces and leave it to the commercial banks to decide their interest rate structure. Thus, with liberalisation competition prevails rather than controls.

Question 4. How was RBI controlling the commercial banks?
Answer. Prior to 1991, banking institutions were subject to too much control by the RBI through high bank rate, high cash reserve ratio and statutory liquidity ratio.
Financial sector includes:
(a) banking and non-banking financial’institutions,
(b) stock exchange market, and
(c) foreign exchange market.
In India, financial sector is regulated and controlled by the RBI (Reserve Bank of India).
There was a substantial shift in role of the RBI from ‘a regulator’ to ‘a facilitator’ of the financial sector. Earlier as a regulator, the RBI would itself fix interest rate structure for the commercial banks. After liberalisation in 1991, RBI as a facilitator would only facilitate free play of the market forces and leave it to the commercial banks to decide their interest rate structure.

Question 5. What do you understand by devaluation of rupee?
Answer. Devaluation refers to lowering in the official value of a currrency with respect to gold or foreign currency. It results in costlier imports and cheaper exports.

Question 6. Distinguish between the following:
(i) Strategic and Minority sale
Answer. Government has been disinvesting by many methods. Two main methods are:
(a) Minority sale. In this method, equity is offered to investors through domestic public issue.
(b) Strategic sale. In this method, government offloads above 51 per cent in strategic sale.
(ii) Bilateral and Multi-lateral trade
Answer. Trade agreements involving more than two countries are referred to as multilateral trade agreements.
Trade agreements involving two countries are referred to as bilateral trade agreements.
(iii) Tariff and Non-tariff barriers
Answer. Tariff Barriers. Tariff barriers are imposed on imports to make them relatively costly as a measure to protect domestic production.
Non-Tariff Barriers. They are imposed on the amount of imports and exports.

Question 7. Why are tariffs imposed?
Answer. Tariffs are imposed on imports to make them relatively expensive. This will protect domestically produced goods.

Question 8. What is the meaning of quantitative restrictions?
Answer. Quantitative restrictions refers to non-tariff barriers imposed on the amount of imports and exports.

Question 9. Those public sector undertakings which are making profits should be privatised. Do you agree with this view? Why?
Answer. No, if profit making PSUs are privatised then there will be only loss making PSUs left. Government
needs the profit of the profit.making PSUs to modernise them, to make them, more competitive and more efficient.

Question 10. Do you think outsourcing is good for India? Why are developed countries opposing it?
Answer. Outsourcing is good for India because it provides employment to large number of unemployed Indians. Developed countries oppose it because :
(a) They-are not sure about the sincerity of Indian workers.
(b) It will narrow down the income disparity between the two countries.

Question 11. India has certain advantages which makes it a favourite outsourcing destination. What are these advantages?
Answer. India is a favourite outsourcing destination. The advantages that India has are:
(a) India can provide a ready supply of skilled people at relatively lower price.
(b) India has the advantage of time difference as it is located on the other side of the developed countries.

Question 12. Do you think the navratna pdlicy of the government helps in improving the performance of public sector undertakings in India? How?
Answer. The government has decided to give special treatment to some of the important profit making PSUs and they were given the status of navratnas. These navratnas were granted financial and operational autonomy in the working of the companies. These navratnas are:
1. Indian Oil Corporation Ltd. (IOCL)
2. Bharat Petroleum Corporation Ltd. (BPCL)
3. Hindustan Petroleum Corporation Ltd. (HPCL)
4. Oil and Natural Gas Corporation Ltd (ONGC)
5. Steel Authority of India Ltd. (SAIL)
6. Indian Petrochemicals Corporation Ltd. (IPCL)
7. Bharat Heavy Electricals Ltd. (BHEL) –
8. National Thermal Power Corporation (NTPC)
9. Mahanagar Telephone Nigam Limited (MTNL)
10. Gas Authority of India Limited (GAIL)
11. Videsh Sanchar Nigam Limited (VSNL)
The granting of navratna status resulted in better performance of these. companies. The ‘ government partly privatised these companies through disinvestment.

Question 13. What are the major factors responsible for the high growth of the service sector?
Answer. There has been high growth of the service sector in India. There is too much demand for services because :
(a) It is more profitable to contract services from developing countries.
(b) There is easy availability of skilled manpower at lower wage rate.

Question 14. Agriculture sector appears to be adversely affected by the reform process. Why?
Answer. There has been deceleration in agricultural growth. This deceleration is the root cause of the problem of rural distress that reached crisis in some parts of the country. Farmers find themselves into crippling debt due to low farm incomes combined with low prices of output and lack of credit at reasonable prices. This has led to widespread distress migration.
Economic reforms have not been able to benefit the agricultural sector because:
(a) Liberalisation has forced the small farmers to compete in a global market where prices of goods have fallen while removal of subsidies has led to increase in the cost of production. It has made farming more expensive.
(b) Various policy changes like reduction in import duties on agricultural products, removal of minimum support price and lifting of quantitative restrictions have increased the threat of international competition to the Indian farmers.
(c) The export-oriented growth has favoured increased production of cash crops rather than food grains. This has increased the prices of food grains.
(d) Public investment in agriculture sector especially in infrastructure which includes irrigation, power, roads, market linkages and research has been reduced in the reform period.

Question 15. Why has the industrial sector performed poorly in the reform period?
Answer. The post-reform period shows that industrial growth has slowed down. This was due to:
(a) Globalisation created conditions for free movement of goods and services from foreign countries. It adversely affected the local industries and employment in developing countries.
(b) Globalisation led to decrease in demand for domestic industrial products due to cheaper imports.
(c) There was inadequate investment in infrastructural facilities such as power supply.
(d) A development country like India still does not have the access to markets of developed countries due to high non-tariff barriers.

Question 16. Discuss economic reforms in India in the light of social justice and welfare.
Answer. Economic reforms have been criticised on the following grounds:
(a) Privatisation encourages growth-ofunonopoly power in the hands of big business houses. It results in greater inequalities of income and wealth.
(b) Globalisation has devastated local producers since they are unable to compete with cheap imports.
(c) Economic reforms have led to mounting workers unrest. Workers have protested against low wages, poor working conditions, autocratic management rule, long work days and fall in social benefits.
(d) These have made public employees worse off. Public employees are adversely effected by budget cuts, privatisation and massive loss of purchasing power.
(e) Small business class is adversely affected by fall of public subsidies, de-industrialisation and floods of cheap imports.
(f) During the globalisation phase, about half a billion people in South Asia have experienced a decline in their income. Data shows that it is the poor who have suffered most.
(g) Since the government is unable to help the victims of globalisation, the provisions of social safety net have been weakened.
(h) The global village appears deeply divided between the street of the haves and those of the havenots. The average person in Norway (which has highest human development) and the average person in countries such as Niger (which has lowest human development) certainly live in different human development districts of the global village.

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