BB0028 – Entrepreneurship Development

Feb drive 2011

Bachelor of Business Administration-BBA Semester 6

BB0028 – Entrepreneurship Development

Subject code – BB0028

Q.1 Write a note on Entrepreneurial Functions.

Ans Entrepreneurial Functions: Functions are as follow:-

Broadly, entrepreneurs have two vital roles to play in the economy (1) to introduce new ideas and (2) to energise business processes. Strictly speaking, the term entrepreneur, which derives from the French words entre (between) andprendre (to take), referred to someone who acted as an intermediary in undertaking to do something. The term was originally used to describe the activities of what today we might call an impresario, a promoter or a deal maker. The entrepreneur first made an appearance as a distinct economic concept in France, twenty years before the ‘father’ of economics, Adam Smith published his Wealth of Nations in 1776. Richard Cantillon, an Irishman living in France, suggested in 1756 that the entrepreneur was someone prepared to bear uncertainty in engaging in risky arbitrage buying goods and services at a certain (fixed) price in one market to be sold elsewhere or at another time for uncertainfuture prices, usually in other market (though, throughout economic history, hoarders or traders who try to ‘corner’ a market have sought super-profits in the same markets when short supplies send prices rocketing upwards). This concept of entrepreneur as arbitrager is still relevant today but was clearly influenced by the dominance at that time of trade as the chief means for accumulating new wealth and capital. Manufacturing and trade dominated Britain's heyday in Victorian times whereas today, as the case studies show, it is technology, knowledge and services that provide most, though by no means all, new entrepreneurial opportunities. In other words, entrepreneurship exists in its context as Figure 1.

Figure 1: Business competition chain

Here, the role of the entrepreneur is to conceive a business idea in terms of an innovation to be brought successfully to the market and to find the wherewithal to make this happen. The entrepreneur does not necessarily need to have the design, production or delivery skills (this is the function of the firm) nor to shoulder all or most of the risk (this is often assumed by the providers of finance or investors). Indeed, the notion of the entrepreneur as a risk-taking trader, began to be challenged early on by the view of the entrepreneur as an adventurous self-employed manager capable of combining, to personal advantage, capital and labour. It is interesting to note that in France today the entrepreneur is a more generic term mainly referring to small property developers and owners of small construction firms. It would be wrong to state that the element of risk-bearing has completely disappeared from the modern concept of the entrepreneur. The successful management of risk is an important entrepreneurial attribute. However, it does seem true that a swift perception of opportunities and the ability to coordinate the activities of others emerge as the more central economic skills of the modern entrepreneur.

Austrian economist Joseph Schumpeter (1934), who has had a seminal influence on entrepreneurship, as well as innovation, placed the entrepreneur at the centre of his theory of economic development. Schumpeter defined the entrepreneur simply as someone who acts as an agent of change by bringing into existence a ‘new combination of the means of production’. New combinations include process, product and organisational innovations. The means of production includes capital, equipment, premises, raw materials, labour and, in recent times, information. Currently, knowledge has been added to the list as the indispensable ingredient for business success in the new millennium.

Q.2 Discuss Project Appraisal.

Project appraisal is a generic term that refers to the process of assessing, in a structured way, the case for proceeding with a project or proposal. In short, project appraisal is the effort of calculating a project's viability.It often involves comparing various options, using economic appraisal or some other decision analysis technique.

Process:-

• Initial Assessment
• Define problem and long-list
• Consult and short-list
• Develop options
• Compare and select Project

Types of appraisal:-

• technical appraisal
• project appraisal
• commercial and marketing appraisal
• Financial?economic appraisal
• organisational or management appraisal

1.       Cost-benefit analysis

• Economic appraisal[7]

                              1.Cost-effectiveness analysis

                               2.Scoring and weighting

Project appraisal is the process of assessing and questioning proposals before resources are committed. It is an essential tool for effective action in community renewal.  It’s a means by which partnerships can choose the best projects to help them achieve what they want for their community.   

But appraisal has been a source of confusion and difficulty for projects in the past.  Audits of the operation of Single Project Budget schemes have highlighted concerns about the design and operation of project appraisal systems, including:

•Mechanistic, inflexible systems

•A lack of independence and objectivity

•A lack of clear definition of the stages of appraisal and of responsibility for these stages

•A lack of documentary evidence after carrying out the appraisal

   It’s no surprise that audits or inspections aren’t impressed with the quality of appraisals, and         are specifically found with problems like;

•Individual appraisals which do not cover the necessary information or provide only a    superficial analysis of the project

•Particular problems in dealing with risks, options and value for money

•Appraisals which are considered too onerous/burdensome for smaller projects

•Rushed appraisals

Project appraisal is a requirement before funding of programs is done.  But tackling problems like those outlined above is about more than getting the systems right on paper.  Experience in projects emphasizes the importance of developing an ‘appraisal culture’ which involves developing the right system for local circumstances and ensuring that everyone involved recognizes the value of project appraisal and has the knowledge and skills necessary to play their part in it.

Checklist for project appraisal:-

Whether you are involved in a partnership with an appraisal system in place, or starting to design one from scratch, these questions are worth asking.

•Are appraisals systematic and disciplined with a clear sequence of activities and operating rules?

•Is there an independent assessment of the project by someone who has not been involved with the development of the project?

•Does the appraisal process culminate in clear recommendations that inform approval (or rejection) of the project?

•Is the approval stage clearly separate?

•Is the appraisal process well documented, with key documents signed, showing ownership and agreement, and allowing the appraisal documentation to act as a basis for future management, monitoring and evaluation?

•Does the appraisal system comply with any relevant government guidance

•Are the right people involved at various stages of the process and, if necessary, how can you widen involvement? 

Q.3  What are the factors that determine the capital structure?

Ans : Factors Determining Capital Structure:-

1.Trading on Equity-

The word “equity” denotes the ownership of the company. Trading on equity means taking advantage of equity share capital to borrowed funds on reasonable basis. It refers to additional profits that equity shareholders earn because of issuance of debentures and preference shares. It is based on the thought that if the rate of dividend on preference capital and the rate of interest on borrowed capital is lower than the general rate of company’s earnings, equity shareholders are at advantage which means a company should go for a judicious blend of preference shares, equity shares as well as debentures. Trading on equity becomes more important when expectations of shareholders are high.

2.Degree of control-

In a company, it is the directors who are so called elected representatives of equity shareholders. These members have got maximum voting rights in a concern as compared to the preference shareholders and debenture holders. Preference shareholders have reasonably less voting rights while debenture holders have no voting rights.

3.Flexibility of financial plan-

In an enterprise, the capital structure should be such that there is both contractions as well as relaxation in plans. Debentures and loans can be refunded back as the time requires. While equity capital cannot be refunded at any point which provides rigidity to plans. Therefore, in order to make the capital structure possible, the company should go for issue of debentures and other loans.

4.Choice of investors-

The company’s policy generally is to have different categories of investors for securities. Therefore, a capital structure should give enough choice to all kind of investors to invest. Bold and adventurous investors generally go for equity shares and loans and debentures are generally raised keeping into mind conscious investors.

5.Capital market condition-

In the lifetime of the company, the market price of the shares has got an important influence. During the depression period, the company’s capital structure generally consists of debentures and loans. While in period of boons and inflation, the company’s capital should consist of share capital generally equity shares.

6.Period of financing-

When company wants to raise finance for short period, it goes for loans from banks and other institutions; while for long period it goes for issue of shares and debentures.

7.Cost of financing-

In a capital structure, the company has to look to the factor of cost when securities are raised. It is seen that debentures at the time of profit earning of company prove to be a cheaper source of finance as compared to equity shares where equity shareholders demand an extra share in profits.

8.Stability of sales-

An established business which has a growing market and high sales turnover, the company is in position to meet fixed commitments. Interest on debentures has to be paid regardless of profit.

Q.4 Classify the various kinds of entrepreneurs according to the kinds of business

Ans : Definition of Entrepreneur:-

According to America heritage dictionary;

“Entrepreneur is a person who organizes operates and assumes the risk for business venture”

The dictionary of social sciencehas defined entrepreneur from functional viewpoint. According to it “entrepreneur is a person 1) who exercise the function or 2) initiating coordinating controlling or institute major change in a business enterprise and or 3) bearing those risk of operation which arise from the dynamic nature of society and imperfect knowledge of the future which can cast through transfer calculation or elimination

According to the Type of Business:- Entrepreneurs are found in various types of business coronations of varying size. We may broadly classify them as follows:

1.Business Entrepreneur:

Business entrepreneurs are individuals who conceive an idea for a new product or service and-then creates a business to materialize their idea into reality. They tap both production and marketing’ resources in their search to develop a new business opportunity. They may set up a big establishment or a small business unit. They are called small business entrepreneurs when found in small business units such as printing press, textile processing house, advertising agency; readymade garments, or confectionery. In a majority of cases, entrepreneurs are found in small trading and manufacturing business and entrepreneurship flourishes when the size of the business is small.

2. Trading Entrepreneur:

Trading entrepreneur is one who undertakes trading activities and is not concerned with the manufacturing work. He identifies potential markets, stimulates demand for his product line and creates a desire and interest among buyers to go in for his product. He is engaged in both domestic and overseas trade. Britain, due to geographical limitations, has developed trade through trading entrepreneurs. These entrepreneurs demonstrate their ability in pushing many ideas ahead to promote their business. 

3. Industrial Entrepreneur:

Industrial entrepreneur is essentially a manufacturer, who identifies the potential needs of customers and tailors a product or service to meet the marketing needs. The entrepreneur has the ability to convert economic resources and technology into a considerably profitable venture. He is found in industrial units as the electronic industry, textile units, machine tools or videocassette tape factory and the like. 

4. Corporate Entrepreneur:

Corporate entrepreneur is a person .who demonstrates his innovative skill in organizing and managing corporate undertaking. A corporate undertaking is a form of business’ organization, which is registered under some statute or Act, which gives it a separate legal entity. A trust registered under the Trust Act, or companies registered under the Companies Act are example of corporate undertakings. A corporate entrepreneur is thus an individual who plans, develops and manages a corporate body. 

5.Agricultural Entrepreneur:

Agricultural entrepreneurs are those entrepreneurs who undertake agricultural activities as raising and marketing of crops, fertilisers and other inputs of agriculture. They are motivated to raise agriculture through mechanization, irrigation and application of technologies for dry land agriculture products. They cover a broad spectrum of the agricultural sector and include its allied occupations. 

Q.5 Discuss the various phases of Entrepreneurial Development Programme.

Ans :Phases of Entrepreneurial Development Programme:-

1.Seed or Concept:-

This is the wild-eyed, perhaps incurable, inventor stage. There is an idea, a concept, no management team, no prototype, and patentability has not been determined. No business plan, timetable, or market research has been assembled.

Tasks: Now is the time to do the “hard research” to decide if writing a plan is worth the effort and if the business is really a dream or can be made into a profitable reality.

2.Start-up:-

At least one principal person of the company is pursuing the project on a full-time basis. The prototype is being developed or the service is being discussed with potential users, the business plan is being refined, a management team is being identified, market analysis is being undertaking, and beta tests are being set up or initial customers are identified. More formal funding is being accomplished.

Tasks: Complete and test the prototype or beta test the service to obtain evidence of commercial interest.

Finance options: Traditional venture capital firms may show an interest at this stage but you are much more likely to interest Business Angels to fund this stage.

3.First Stage:-

The company is now a going concern. The product has proven manufacturable and is selling. If it’s a service company, some customers have tried the service.

Tasks: To achieve market penetration and initial sales goals, reach close to break even, increase productivity, reduce unit costs, build the sales organization and distribution system.

Finance options: At this stage, traditional venture capital firms are interested in investment–in fact, it’s their most preferable stage. Financing is needed to get the production bugs worked out and to support initial marketing efforts.

4.Second Stage:-Significant sales are developing as are assets and liabilities. The company is sporadically achieving break even, and cash flow management becomes critical. Second-level management is being identified and hired.

Tasks: To obtain consistent profitability, add significant sales and back orders, expand sales from regional to national, identify international marketing plans, and obtain working capital to expand marketing, accounts receivable, and inventory.

Finance options: More sophisticated and second-round venture capital financing comes into play at this stage. The founders and investors are forming plans for the harvest.

5.Third Stage (also Mezzanine Stage):-

All systems are really go and the potential for a major success is beginning to be apparent. Snags are being worked out in all areas from design and development of second-generation products.

Tasks: To increase market reliability, begin export marketing, put second-level management in place, begin to “dress up” the company for harvest.

Finance options: At this stage, the company may need to obtain “bridge” or “mezzanine” financing to carry increased accounts receivable and inventory prior to harvest.

6.Stage Four:

The end may be near for entrepreneurial companies. The company is sifting and sorting out its options including going public, being acquired, selling out, or merging. What started out as a dream has become an entrepreneurial reality.

Q.6 Discuss the remedies to solve the issues of Women Entrepreneurs.

Ans : Women Entrepreneurs may be defined as the women or a group of women who initiate, organize and operate a business enterprise. Government of India has defined women entrepreneurs as an enterprise owned and controlled by a women having a minimum financial interest of 51% of the capital and giving at least 51% of employment generated in the enterprise to women. Like a male entrepreneurs a women entrepreneur has many functions.

Right efforts on from all areas are required in the development of women entrepreneurs and their greater participation in the entrepreneurial activities.  Following efforts can be taken into account for effective development of women entrepreneurs.

Remedies are:-

1. Consider women as specific target group for all developmental programmes.

2. Better educational facilities and schemes should be extended to women folk from government part.

3. Adequate training programme on management skills to be provided to women community.

4. Encourage women's participation in decision-making.

5. Vocational training to be extended to women community that enables them to understand the production process and production management.

6. Skill development to be done in women's polytechnics and industrial training institutes. Skills are put to work in training-cum-production workshops.

7. Training on professional competence and leadership skill to be extended to women entrepreneurs.

8. Training and counselling on a large scale of existing women entrepreneurs to remove psychological causes like lack of self-confidence and fear of success.

9. Counselling through the aid of committed NGOs, psychologists, managerial experts and technical personnel should be provided to existing and emerging women entrepreneurs.

10. Continuous monitoring and improvement of training programmes.

11. Activities in which women are trained should focus on their marketability and profitability.

12. Making provision of marketing and sales assistance from government part.

13. To encourage more passive women entrepreneurs the Women training programme should be organised that taught to recognize her own psychological needs and express them.

14. State finance corporations and financing institutions should permit by statute to extend purely trade related finance to women entrepreneurs.

15.  Women's development corporations have to gain access to open-ended financing.

16.  The financial institutions should provide more working capital assistance both for small scale venture and large scale ventures.

17. Making provision of micro credit system and enterprise credit system to the women entrepreneurs at local level.

18. Repeated gender sensitisation programmes should be held to train financiers to treat women with dignity and respect as persons in their own right.

19. Infrastructure, in the form of industrial plots and sheds, to set up industries is to be provided by state run agencies.

20. Industrial estates could also provide marketing outlets for the display and sale of products made by women.

Q.7 Write a note on tips to conduct a Market Survey

Ans :-

Market surveys are an important part of market research that measure the feelings and preferences of customers in a given market. Varying greatly in size, design, and purpose, market surveys are one of the main pieces of data that companies and organizations use in determining what products and services to offer and how to market them. These steps will teach you the basics of how to make a market survey and offer tips for optimizing your results.

Market survey--where you actually speak to members of your target audience--are an important part of market research. You can choose to hire a company to do it for you, but conducting the interviews yourself will most likely give you a much better idea of the needs of your target audience and will provide you with insights that you might not otherwise have gleaned.

Tips are:-

1.Determine and define the nature, extent, and size of your market.

• Before conducting a survey in a given market, you need to know what market you're targeting. Choose geographic and demographic parameters, identify customers by types of product, and get an idea of how many people there are in the market.
• Narrow your market research to a short list of desired data: buying habits, for example, or average income.

2. Determine what aspects of the market you want to investigate.

3. Find out where and when you can reach customers in your market.

• You might conduct a survey at the mall or on the street, via telephone, online, or through the mail. Your results may change based on the time of day and year. Choose a method and time that best suits your research.

4.Choose a sample size.

• Your sample size should be as large as possible to maximize the accuracy of your results. You may want to create sub-samples--e.g., "males," "18-24 year-olds," etc.--to decrease the risk of biasing your results towards certain types of people.

5.Prepare a list of questions with answers that will provide the data you need for your market research.

• Your questions should be pointed and specific. Craft questions with answers you can predict. Do not ask the same thing in two different ways. Try to use as few words as possible.

6.Devise a way to quantify the answers you receive.

• If you are asking about preferences, you may want to ask respondents to rank their feelings numerically or using keywords. If you are asking about money, use ranges of values. If your answers will be descriptive, decide how to group these responses after the survey is complete so that they can be grouped in categories.

7.Identify variables that might affect your results (usually characteristics of people who are more likely to answer surveys) and figure out how to reduce their influence.

8.Set a time period and location for your survey that is likely to result in the largest sample size.

9.Prepare your survey forms.

10.Conduct your survey, maximizing sample size and accuracy of responses.

Q.8 Explain the product life cycle.

Ans : Product Life Cycle:-

The Product Life Cycle (PLC) is used to map the lifespan of a product. There are generally four stages in the life of a product. These four stages are the Introduction stage, the Growth stage, the Maturity stage and the Decline stage. The following graph illustrates the four stages of the PLC:

The stages of a product's life cycle can be classified as follows:

1.Low and slow stage:

The product sales are the lowest and move up very slowly at snail's pace Highest promotional Stage: During this period of introduction or the development, promotional expenses bear the highest proportion of sales. "The product's costs rise sharply as the heavy expense of advertising and marketing any new product begins to take its toll. "Highest Product prices: Lower input and sales absorbing fixed costs.

2.Growth:-

Once the market has accepted the product, sales begin to rise. This is most crucial stage and help the brand to establish in the market.

3.Maturity:-

Market becomes saturated because, the house hold demand is satisfied and distribution channels are full. By now the product is widely accepted and growth slows down. Before long, however, a successful product in this phase will come under pressure from competitors. The producer will have to start spending again in order to defend the product's market position.

4.Decline:-

Sooner or later actual sales begin to fall under the impact of new product competition and changing consumer tastes and preferences. A company will no longer be able to fend off the competition, or a change in consumer tastes or lifestyle will render the product #:redundant. At this point the company has to decide how to bring the product's life to an end. The product life cycle is an important concept in marketing. It includes four stages that a product goes through from when it was first #:thought of until it is eliminated from the industry. Not all products reach this final stage. Some continue to grow and others rise and fall.

Stages of Product Life Cycle Can Vary in Length: "Branded product life cycles vary in length and shape. Product category and product form life cycles also possess degrees of variability, depending on the type of product under consideration. One extreme is the very short life cycle associated with the product fad. Fads move almost immediately into the growth stage of the PLC. Some fads possess significant residual markets that keep them around for a while, but even these products move fairly rapidly into and through decline." Fads: "A temporary fashion with a short life cycle (Hula Hoop, Frisbee, Wristbands) Some products can have extremely long maturity phases, but others may have very long introductory phases. It may take some products a substantial amount of time to catch on in the market before they enter their growth phases. These products have been referred to as "high learning products."

Q.9 Write a detailed note on District Industries centers- (DICS)

Ans : The 'District Industries Centre' (DICs) programme was started by the central government in 1978 with the objective of providing a focal point for promoting small, tiny, cottage and village industries in a particular area and to make available to them all necessary services and facilities at one place. To develop and promote Cottage and Small Scale Industries in the district. The Small Scale Industries (SSI) means the Industries with investment upto Rs 1 (one) crore in plant & machinery.The finances for setting up DICs in a state are contributed equally by the particular state government and the central government. To facilitate the process of small enterprise development, DICs have been entrusted with most of the administrative and financial powers. For purpose of allotment of land, work sheds, raw materials etc., DICs functions under the 'Directorate of Industries'. Each DIC is headed by a General Manager who is assisted by four functional managers and three project managers to look after the following activities :

Activities of District Industries Centre (DIC):

i. Economic Investigation

ii. Plant and Machinery

iii. Research, education and training

iv. Raw materials

v. Credit facilities

vi. Marketing assistance

vii. Cottage industries

Objectives of District Industries Centre (DIC):

The important objectives of DICs are as follow :

i. Accelerate the overall efforts for industrialisation of the district.

ii. Rural industrialisation and development of rural industries and handicrafts.

iii. Attainment of economic equality in various regions of the district.

iv. Providing the benefit of the government schemes to the new entrepreneurs.

v. Centralisation of procedures required to start a new industrial unit and minimisation- of the efforts and time required to obtain various permissions, licenses, registrations, subsidies etc.

Functions of District Industries Centre (DIC):

i. Acts as the focal point of the industrialisation of the district.

ii. Prepares the industrial profile of the district with respect to :

iii. Statistics and information about existing industrial units in the district in the large, Medium, small as well as co-operative sectors.

iv. Opportunity guidance to entrepreneurs.

v. Compilation of information about local sources of raw materials and their availability.

vi. Manpower assessment with respect to skilled, semi-skilled workers.

vii. Assessment of availability of infrastructure facilities like quality testing, research and development, transport, prototype development, warehouse etc.

viii. Organises entrepreneurship development training programs.

ix. Provides information about various government schemes, subsidies, grants and assistance available from the other corporations set up for promotion of industries.

x. Gives SSI registration.

xi. Prepares techno-economic feasibility report.

xii. Advices the entrepreneurs on investments.

xiii. Acts as a link between the entrepreneurs and the lead bank of the district.

xiv. Implements government sponsored schemes for educated unemployed people like PMRY scheme, Jawahar Rojgar Yojana, etc.

xv. Helps entrepreneurs in obtaining licenses from the Electricity Board, Water Supply Board, No Objection Certificates etc.

xvi. Assist the entrepreneur to procure imported machinery and raw materials.

xvii. Organises marketing outlets in liaison with other government agencies.

Q:-10 What are the sources from which an entrepreneur can obtain business ideas.

Ans : Sources of business Ideas:-

Business ideas are all around you. Some business ideas come from a careful analysis of market trends and consumer needs; others come from serendipity. If you are interested in starting a business, but don't know what product or service you might sell, exploring these ways of getting business ideas flowing will help you choose.

Business ideas are a starting point in the journey to starting a business. Entrepreneurs can develop or generate business ideas in a variety of ways:

1) Examine your own skill set for business ideas.

Do you have a talent or proven track record that could become the basis of a profitable business?

The other day I spoke to a man who had spent years managing cleaning services at a hospital. Today he runs his own successful domestic and business cleaning service. An ex-logger I know is now making his living as an artist; he creates "chainsaw sculptures" out of wood. And the examples of professionals who have started their own agencies or consulting service businesses are legion.

2) Keep up with current events and be ready to take advantage of business opportunities.

If you read or watch the news regularly with the conscious intent of finding business ideas, you'll be amazed at how many business opportunities your brain generates. Keeping up with current events will help you identify market trends, new fads, industry news - and sometimes just new ideas that have business possibilities.

3) Invent a new product or service.

Think back 30 years ago. Was there a huge demand for anti-virus software, Internet Service Providers, or desktop computers? No! The key to coming up with business ideas for a new product or service is to identify a market need that's not being met. The clamor for ever-increasing security, for instance, has led to an explosion of new security products and services, ranging from iris-recognition machines through home security services.

4) Add value to an existing product.

The difference between raw wood and finished lumber is a good example of putting a product through an additional process which increases its value, but additional processes are not the only way value can be added. You might also add services, or combine the product with other products. For instance, a local farm which sells produce also offers a vegetable delivery service; for a fee, consumers can have a box of fresh vegetables delivered to their door each week.

5) Investigate other markets.

Some business ideas aren't suited to local consumption - but appeal greatly to a foreign market. My own little town is surrounded by acres of wild blueberries. For years the bushes produced berries that mainly fed bears and birds; B.C. has a thriving blueberry industry that doesn't leave room for a wild blueberry market.

Q:-11 Write a note on marketing strategy.

Ans : Definition:-

A marketing strategy has two key components:  a target market and a marketing mix to satisfy the target market.  A good marketing strategy enables a firm to achieve its objectives.  A firm will succeed if it can use its strategy to achieve an advantage over the competition.  A successful product offers either a quality advantage and/or price advantage over competing brands.

Contents of the Marketing Strategy

I.  Executive Summary and Table of Contents

The marketing strategy begins with a brief synopsis of the key points and major recommendations.  The Table of Contents follows the executive summary.

II.  Environmental Analysis (also known as Situation Analysis)

Before starting this section, the organization might first discuss its mission statement.

Section II provides information about the firm's current situation with regard to the current marketing environment.  It is sometimes referred to as a situation analysis.   The marketing environment must be discussed.  This section will look at external environmental factors such as the market, competition, marketing channels, economy, political climate, technology, legal and political climates, and sociocultural factors.  This section will also examine internal environmental factors such as costs, profits, human resources, financial resources, and the age of plant and equipment.  The target markets also have to be studied.  Have their needs changed?  Is the company doing a good job of satisfying the needs of its customers?  Finally, the organization has to ascertain whether their marketing objectives are still reasonable given the changing environment. The information in section II is used to help the organization with the SWOT analysis

III.  SWOT Analysis

SWOT has become a buzzword in marketing today: Companies should know their Strengths, Weaknesses, Opportunities, and Threats. A company has to understand its internal Strengths and Weaknesses and also be cognizant of external opportunities and threats. To do a SWOT analysis correctly, you must know about your competition and the industry. After the SWOT analysis is complete, a company has to build on the strengths that is has, do everything possible to eliminate or correct weaknesses, take advantage of opportunities, and do what it takes to minimize or avoid threats.

IV.  Marketing Objectives

Based on the SWOT analysis, The organization's major objectives are stated.  This makes it clear to all what the organization is trying to accomplish through its marketing plan. Objectives are in terms of such factors as market share,  profitability, and/or sales volume.  Other factors to be considered include innovation (introduce five new products), image, distribution, etc.

V.  Marketing Implementation/Action Program

This section describes the actual marketing programs that will be undertaken in order to implement the marketing strategy.  Some issues that must be discussed include what specific actions must be taken?  Who will do it?  When is it going to be done?  How much will it cost? 

The Marketing strategy is generally undertaken for one of the following reasons:

1.Needed as part of the yearly planning process within the marketing functional area.

2.Needed for a specialized strategy to introduce something new, such as new product planning, entering new markets, or trying a new strategy to fix an existing problem.

3.Is a component within an overall business plan, such as a new business proposal to the financial community.

Q:- 12 Elaborate the TQM Process in Small Scale Enterprises.

Ans : Rather than a specific management tool or process, Total Quality Management (TQM) is an approach that small business owners or managers hold in running their company. They focus on quality and price to gain and hold customers, striving to view the business through their customers' eyes. Instead of focusing solely on profits, managers identify their core customer base in order to build and maintain market share through continuous improvement of products and services. Small businesses can benefit from implementing the principles of TQM into their business environment.

1Customer Focus:- In a TQM approach, small businesses must understand who their current customers are (and are not), noting their key needs and requirements and keep these expectations at the forefront of their strategy and processes. This principle should extend to internal clients, as well, treating coworkers as customers and satisfying their demands.

2.Leadership:- Leaders create the environment in which their business operates. They set policy, plan strategy and launch tactics for staff to execute. Small businesses can take advantage of the necessity for participative management, as they are more likely to be intimately aware of all facets of their business and how they interconnect. Managers and owners can educate staff on business operations, industry developments and market trends, giving them a broader perspective on what it takes to make the company successful.

3.Staff Involvement:- As leaders set and communicate customer-focused strategy, they become smarter in acquiring and keeping quality staff. Selecting, training and motivating staff to work together, particularly in cross-functional teams, enables faster problem identification and resolution, process execution and overall productivity. In applying TQM, well-trained and motivated employees also have more control over their work and a greater sense of ownership in the company.

4.Process Approach:- In TQM, a well-informed staff, with a keener sense of what the customer expects, can help develop a proactive process that builds quality into each stage as they design and deliver products, rather than trying to catch flaws during post-production inspection, which wastes resources on potentially defective products.

5.Statistical Quality Control (SQC):- Small business owners can employ Statistical Process Control (SQC) to help make decisions. As the organization better understands customer demands, these requirements set features for the product line. Staff and management refine measurements for these features, even developing an ‘ideal’ product. The team can then continually monitor quality by assessing output against the parameters, halting fabrication in order to fix the problem when the goods being produced fall outside the acceptable limits.

6.Supplier Relationships:- Businesses can apply these TQM philosophies to suppliers. This will help them understand their attitudes, values and capabilities, as well as the minimum and maximum variations in the goods they deliver to the company, to monitor quality and create value across the supply chain.

7.Continuous Improvement:- Continuous improvement is fundamental in TQM. Essentially, in this practice, the business executes the first six principles continuously. The whole organization, from top leadership to front-line employee, must commit to the time and effort necessary in making modest gains in the operations. Rather than launching a revolution in how a company runs, step-by-step changes initiated by everyone in the organization ultimately convert the business and ingrain the TQM philosophy into the corporate culture.

Q.13 Mr. Latha G. wants to set up her own garment manufacturing unit. She needs to submit report about the project ,in order to get the loan. What all essential details she should mention in the project report.

Ans : The details that Mr. Latha G needs to mention are:-

1. Aim of Project:-

What do we want to produce? The aim of the project is a mixture of the reasons for doing the project and the benefits that are expected from it. This section of the plan can be either fulfilled by linking to the main business case, or by restating it in language for the expected audience.

2. Outputs:-

Given the aim of the project, what do we actually need to produce to get there? What will your completed project be made up of? These need to be clearly defined. For example, your project's aim may be to upgrade the IT infrastructure in an organisation. Your final output would be a completed computer network, a new computer on every desk, and all appropriate software installed and ready to go.

3. Quality Criteria:-

Now we have the outputs, we need to understand what quality they need to be of. In the example above, we have an output of a completed computer network. However, we need to know that the network can actually cope with the amount of traffic going over it!

4. Resources:

We have now set down what outputs we need to produce, and what quality they need to be at. This means we are now in a position to look at the resources we will need to achieve this. Resources include staff time, particular knowledge or skill sets, money (e.g. buying equipment), and time (some tasks can't be increased by throwing more people at the problem, e.g. delivery times, setting time for concrete, etc.).

5. Management Structure:-

How are we going to manage the work? You need to describe the general approach to the project here. Who will be the decision makers for the various different streams of work? For example, you may be doing a significant procurement - who makes the decision about what company to buy from?

6. Milestones:-

Here you need to think about how you will break up the project. Unless it is very small, you don't want to have the entire project as one lump of work, with the only check on progress at the very end. Instead, it makes sense to break the project up into discrete chunks, where related tasks can be lumped together, with a sensible milestone at the end of them.

7. Tolerances:-

You will have already looked at the resources you need. Now we need to set how far you, or the project executive, can let the project stray from these targets before needing to sound the alarm. For example, you could set a tolerance in terms of finance of +/- 5%, and a tolerance in terms of time of +/- 10%. Equally, you may want to look at tolerances of quality.

8. Dependencies:-

This is where you look at what needs to happen before something else. For example, in our example above, you need to complete the requirements gathering before you can finish the tender documentation.

Q.14 Mr. Raghvan is the owner of Furniture manufacturing company. He needs some more finance to get some new machines and also expand his business. Suggest the different sources of finance he could use to get the required funds.

Ans : Different sources of finance that Mr. Raghvan can use is :-

1.Personal Savings/“Love Money”:-

The greatest percentage of businesses are financed for start up using personal savings. The most obvious advantage of using personal savings to start up or expand your business is that you relinquish no control over your business. However, it is relatively rare for a business owner to have sufficient personal savings to completely finance his or her business. Personal savings are often used in conjunction with other forms of financing, i.e., bank loans. Bankers tend to see a significant investment of personal savings as an important indication of a business owner’s commitment to the business.

“Love money”, a gift or loan from family or friends, is another commonly used source of business financing, particularly in the start-up phase. This also enables you to maintain control of your business. However, in the event a business does not succeed and loans from family and friends are unable to be repaid, this can create significant strains on personal relationships. As with personal savings, “love money” is often used in conjunction with other sources of financing for businesses.

2.Conventional Debt Financing:-

Banks, credit unions and other financial institutions are commonly used by business owners as a source of financing. The most common financing instruments used with debt financing are lines of credit or operating loans (used to finance inventory or accounts receivable), term loans (used to finance fixed assets, i.e., equipment and machinery), mortgages (used to finance purchase or construction of land and buildings), and credit cards.

3.Government Assistance:-

Various forms of government assistance are available for business owners in the form of grants or loans from the federal, provincial and municipal levels of government. These grants and loans are often targeted at specific industries or areas and have criteria which must be met by the business before it is eligible for financing. Some examples of government agencies and organizations which have such programs are Atlantic Canada Opportunities Agency (ACOA), Nova Scotia Business Inc, and InNOVAcorp.

4.Business Partners/Strategic Alliances:-

Creative business owners may obtain financing to pursue business opportunities by entering into partnerships or alliances with other business owners or entities. Means by which these partnerships/alliances are structured are limited only by the imagination of the parties involved. These can include formal partnerships, joint ventures or joint ownership of a subsidiary company. The advantages of pursuing such partnership/alliance can be great. A business owner who enters into a partnership/alliance with a compatible, strong partner can take advantage not only of their partner’s sources of financing, but also their business acumen, employees, equipment and other resources. However, it is very important to decide issues such as sharing of profits, control and decision-making issues and responsibilities at the outset.

5.Venture Capital:-

Venture capital is an alternative form of financing which may be sought at times when a business is unable to attract appropriate financing from other conventional sources.