Entrepreneurial Opportunity — Entrepreneurship STD 12 Commerce — Question

Subhiksha
Subhiksha was founded in 1997 by R Subramanian, IIT-IIM graduate. It operated over 1600 outlets selling groceries, fruits, vegetables, medicines and mobile phones and positioned itself as value retail chain. It adopted strategy to cut price, focus on lower and upper middle class and opened shops near catchment area of customers. It started with one store in Chennai and within a short span the count reached to 1600 outlets (2008).
Why did Subhiksha super market fail?

1. Rapid store expansion in various formats like groceries, medicines, mobiles, electronics, consumer durables and IT without sufficient fund in hand.
2. Operated on very slim or zero margins resulting in higher cash outflows whereas inflows were almost nil.
3. Not much attention to customers service resulted in bad quality service at store level.
4. Downstream supply chain was not integrated resulting in lower fill rates and customer dissatisfaction.
5. Expanded business through debt (7500 million debt).
6. In October, 2008 the company did not have enough funds to manage its operations.
7. Poor inventory management resulted in defective inventory, breakages, lower fill days and pile up inventory.

1. What were the main reasons for 'Subhiksha's failure? Enumerate the ones given in the chapter.

Quote the lines from the passage which are indicative of the given reasons.

2. Was 'location' one of the factors responsible for 'Subhiksha's failure?
3. What additional factor, other than those discussed in the chapter, was responsible for Subhiksha's failure?

Write a short note on operational budget.

Answer each of these questions in about one hundred and fifty words:
Write down the sectors of organized and un–organized market?

Write down the formula for calculating the weighted average contribution margin per unit for the sales mix.

Write short note on discipline in dealing with competitors.

Why is direct selling preferred for a monopolistic market?

Answer each of these questions in about fifty words:
Differentiate between consolidation and merger.

Aditya Bearings Ltd. are the manufacturers and suppliers of ball bearings to fan manufacturing companies. The company requires 900kg. of wrought iron for its production process. The cost of placing each order is ₹ 50 and carrying cost is ₹ 100. Calculate Economic Order Quantity.

Answer each of these questions in about fifty words:
For what purpose is finance required right from the very beginning i.e. conceiving an idea?

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.