Question
What do you mean by acquisition? Give some examples.
✓
Answer
Acquisition is a more general term, enveloping in itself a range of acquisition transactions. It could be leading to takeover of a company. Acquisition refers a corporate action in which a company buys almost, the target company's ownership stakes in order to assume control of the target firm. It is often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations. It is often paid in cash, it could be the acquisition of company's stock, tangible assets, intangible assets, rights, acquisition of control, and other kinds of obligations. It is also known as a takeover, means the buying company takeover or acquire by another.
For Examples: Bharti Airtel acquired Zain Africa, February 2010
For Examples: Bharti Airtel acquired Zain Africa, February 2010
- Bharti Airtel is the largest mobile network in India. It is also expanding its reaches throughout the globe. Bharti Airtel added 180 million new customers in its list by acquiring an African Mobile Network provider called Zain Africa.
- Tata Steel acquired 100% stake in Corus Group on January 30, 2007. It was an all cash deal which cumulatively amounted to ₹ 12.2 billion.
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It's Natural. It's Yummy: It's Natural Ice-cream
It's natural. It's yummy. Those who have tasted it, swear by it. The unique feature of the ice-creams manufactured by Natural Ice-cream is that, they contain no artificial flavours, preservatives or stabilisers, only fresh fruit pulp or dry fruits.
Started as a 300 sq ft ice-cream parlour at Juhu, a North-West Mumbai suburb, in 1984, the brand is a runaway success. It now has 89 franchise outlets across West and South India: 47 in Mumbai, 29 in the neighbouring urban clusters of Navi Mumbai, Thane and Pune and the rest scattered across selected cities of Maharashtra and neighbouring states. Ten more will be opened in the current financial year. Natural's revenues have risen from 14 lakh in 1986 to 40 crore in 2010-11. The franchises may be many, but the manufacturing hub is just one, located in another Mumbai suburb, Kandivali. Every morning, a fleet of trucks rolls out from the factory carrying the ice-cream to all the Natural outlets, thus ensuring quality is not compromised.
The store at Juhu has been renovated and expanded repeatedly and is now more than 3 times its original size. 'It is a landmark in the area', says a beaming Kamath. It all began after Kamath broke away from his elder brother's ice-cream business, Gokul Ice-cream, in 1983. 'I took my share of the inheritance and set-up Natural', says Kamath. From the start, he was at enormous pains to keep to quality, a trait he maintains to this day. Seasonal fruits are bought in bulk daily from the market, with only the best quality ones being chosen. The extracted pulp is heated, to get rid of unwanted bacteria and then stored in aluminium sealed packages.
Kamath, who from the start involved himself in every aspect of manufacture and distribution, says, he has experimented with 60 different kinds of fruit. (In case of non-seasonal fruits, however, Kamath has no choice but to buy pulp and get it machine processed).
The means, Natural uses to enforce quality control, however, impose their own limits on the brand's expansion. All the temperature control in the world cannot preserve the taste and more importantly, the freshness of ice-cream beyond a specified number of hours, during which Natural's trucks can cover only a finite distance. This explains why Natural's outlets are largely in Western India and it has no outlet yet in the national capital, despite the obvious business opportunity Delhi presents. "The National Capital Region has remained an elusive destination', admits Pai.
But the scenario may soon change. Though, Natural officials are reluctant to share details of their financial relationship with the franchises, they do reveal that plans are a foot for a major change in operational strategy. The man responsible is Kamath's son, Srinivas, who was inducted into the business in 2009. Srinivas, 27, believes that since it is dealing in perishable products such as ice-cream, Natural has to set-up manufacturing units in other locations, if it wants to keep expanding.
Srinivas wants to set-up 'mega shops' in far away cities and towns, which will both manufacture natural Ice-creams and sell it. 'Raw materials will be supplied from here, as well as trained workers who will make the ice-cream at the mega shops', says Srinivas. 'Frozen, non-perishable fruit pulp and processed milk can be stored for a maximum of 4 days without harm. That is enough time to transport them to wherever the mega shops are opened.
Again, in a change of strategy, Natural intends to open only one shop in these far away areas. 'Instead of investing in multiple franchises, Natural will have just one mega shop per town', Srinivas adds. Natural will also impose its conditions: the outlet must have atleast 2000 sq ft floor space and must be located in a central area. The first such outlet is set to open shortly in Chandigarh, depending on its success, more such shops will follow.
Natural is in no hurry to get to Delhi, but it has big plans when it does. Delhi is very big market. To meet its demand, we'll have to double our existing capacity', says Pai. Natural's ambitions go even further. 'Our founder wants Delhi to be the launch pad for Natural's global ventures, especially in West Asia', he adds.
It's natural. It's yummy. Those who have tasted it, swear by it. The unique feature of the ice-creams manufactured by Natural Ice-cream is that, they contain no artificial flavours, preservatives or stabilisers, only fresh fruit pulp or dry fruits.
Started as a 300 sq ft ice-cream parlour at Juhu, a North-West Mumbai suburb, in 1984, the brand is a runaway success. It now has 89 franchise outlets across West and South India: 47 in Mumbai, 29 in the neighbouring urban clusters of Navi Mumbai, Thane and Pune and the rest scattered across selected cities of Maharashtra and neighbouring states. Ten more will be opened in the current financial year. Natural's revenues have risen from 14 lakh in 1986 to 40 crore in 2010-11. The franchises may be many, but the manufacturing hub is just one, located in another Mumbai suburb, Kandivali. Every morning, a fleet of trucks rolls out from the factory carrying the ice-cream to all the Natural outlets, thus ensuring quality is not compromised.
The store at Juhu has been renovated and expanded repeatedly and is now more than 3 times its original size. 'It is a landmark in the area', says a beaming Kamath. It all began after Kamath broke away from his elder brother's ice-cream business, Gokul Ice-cream, in 1983. 'I took my share of the inheritance and set-up Natural', says Kamath. From the start, he was at enormous pains to keep to quality, a trait he maintains to this day. Seasonal fruits are bought in bulk daily from the market, with only the best quality ones being chosen. The extracted pulp is heated, to get rid of unwanted bacteria and then stored in aluminium sealed packages.
Kamath, who from the start involved himself in every aspect of manufacture and distribution, says, he has experimented with 60 different kinds of fruit. (In case of non-seasonal fruits, however, Kamath has no choice but to buy pulp and get it machine processed).
The means, Natural uses to enforce quality control, however, impose their own limits on the brand's expansion. All the temperature control in the world cannot preserve the taste and more importantly, the freshness of ice-cream beyond a specified number of hours, during which Natural's trucks can cover only a finite distance. This explains why Natural's outlets are largely in Western India and it has no outlet yet in the national capital, despite the obvious business opportunity Delhi presents. "The National Capital Region has remained an elusive destination', admits Pai.
But the scenario may soon change. Though, Natural officials are reluctant to share details of their financial relationship with the franchises, they do reveal that plans are a foot for a major change in operational strategy. The man responsible is Kamath's son, Srinivas, who was inducted into the business in 2009. Srinivas, 27, believes that since it is dealing in perishable products such as ice-cream, Natural has to set-up manufacturing units in other locations, if it wants to keep expanding.
Srinivas wants to set-up 'mega shops' in far away cities and towns, which will both manufacture natural Ice-creams and sell it. 'Raw materials will be supplied from here, as well as trained workers who will make the ice-cream at the mega shops', says Srinivas. 'Frozen, non-perishable fruit pulp and processed milk can be stored for a maximum of 4 days without harm. That is enough time to transport them to wherever the mega shops are opened.
Again, in a change of strategy, Natural intends to open only one shop in these far away areas. 'Instead of investing in multiple franchises, Natural will have just one mega shop per town', Srinivas adds. Natural will also impose its conditions: the outlet must have atleast 2000 sq ft floor space and must be located in a central area. The first such outlet is set to open shortly in Chandigarh, depending on its success, more such shops will follow.
Natural is in no hurry to get to Delhi, but it has big plans when it does. Delhi is very big market. To meet its demand, we'll have to double our existing capacity', says Pai. Natural's ambitions go even further. 'Our founder wants Delhi to be the launch pad for Natural's global ventures, especially in West Asia', he adds.
- Why has quality control became a deterrent to Natural's expansion plans?
- How do they plan to overcome the above deterrent?
- What are their future plans?
- 'Instead of investing in multiple franchises, Natural will have just one mega shop per town,' says Srinivas. What do you understand by multiple franchises?
Vikas is a young entrepreneur who runs his restaurant business. In his second year of operation, he observes that there is a downtrend in sales and his cash flows are not enough to meet his cash expenses. His chartered accountant told him that these are the first symptoms of business failure. Vikas was worried and conducted a detailed study of the financial statements. Give any one symptom as disclosed by balance sheet which should be a cause of concern for Vikas.
You plan to establish a small scale enterprise. What are the types of utilities you would need for the smooth running of your enterprise?
"An enterprise that does not grow will, enventually die." Explain this statement with suitable examples.
Read the extract below:
As the world is drowned in the rubble of plastic it has become a now or never situation to protect the world. Indian entrepreneurs, Mrs. and Mr. Smith launched ‘Green India’ in 2021 with the aim to provide a simple replacement for harmful plastic with bamboo-based products.
Using technology for processing of the bamboo plant, the brand has developed around 22 products, with manufacturing around 30 lakh Bamboo toothbrushes which have been delivered across India and 18 countries in the world. “India is the second-largest bamboo grower in the world and also one of the biggest bamboo importers. It made me think about how we are underutilising our bamboo resources,” comments Mr. Smith. This agripreneur has since engaged 4,000 farmers from villages of Nanded in Maharashtra to manufacture products.
After completing his masters degree from the University of Maharashtra, he joined the IT industry in France. It was there that the idea of starting a sustainable business struck him. He was supported by his wife who helps with human resources and accounts. He gives credit to social media platforms for the boost to sales and growing popularity of eco-friendly products.
Green India is now looking to add another 1,000 families to completely depend on their products. Their major aim is to reduce 1 million kilogram of plastic waste every year from next year onwards.
On the basis of the given text and common understanding, answer the following questions:
(I) Identify the idea field used by Mr. Smith to launch the business.
(II) Explain any two more idea fields, other than the one identified above.
(III) Giving reasons, mention any two socio-economic benefits that the above business has.
As the world is drowned in the rubble of plastic it has become a now or never situation to protect the world. Indian entrepreneurs, Mrs. and Mr. Smith launched ‘Green India’ in 2021 with the aim to provide a simple replacement for harmful plastic with bamboo-based products.
Using technology for processing of the bamboo plant, the brand has developed around 22 products, with manufacturing around 30 lakh Bamboo toothbrushes which have been delivered across India and 18 countries in the world. “India is the second-largest bamboo grower in the world and also one of the biggest bamboo importers. It made me think about how we are underutilising our bamboo resources,” comments Mr. Smith. This agripreneur has since engaged 4,000 farmers from villages of Nanded in Maharashtra to manufacture products.
After completing his masters degree from the University of Maharashtra, he joined the IT industry in France. It was there that the idea of starting a sustainable business struck him. He was supported by his wife who helps with human resources and accounts. He gives credit to social media platforms for the boost to sales and growing popularity of eco-friendly products.
Green India is now looking to add another 1,000 families to completely depend on their products. Their major aim is to reduce 1 million kilogram of plastic waste every year from next year onwards.
On the basis of the given text and common understanding, answer the following questions:
(I) Identify the idea field used by Mr. Smith to launch the business.
(II) Explain any two more idea fields, other than the one identified above.
(III) Giving reasons, mention any two socio-economic benefits that the above business has.
Hari is an entrepreneur who wants to start an amusement park in Indore. He knows that he needs a huge amount of initial capital. According to you, which of the financial institution will be more suitable to him? Suggest and explain why?