XAVIERS INSTITUTE EXAM QUESTION AND ANSWER PROVIDED WHATSAPP 91 9924764558

XAVIERS INSTITUTE EXAM QUESTION AND ANSWER

XAVIERS INSTITUTE EXAM QUESTION AND ANSWER PROVIDED

CONTACT

DR. PRASANTH BE BBA MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

           

Xaviers Institute of Business Management Studies

Max. Marks:80

Advertising

_______________________________________________________________________________________________________________________________

PART – A                               (10 x 5 = 50)

Answer Any FIVE Questions

1. What is Advertising? Discuss its objectives and point out the problems of advertising in India.

2. How is Advertising effectiveness tested?

3. What are the important features of an Advertisement Copy?

4. Discuss the essential features of a sound advertising policy.

5. Mention the functions of an advertising agency.

6. Examine the function to be considered in the selection of Media for advertising.

7. What is sales promotion? Why it is importance in marketing industrial product?

8. Distinguish between Coupon and Sampling.

9. What are the factors governing basic Promotional strategy?

10. Outline the different methods of providing discounts in the selling process.

PART – B                       (2 x 15 = 30)

Answer Any TWO Questions

11. “Advertising Sells Product”. Do you agree with this statement? Give reasons and explain the functions performed by advertising.

12. “The success of Advertisement campaign depends on proper selection of Media” – Discuss.

13. “Advertising brings long-term benefits but Sales promotion is for quicker result”. Explain with an example.

14. Analyze the distinctive features of various elements of the Promotional mix. Illustrate with a suitable example.

15. Outline the different methods of providing discounts in the selling process.

Xaviers Institute of Business Management Studies

Subject Title: Brand Management                                                                          

                                                                                                                                                      Maximum Marks: 80           

                                                                                                                                                                                                                                               

Question No. 1 is compulsory and is for 16 Marks. Please attempt any 4 questions from question number 2 to 9.

1. Case Study : (Compulsory)

BURNOL

Burnol has been around for six decades as a yellow burns-relief ointment.  It has almost become a generic brand.  Its yellow colour reminds one of turmeric, the traditional burns-relief remedy.

The brand has been recently acquired by Dr. Morepen (a subsidiary of Morepen Laboratories Ltd.) from Reckit Piramal.  The brand has high recall value.  Morepen is the brand’s third owner (Boots is the first, Pirmal second).

Burnol’s position in the mind space of the consumer is that of the burns ointment.  It is open to marketers to reposition the brand.  But sometimes the brand does not budge from its original position.  Burnol is a typical example.  It is so strong as anti-burn ointment that it has become intractable.

Burnol introduced by Boots started domestic manufacturing in 1948. JWT handled the account.  Formerly, it was sold on prescription.  In 1960 it became over-the counter (OTC) product.

As Indian housewives depended upon kerosene or wood-fed stoves, Burnol became an integral part of the household.  In 1967, Burnol’s application was far widened, to include antiseptic properties against cuts and other wounds. But it did not succeed and Boots reverted to its original anti-burns position.  In 1972, Shield was launched by SKF as a competitive brand.  It was followed by Medigard by J.L. Morison.  But they could not affect Burnol.

In 1980, a commercial on DD showed a daughter entering kitchen and getting burns due to oil splash. The mother uses Burnol and the VO says “Haath jal gaya? Shukar hai ghar mein Burnol jo hai”.

Kitchen became safer in 85s after the switch-over to LPG-based cooking and the use of gas-lighter instead of the match boxes.  Burnol started stagnating.

Though the product had high recall, the actual reality was that households did not keep the product handy.  Plain water was being recommended to treat burns.  Turmeric, as it causes stains, was becoming a liability.  The product composition was changed by changing colour from deep yellow to non-staining light yellow.  People were coaxed to keep the product within easy reach, Sales showed some improvement.

In 1995, again it was repositioned as antiseptic for multiple usages. The colour was made even lighter. It was given a new perfume.  But the brand failed to compete with other antiseptic creams such as Boroline and Dettol. The brand could not be moved from its ‘burns’ spot in the consumer mind. It’s becoming generic as a burns remedy proved to be its cause for stagnation.

In 2000, Burnol was sold to Reckitt Pirmal for 12.5 crore.  It became Burnol Plus.  It was positioned as ‘first aid cream’.  It registered a turnover of ` 6.2 crore in 2002. As Reckit Pirmal joint venture came apart, Burnol was sold to Dr. Morepen in 2003.  It is being relaunched in April 2004.

Burns market including dressings stand as ` 39 crore. Antiseptic market stands at ` 210 crore.  The old need is passing into history. The strategy should be to retain its original uniqueness, and still broad-base it.  There are new dangers such as geysers, irons, ovens and so on.  Burnol can become a cream that ensures safety if present. Burnol should be promoted as brand that cares.

Burnol is now marketed by Dr. Morepen Lab as protective cream which should be kept handy always.

Question:

As a Management consultant give your comments on Burnol as a brand.

2. What do you understand by the concept of a Brand? Describe the characteristics of Brands.

   

3. a. Define the Brand Image. Explain the dimensions of Brand Image.                                                 
4. What is meant by Brand Identity? Explain the different elements of Brand Identity.                                                                                                                                                                                                  

4. Discuss in detail the different stages of brand building process.
   
5. a. What is Brand Audit?  Explain its importance.                                                                                                         
6. Describe the two steps in brand audit.                                                                                                                                 

6. “Positioning is an outcome of our perceptions about the brand relative to the competing brands” – Discuss with examples.

7. How do consumers perceive and choose brands? Discuss.

8. What are the different phases of strategic brand management process?

9. Discuss the “TEN COMMANDMENTS” of Global Branding.

Xaviers Institute of Business Management Studies

BUSINESS ENVIRONMENT

Note: Attempt any five questions. All questions carry equal marks

1. Discuss the changing scenario of business environment in India and its principal implications for the business.
2. (a) Explain the dualistic character of Indian economy and the problem of uneven income distribution.

(b) Outline the development of consumer movement in India.

3. (a) Write notes on (i) adjudication machinery for settlement of disputes, and (ii) Employees Pension Scheme, 1995.

(b) Enumerate the powers of the Central Government to control production, supply and distribution of essential commodities under the Essential Commodities Act, 1955.

4. Describe the important amendments proposed under the Companies (Amendment) Bill, 2003 and the additions proposed thereto by lrani Panel.
5. (a) Can SEBI compel a public company to get its securities listed on the stock exchanges while making a public issue? On what grounds can the listed securities be delisted by a stock exchange? State the rules in this regard.

(b) "The role of stock exchanges in India need not be over - emphasized”. Comment.

6. Describe the evolution of the concept of corporate governance and outline the various measures adopted in India to ensure good corporate governance.
7. Make a critical assessment of New Economic Policy keeping in view the long term objectives of economic development.
8. (a) What are the objectives of EXIM policy 2002 - 07? Explain its main provisions.

(b) Write an explanatory note on functions and coverage of WTO.

9. Distinguish between the following:

(a) Micro Environment and Macro Environment

(b) Economic Growth and Economic Development

(c) Money Market and Capital Market

(d) Entrepreneurship, Role and Promotional Role of Government

Xaviers Institute of Business Management Studies

                                                    BUSINESS ETHICS

Marks - 80

SECTON-A

ANSWER ALL QUESTIONS (5X3=15)

1. Define business ethics?
2. What is kick-back in business?
3. What is unfair discrimination?
4. What is acid rain?
5. Define the term social responsibility in business?

SECTION-B

ANSWER any 5 QUESTIONS (5X5=25)

6. Difference between transactional & transformational leadership?
7. Business & ethics are contradictory?
8. Explain the term 'stealing trade secrets'
9. Explain whistle blowing
10. Mention 3 unethical practices in marketing?
11. What are the primary reasons for resources depletion?
12. Explain the objectives of social audit?

SECTION-C

ANSWER any 4 questions (10 X 4=40)

13.discuss the role & import of ethics in business
14.explain the types of ethical issues in business
15.discuss about the qualities & features of CEO in business
16.analyses the various causes of pollution in developing countries
explain the principle obligations of a business firm
17.discuss in detail about unfair trade discrimination?

Xaviers Institute of Business Management Studies

BUSINESS STRATEGY

Marks: 100
NOTE:
I. Answer ANY FIVE questions.
II. All questions carry 20 marks each.
III. Total numbers of questions are EIGHT.

----------------------------------------------------------------------

Q.1. Write short notes on ANY TWO of the following
a. Globalization
b. Task and processes in formulating business strategy
c. TQM Philosophy
d. Characteristics of well formulated corporate objectives

Q.2. Describe Vision and Mission statements with suitable illustrations. What is the difference between vision and mission? How does business definition help in articulating the Mission statement?

Q.3. Describe Porter’s five forces model to analyse competition with reference to light commercial vehicle industry.

Q.4. Describe the GE multifactor portfolio matrix and state how the GE matrix is superior tool Vis a Vis the BCG matrix.

Q.5. a) Describe Ansoff’s matrix
b) What is the difference between market penetration and market development? Illustrate with suitable examples.

Q.6. What is “Best cost provider” strategy? What are the risks in pursuing this strategy?

Q.7. What strategic options a firm could follow when the firm is operating in a maturing industry?

Q.8. Describe the role of strategy supportive reward system with suitable illustrations.

Xaviers Institute of Business Management Studies

                                                                                                                                               

 MARKS: 80   

 COURSE: MBA

SUB:  CORPORATE LAW   

                N.B.: 1 Attempt any Twelve Questions

                          2) Last two Questions are compulsory

Q.1. In the following statements only one is correct statement.  Explain         Briefly?                                                                                                 (5 Marks)

1. i) An invitation to negotiate is a good offer.
2. ii) A quasi-contract is not a contract at all.

        iii)   An agreement to agree is a valid contract.

Q.2. A ship-owner agreed to carry to cargo of sugar belonging to A from Constanza to Busrah.  He knew that there was a sugar market in Busrah and that A was a sugar merchant, but did not know that he intended to sell the cargo, immediately on its arrival.  Owning to Shipment’s default, the voyage was delayed and sugar fetched a lower price than it would have done had it arrived on time.  A claimed compensation for the full loss suffered by him because of the delay.  Give your decision.  Explain Briefly?                                                                                               (5 Marks)

Q.3. The proprietors of a medical preparation called the “Carbolic Smoke Ball” published in several newspapers the following advertisement:-

        “£ 1000 reward will be paid by the Carbolic Smoke Ball Co. to any person who contracts the increasing epidemic influenza after having used the Smoke Ball three times daily for two weeks according to printed directions supplied with each ball. £ 1000 is deposited with the Alliance Bank showing our sincerity in the matter.

        On the faith in this advertisement, the plaintiff bought a Smoke Ball and used it as directed. She was attacked by influenza.  She sued the company for the reward.  Will she succeed?  Explain Briefly               (5 Marks)

Q.4. Fazal consigned four cases of Chinese crackers at Kanpur to be carried to Allahabad on the 30^th May, 1987.  He intended to sell them at the Shabarat festival of 5^th June 1987.  The railway discovered that the consignment could not be sent by passenger train and asked Fazal either to remove them or authorize their dispatch by goods train.  He took no action and the goods arrived at Allahabad a month after they were booked.                          

        Fazal filed a suit against Railways for damages due to late delivery of the goods which deprived him of the special profits at the festival sale.  Decide & explain briefly ?                                                              (5 Marks)

Q.5. ‘Lifeoy’ Soap company advertised that it would give a reward of Rs. 2000 who contracted skin disease after using the ‘Lifeoy’ soap of the company for a certain period according to the printed directions.  Mrs. Jacob purchased the advertised ‘Lifeboy’ and contracted skin disease inspite of using this soap according to the printed instructions.  She claimed reward of Rs. 2000. The claim is resisted by the company on the ground that offer was not made to her and that in any case she had not communicated her acceptance of the offer.  Decide whether Mrs. Jacob can claim the reward or not.  Give reasons. Explain briefly?                                         (5 Marks)

Q.6. In each set of statements, only one is correct.  State the correct statements & Explain briefly?

1. a) i) A bailee has a general lien on the goods bailed.
2. ii) The ownership of goods pawned passes to the pawnee.

• A gratuitous bailment can be terminated by the bailor even

before the stated time.

1. b) i) A substituted agent is as good an agent of the agent as a sub-

                agent.

1. An ostensible agency is as effective as an express agency.

• A principal can always revoke an agent’s authority.    (5 Marks)

Q.7. A, an unpaid seller, sends goods to B by railway.  B becomes insolvent

And A sends a telegram to Railway authorities not to deliver the goods to B. B. goes to the Parcel office of Railway Yard and by presenting R. R.  (Railway Receipt) takes delivery of the goods and starts putting them in the cart.  Meanwhile the Station Master comes running with the telegram in hand and takes possession of the goods from B.  Discuss the rights of A and B to the goods in possession of Railway authorities.                      (5 Marks)

Q.8. X needs Rs. 10,000 but cannot raise this amount because his credit is not good enough.  Y whose credit is good accommodates.  X by giving him a pronote made out in favour of X, though Y owes no money to X.  X endorses the pronote to Z for value received.    Z who is holder in due course demands payment from Y.  Can Y refuse and plead the arrangement between him and X Explain briefly?                                                                        (5 Marks)

Q.9. Will C has the right of further negotiation in the following cases: (B signs the endorsements)        Explain briefly?                                              (5 Marks)

1. i) ‘Pay C for my use’
2. ii) ‘Pay C’)

• ‘Pay C or order for the account of B’

Q.10.       A promissory note was made without mentioning any time for payment.  The holder added the words’ on demand on the face of the instrument.  State whether it amounted to material alteration and explain the effect of such alteration.  Explain briefly?                                               (5 Marks)                                                                 

Q.11.       State whether the following instruments are valid promissory notes:

1. i) I promise to pay Rs. 5000 to B on the dearth of ‘B’s uncle provided that D in his will gives me a legacy sufficient for the promise of payment of the said sum.
2. ii) I hereby acknowledge that I owe X Rs. 5,000 on account of rent due and I agree that the said sum will be paid be me in regular installments.

• I acknowledge myself indebted to B in Rs. 5000 to be paid on demand for value received.                         (5 Marks)

Q.12.       A Payee holder of a bill of exchange.  He endorses it in blank and delivers it to B.  B endorses in full to C or order.  C without endorsement transfers the bill to D.  State giving reasons whether D as bearer of the bill of exchange is entitled to recover the payment from A or B or C.  Explain briefly?                                                                                            (5 Marks)

Q.13.       Write a short note on the Doctrine of Indoor Management? Explain briefly?                                                                                            (5 Marks)

Q.14.       The shareholders at an annual general meeting passed a resolution for the payment of dividend at a rate higher than that recommended by the Board of Directors.  Examine the validity of the resolution. Explain briefly?                                                                                                       (5 Marks)

Q.15.       In a prospectus issued by a company the Managing Director stated that the company had paid dividend every year during 1921 – 27, which was a fact.  However, the company had sustained losses during the relevant period and had paid dividends out of secret reserves accumulated in the past.  Examine the consequences of the observation made by the Managing Director. Explain briefly?                                                           (5 Marks)

Q.16.       In a prospectus issued by a company the Managing Director stated that the company had paid dividend every year during 1921-27, which was a fact.  However, the company had sustained losses during the relevant period and had dividends out of secret reserves accumulated in the past.  Examine the consequences of the observation made by the Managing Director.  Explain briefly?                                                                                 (5 Marks)

Q.17.   A buys from B 400 shares in a company on the faith of a share certificate issued by the company.  A tender to the company a transfer deed duly executed together with B’s share certificate.  The company discovers that the certificate in the name of B has been fraudulently obtained and refuses to register the transfer. Advise A. Explain briefly?                        (5 Marks)

Q.18.       A insured his house against fire.  Later while insure, A killed his wife, severely injured his only son, set fire to the house and died in the fire.  The son survived and sued the insurer for the fire loss, advice the insurer.  Explain briefly?                                                                                    (5 Marks)

Q.19. a) Satrang Singh admitted his only infant son in a private nursing home.  As a result of strong dose of medicine administered by the nursing attendant, the child has become mentally retarded. Satrang Singh wants to make a complaint to the District Forum under the Consumer Protection Act, 1986 seeking relief by way of compensation on the ground that there was deficiency in service by the nursing home.  Does his complaint give rise to a consumer dispute?  Who is the consumer in the instant case? Explain briefly?                                                  

1986. b) Smart booked a motor vehicle through one of the dealers. He was informed subsequently that the procedure for purchasing the motor vehicle had changed and was called upon to make further payment to continue the booking before delivery.  On being aggrieved, Smart filed a complaint with the State Commission under the Consumer Protection Act, 1986.  Will he succeed? Explain briefly?                             
1987. c) Brittle and Company, a small-scale industry, sought nursing and financing facilities from its bankers by means of grant of further advances and adequate margin money in anticipation of good demand for its products. In failing to obtain this and having become sick, it proceeds against its bankers under the Consumer Protection Act, 1986, Will it succeed?  Explain briefly?                                                                                     (5 Marks)

Q.20.       X who was working as a truck driver had taken a general insurance policy to cover the risk of injuries for a period from 1.11.1998 to 30.11.1999.  He renewed the policy for a further period of one year on 10.11.1999.  On the same day, he met with an accident and suffered multiple injuries including fractures.  X submitted the claim along with documents to the insurance company. The insurance company repudiated the claim on the ground that the premium for the renewed policy was received in the office only at 2.30 p.m. on 10.11.1999, while the accident had taken place at 10.00 a.m. on that day and hence there was no policy at the time of accident.  Will X succeed if he files a complaint against the insurance company for this claim? Explain briefly?                                                                           (5 Marks)

Q.21.       Avinash booked his goods with Superfast Freight Carriers at Delhi for being carried to Ferozabad.  The goods receipt note mentioned that all the disputes would be subject to jurisdiction of the Mumbai Court.  Avinash lodged a complaint for certain deficiency in service against the transporter in the District Forum at Delhi.  Superfast Carriers contested that District Forum at Delhi had no jurisdiction to entertain the complaint as the head office of the transporter was at Mumbai and the jurisdiction has been clearly stated in the goods receipt not.  Is the contention of the transporter tenable? Explain briefly?                                                               (5 Marks)

Q.22.       With reference to the provisions of the Consumer Protection Act, 1986, decide the following giving reasons in support of your answer.

1. i) Sukh Dukh Ltd. dispatched certain consignments of goods by road through Fastrack Roadways Ltd. The goods were unloaded and stored in a godown enroute on the suggestion of consignee. A fire broke out in the neighbouring godown spread to the godown and goods were destroyed.  The Fastrack Roadways Ltd. claimed that there was neither negligence nor deficiency in service on their part and goods were being carried at “Owner risk” and since no special premium was paid, they were not responsible for the loss caused by fire.  Whether Fastrack Roadways Ltd. is liable to pay damages to consignor?
2. ii) Life Insurance Corporation (LIC) formulated a scheme called ‘salary saving scheme’ under which employees of an organisation could buy an insurance policy. Premium due on each policy was collected by the employer from the salary of the employees nor did it issue any premium notice.  When the widow of the deceased employee made a claim to LIC on the death of her husband, the LIC repudiated the claim on the ground that four installments of premium had not been paid.  The widow was approached the consumer forum for redressal. Is the LIC liable for deficiency in service? Explain?

iii)   Raman booked a ticket from Delhi to New York by Lufthansa Airlines.  The airport authorities in New Delhi did not find any fault in his visa and other documents.  However, at Frankfurt airport authorities instituted proceedings of verification because of which Raman missed his flight to New York.  After necessary verification, Raman was able to reach New York by the next flight.  The airline authorities’ tendered apology to Raman for the inconvenience caused to him and also paid as goodwill gesture a sum of Rs. 5,000.  Raman intends to institute proceedings under the Consumer Protection Act, 1986 against Lufthansa Airlines for deficiency in service.  Will he succeed?                                                         (10 Marks )

Q.23.       With reference to the provisions of the Consumer Protection Act, 1986, decide the following giving reasons in support of your answer.

1. i) Sohn sent all relevant documents in an envelope regarding consignment of goods to a buyer in the USA through Fast Service Couriers. The documents did not reach the buyer as a consequence of which the buyer could not take delivery of the goods.  By the time the duplicate copies of the document had been received by the buyer, the season of the goods was over.  He claimed that he had suffered a loss of US $ 5,000 as a result of the negligence of the courier.  The State Commission ordered the payment to be made by the Fast Service Couriers, but the National Commission in appeal reversed the order and ordered payment of US $ 100 only as per the receipt issued by the Fast Service Courier to the consignor at the time of the dispatch of the latter.  Advise Sohan.
2. ii) Mahesh purchased a machine from Astute Ltd. to operate it himself for earning his liverhood. He took the assistance of a person to assist him in operating the machine.  The machine developed fault during the warranty period. He filed a claim in the consumer forum against the company for deficiency in service.  Astute Ltd. alleged that Mahesh did not operate the machine himself but had appointed a person exclusively to operate the machine.  Will Mahesh succeed?

iii)   Pillai purchased a car by taking a loan from Kerala cooperative Bank Ltd. and gave post-dated cheques to the bank not only in respect of repayment of loan instalments but also of premium of insurance policy for two succeeding years. On the expiry of the policy.  Pillai’s car met with an accident.  Will Pillai succeed in getting a claim against the

Bank       ?                                                                       (10 Marks)                                                             

ISTM GMS EXAM QUESTION AND ANSWER PROVIDED WHATSAPP 91 9924764558

ISTM GMS EXAM QUESTION AND ANSWER

ISTM GMS EXAM QUESTION AND ANSWER PROVIDED

CONTACT

DR. PRASANTH BE BBA MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Course : Graduate Programme in Management Studies (GMS)
Subject : Business Communication
Answer the following question.
Q1. What is Communication policy? What are its Specifications (10 marks)
Q2. Write notes on Intended form ,Block form and Modified Block form (10 marks)
Q3. What are the dis-advantages of Oral Communication. (10 marks)
Q4. What are the advantages of Oral Communication ? (10 marks)
Q5. What are the techniques for writing Successful job application (10 marks)
Q6. Which are the areas where participants have to play an important role in a meeting (10 marks)
Q7. What are the Steps to a Successful Presentation? Explain (10 marks)
Q8. What are the factors influencing Organizational Communication. (10 marks)

Subject : Business Ethics
Answer the following question.
Q1. Give importance of media in guiding citizens. (10 marks)
Q2. Give characteristic of quality leadership. (10 marks)
Q3. Write a note on Consumer Safety. (10 marks)
Q4. Give a note on Human culture. (10 marks)
Q5. Discuss unethical practices vis-à-vis cheating. (10 marks)
Q6. What are some ethical problems in business. (10 marks)
Q7. Write a note on human culture and civilization. (10 marks)
Q8. Discuss social justice according to gandhiji. (10 marks)

Subject : Corporate Law
Answer the following question.
Q1. Distinguish cheque and Bill of Exchange (10 marks)
Q2. How to resolve disputes . (10 marks)
Q3. State procedure of investigation of combination . (10 marks)
Q4. differentiate between offer and invitation to offer. (10 marks)
Q5. What are the circumstances in which a contract is not discharged on the ground of subsequent . (10 marks)
Q6. What are different segments constituting environment of business. (10 marks)
Q7. What is possession and retention of foreign currency. (10 marks)
Q8. What are powers of RBI to inspect authorized person . (10 marks)

Subject : Financial and Cost Accounting
Answer the following question.
Q1. What are the advantages of cost audit? (10
marks)
Q2. Define Budgetary Control and explain the pre-requisites for its successful introduction and implementation? (10
marks)
Q3. How cost accounting is superior over financial accounting? Explain the techniques of costing and their application
and suitability.
(10
marks)
Q4. What do you mean by installation of costing system? Explain the practical difficulties involved in installing such a
system in a manufacturing concern
(10
marks)
Q5. Cost accounting has become an essential tool of management. Mention the steps to be taken while installing cost
accounting system in a manufacturing concern.
(10
marks)
Q6. Define cost accounting and bring out the differences between cost accounts and Financial accounts. (10
marks)
Q7. Define “Costing”, “Cost” and “Cost Accountancy”. Distinguish between cost accounting and financial accounting (10
marks)
Q8. What is the different between cost accounting and management accounting? (10
marks)

Subject : General Management
Answer the following question.
Q1. What are the techniques of coordination? (10 marks)
Q2. Explain Change model (10 marks)
Q3. What are the prerequisites for effective Human resource planning? (10 marks)
Q4. What are the steps in planning process? (10 marks)
Q5. What are communication network? (10 marks)
Q6. What are the benefits of sound organization structure? (10 marks)
Q7. Write a note on WTO (10 marks)
Q8. What are the classification of managerial functions? (10 marks)

Subject : International Business
Answer the following question.
Q1. Explain the types of data collected during marketing research. (10 marks)
Q2. Explain the types of data collected during marketing research. (10 marks)
Q3. What political risks are associated with FDI ? (10 marks)
Q4. Explain entry strategy and entry analysis in international business. (10 marks)
Q5. Explain Methods for Setting the International Advertising Budget. (10 marks)
Q6. Write the difference between international trade and marketing. (10 marks)
Q7. Explain David Ricardo’s comparative advantage theory. (10 marks)
Q8. What are the benefits to customer/ vendors derived from IT projects by BPCL? (10 marks)

Subject : Operation Management
Answer the following question.
Q1. What do you see as the main problem with qualitative (judgmental) forecasts? Are they ever better than “objective”
methods.
(10
marks)
Q2. Magusa Metal Works produces cast bronze valves on an assembly line. On a recent day, 160 valves were produced
during an 8-hour shift. Calculate the productivity of the line.
(10
marks)
Q3. What factors distinguish between production and service operations? (10
marks)
Q4.
Ahmet grows domatoes in his 100 by 100 meters garden. He then sells the crop at the local farmer’s market. Two
summers ago, he was able to produce and sell 1200 kgs of tomatoes. Last summer, he tried a new fertilizer that
promised a 20% increase in yield. He harvested 1350 kgs. Did the fertilizer live up to its promise.
(10
marks)
Q5. List four basic operations strategies. (10
marks)
Q6. Describe briefly the steps to develop a forecasting system. (10
marks)
Q7. What is ISO-9000 Series Standards? List key quality awards. (10
marks)
Q8. Is there a difference between forecasting demand and forecasting sales. (10
marks)

Subject : Operations Management
Answer the following question.
Q1. What is ISO-9000 Series Standards? List key quality awards. (10 marks)
Q2. Describe total quality management (TQM). (10 marks)
Q3. What are the major components of a production system? Give two examples. (10 marks)
Q4. . What are the major decision areas in P/OM? (10 marks)
Q5. What factors distinguish between production and service operations? (10 marks)
Q6. Describe briefly the “Delphi Method”. (10 marks)
Q7. A Turkish manufacturing company operating a subsidiary in TRNC shows the following results: (10 marks)
Q8. “Expenditure’ incurred for advertising is wasteful. Its results are unpredictable”. Comment. (10 marks)

Subject : Total Quality Management
Answer the following question.
Q1. Describe how the golden rule does or does not influence each of the six concepts of TQM? (10 marks)
Q2. Describe two ways to determine a superior process? (10 marks)
Q3. Why are the product evaluation standards in the development stage? (10 marks)
Q4. What is the best way to improve market share for a product or service? (10 marks)
Q5. Why has e-Commerce grown so quickly? (10 marks)
Q6. Discuss the advantages of an empowered team? (10 marks)
Q7. Briefly describe the purpose of an ISO 9000 quality system? (10 marks)
Q8. What is the overall aim of the EMS Standard? (10 marks)

Entrepreneurship IIBMS EXAM QUESTION AND ANSWER PROVIDED WHATSAPP 91 9924764558

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Entrepreneurship IIBMS EXAM QUESTION AND ANSWER PROVIDED

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DR. PRASANTH BE BBA MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Attempt Any Four Case Studies

Case I

PROVIDE ADVICE TO AN ENTREPRENEUR ABOUT INTELLECTUAL PROPERTY PROTECTION

Locked doors and a security system protect your equipment, inventory and payroll. But what protects your business’s most valuable possessions? IP laws can protect your trade secrets, trademarks and product design, provided you take the proper steps. Chicago attorney Kara E.F. Cenar of Welsh and Katz, an IP firm, contends that businesses should start thinking about these issues earlier than most do. “Small businesses tend to delay securing IP protection because of the expense,” Cenar says. “They tend not to see the value of IP until a competitor infringes.” But a business that hasn’t applied for copyrights or patents and actively defended tem will likely have trouble making its case in court.

One reason many business owners don’t protect their intellectual property is that they don’t recognize the value of the intangibles they own. Cenar advises business owners to take their business plans to an experienced IP attorney and discuss how to deal with these issues. Spending money upfront for legal help can save a great deal later by giving you strong copyright or trademark rights, which can deter competitors from infringing and avoid litigation later.

Once you’ve figured out what’s worth protecting, you have to decide how to protect it. That isn’t always obvious. Traditionally, patents prohibit others from copying new devices and processes, while copyrights do the same for creative endeavors such as books, music and software. In many cases, though, the categories overlap. Likewise, trademark law now extends to such distinctive elements as a product’s color and shape. Trade dress laws concerns how the product is packaged and advertised. You might be able to choose what kind of protection to seek.

For instance, one of Welsh & Katz’s clients is Ty Inc., maker of plush toys. Before launching the Beanie Baby line, Cenar explains, the owners brought in business and marketing plans to discuss IP issues. The plan was for a limited number of toys in a variety of styles, and no advertising except word-of-mouth. Getting a patent on a plush toy might have been impossible and would have taken several years, too long for easily copied toys. Trademark and trade dress protection wouldn’t help much, because the company planned a variety of styles. But copyrights are available for sculptural art, and they’re inexpensive and easy to obtain. The company chose to register copyrights and defend them vigorously. Cenar’s firm has fended off numerous knockoffs.

That’s the next step: monitoring the market-place for knockoffs and trademark infringement, and taking increasingly firm steps to enforce your rights. Efforts typically begin with a letter of warning and could end with a court-ordered cease-and-desist order or even an award of damages. “If you don’t take the time to enforce [your trademark], it becomes a very weak mark,” Cenar says. But a strong mark deters infringement, wins lawsuits and gets people to settle early.” Sleep on your rights, and you’’’ lose them. Be proactive, and you’ll protect them – and save money in the long run.

An inventor with a newly invented technology comes to you for advice on the following matters:

Questions:

1. In running this new venture, I need to invest al available resources in producing the products and attracting customers. How important is it for me to divert money from those efforts to protect my intellectual property?

2. I have sufficient resources to obtain intellectual property protection, but how effective is that protection without a large stock of resources to invest in going after those that infringe on my rights? If I do not have the resources to defend a patent, is it worth obtaining one in the first place?

3. Are there circumstances when it is better for me not to be an innovator but rather produce “knock-offs” of other innovations?

Case II - Provide advice to an entrepreneur about firing employees

Firing an employee is a messy business. Just the thought of having to recruit, train and manage a new sales soul is enough to keep some sales managers from following through with the task. But holding on to a salesperson who’s not performing or who’s disruptive to the team is guaranteed to exacerbate matters down the road. But how do you know when it’s time to say “you’ve gotta go”? It’s simple, according to Tricia Timkin: “Lack of production, lack of production, lack of production,” says the president of Padigent, a Carol Stream, Illinois, human resources consulting firm for emerging companies.

Dave Anderson, president of Dave Anderson’s Learn to Lead, concurs that performance is one criterion for firing. Anderson, whose Los Altos, California, company offers sales, management and leadership consulting, thinks reps who are “dishonest, selfish or disrespectful” should face the axe.

You may fear firing a rep will cause a morale dip in the troops. After all, someone’s buddy is getting shown the door. But making a tough choice can bolster the spirits of your sales squad. Says Tamkin: “Firing can positively affect morale [because] it sends a message that the company will take strong measures to ensure the success of the organization. Poor performers lower the morale of the team, and they continually break momentum and diminish the credibility of the sales manager.

Before firing, however, steps must be taken to legally protect your business. It’s crucial that the employee has been warned in advance in writing. Coaching sessions with failing sales people will help protect you when it comes time to separate. Tamkin advises that documentation must be developed in advance of the firing, and that when it comes time for the employee to go, the manger should conduct an exit interview. Though firing will never be a savory part of a manager’s job description, it’s short – term pain for long – term gain. “Managers have to realize that when they keep the wrong person,” Anderson says, “there’s more damage to the company than just lack of production.”

Here are some firing guidelines from William Skip Miller’s ProActive Sales Management (AMACOM):

1. Never in your office: if it’s your office, you can’t leave if the employee wants to stay and talk.
2. Short and Sweet: As you walk in the door, say, “The reason I’m here is to tell this is your last day of employment with this company.” Just get it out.
3. Never on a Friday: If fired on a Friday, the employee can’t start the process of feeling good. All he or she can do is stew about it over the weekend.
4. Outside help: If the employee says he or she has consulted an attorney or other legal counsel, stop the conversation immediately and consult your HR department or attorney, whoever helped you draft your company policy.
5. No hanging around: Personal effects can be retrieved, but have the person leave the building.

Advice to an entrepreneur:

An entrepreneur, whose business has stopped growing, has read the above article and comes to you for advice:

1. Gee, these managers discussed in the article are a bit rough. Even if one particular person is not producing as expected, doesn’t this person still deserve to be treated with respect?

2. It appears that the automatic assumption is that the employee is at fault for not performing and therefore should be fired. But shouldn’t the responsibility fall on me as the manager and the system that I have introduced? Maybe the person is performing as well as the situation allows?

3. How am I to build team spirit within my small company when I single out one person for lack of production and fire him or her?

Case III - Provide advice to an entrepreneur about small business investment companies

It started out as a straightforward consulting project for Mahendra Vora and research partner Sundar Kadaya. They were analyzing software trends and perusing market research studies to assess the size of various software markets. But after spending 40 hours looking for information that should have taken 10 minutes to access, the pair concluded that more advanced tools were needed to search the internet and databases of public information. Within months, they launched Intelliseek Inc., providing software to capture, track and analyze information for use in strategic planning, market research, product development and brand marketing. Vora, 39, was no stranger to start-ups. By the time he co-founded Intelliseek in 1997, he already had three business launches under his belt. He sold all three to Fortune 500 firms, providing capital for Intelliseek. His initial investment of a few million dollars supported operations the first couple of years and through two major product launches.

By 1999, the Cincinnati Company was laying the groundwork for its first round of venture capital.Vora had had two years to contemplate his dream investor. Foremost, size did matter: The venture capitalist should have the wherewithal for ongoing financing, but not be so large that it shunned all but elaborate business models. Finding an investor with a broad network of investing partners also was important to the $10million company. “If you become wildly successful and plan to raise $50 million someday, then [the investor] should have access to the big investors. The network is also important because it can [introduce] you to customers,” says Vora, whose clients include CBS, Ford Motor Co. and Nokia. Finally, Vora was looking for operational experience. “A lot of VCs are phenomenal in advising you about what to do, but they’ve never done it themselves,” he observes. Vora ultimately found his venture match in Cincinnati-based River Cities Capital Funds, a small business investment company. While River Cities was not large, it was well-connected and managed by industry veterans with extensive professional experience.

Starting Small

Licensed and regulated by the SBA, SBICs are generally organized and operated like any other venture capital fund. But unlike traditional funds, SBICs use their own capital and long-term loans to small companies. On the whole, SBICs tend to be more risk-tolerant than banks or traditional venture capitalists….Inteliseek’s SBIC banker removed barriers to reaching larger, mainstream investors. Led by river cities capital funds, the initial $6 million investment included capital from the venture arm of Nokia; later investors included Ford Motor Co. and General Atlantic Partners LLC. “once you get a VC like River Cities, it is much easier to get access to bigger VCs,” says Vora. “They can go to VCs and say ‘One of our companies is doing so well, we’re going to put in more money, and you guys should come in’.”

Down But Not Out

SBICs invested roughly $2.8 billion in about 2,100 companies in the 12-month period ending September 30, 2002 down from $4.6 billion invested in 2,254 companies in the same period one year earlier. Like mainstream investors, they have had to adjust to deteriorating economic conditions.  “Valuations have come down on deals, and due diligence periods have increased,” says Patrick Hamner, vice resident of Capital Southwest Corp., a Dallas-based SBIC. “People are being far more discriminating in how they invest their capital.”

“The bar has been raised even more for small businesses trying to get capital,” he continues. “As opposed to the overall venture industry, which has had a very marked decline in financing activity, SBICs are down but still active.”

Nor has quality been an overriding concern, even as SBICs engage in riskier deals than their mainstream counterparts. “Part of what has happened with the bursting of the bubble is that the ideas being proposed are based on more substantive models,” says Edwin Robinson, managing director of River Cities Capital Funds. “A lot of the excess is being wrung out the system.” While the venture shakeup has impacted conventional the way some SBICs operate. “During the bubble years, there was probably more of an inclination to overfund,” says NASBICs Mercer. “I don’t mean in  the sense that money might not be justified, but to make the unconditional investment. I suspect that what you’re seeing now is a lot more investing on a milestone basis.” For instance, a company that requires $3 million over three years is likely to receive $1 million upfront, getting the rest after meeting revenue and growth targets. Fewer venture dollars, coupled with the banking industry’s reticence to lend to small businesses, has contributed to an overall capital shortage, adds Mercer. “Banks that had been out a little bit further on the risk curve than they probably normally do,” he says. “The banks’ own proclivity and the regulators kind of forced a pullback, so there has been a tremendous pullback in bank credit availability even for small businesses that have had long time banking relationships.”

The SBIC program, meanwhile, is attracting mainstream investors having difficulty raising capital for venture-backed investments. The increased interest bodes well for the small firms that SBICs target: companies with a net worth of less than $18 million and average after-tax earning of less than $6 million for the past two years.

Advice to an entrepreneur

An entrepreneur, who is an owner manager of a small business and looking to raise $4,00,000, has read the above article and comes to you for advice:

1. What are the advantages of going to an SBIC over and above a business angle or venture capitalist?
2. What are the disadvantages and how can they be minimized?

Case IV -Provide advice to an entrepreneur about being more innovative

When Neil Franklin began offering round-the-clock telephone customer service in 1998, customers loved it. The offering fit the strategic direction Franklin had in mind for Dataworkforce, his Dallas-based telecommunications – engineer staffing agency, so he invested in a phone system to route after hours calls to his 10 employees’ home and mobile phones. Today, Franklin, 38, has nearly 50 employees and continues to explore ways to improve Dataworkforce’s service. Twenty-four-hour phone service has stayed, but other trials have not. One failure was developing individual Web sites for each customer. “We took it too far and spent $30,000 then abandoned it,” Franklin recalls. A try at globally extending the brand by advertising in major world cities was also dropped. “It worked pretty well,” Franklin says, “until you added up the cost.”

Franklin’s efforts are similar to an approach called “portfolios of initiatives” strategy. The idea, according to Lowell Bryan, a principal in McKinney & Co., the NYC consulting firm that developed it, is to always have a number of efforts underway to offer new products and services, attack new markets or otherwise implement strategies, and to actively manage these experiments so you don’t miss an opportunity or over commit to an unproven idea.

The portfolio of initiatives approach addresses a weakness of conventional business plans-that they make assumptions about uncertain future developments, such as market and technological trends, customer responses, sales and competitor reactions. Bryan compares the portfolio of initiatives strategy to the ship convoys used in World War II to get supplies across oceans. By assembling groups of military and transport vessels and sending them in a mutually supportive group, planners could rely on at least some reaching their destination. In the same way, entrepreneurs with a portfolio of initiatives can expect some of them to pan out.

Making a Plan

Three steps define the portfolio of initiatives approach. First, you search for initiatives in which you have or can readily acquire a familiarity advantage – meaning you know more than competitors about a business. You can gain familiarity advantage using low-cost pilot programs and experiments, or by partnering with more knowledgeable allies. Avoid business in which you can’t acquire a familiarity advantage, Bryan says.

After you identify familiarity-advantaged initiatives, began investing in them using a disciplined, dynamic management approach. Pay attention to how initiatives relate to each other. They should be diverse enough that the failure of one wont endanger the others, but should also all fit into your overall strategic direction. Investments, represented by product development efforts, pilot programs, market tests and the like, should start small and increase only as they prove themselves. Avoid over investing before initiatives have proved themselves. The third step is to pull the plug on initiatives that aren’t working out, and step up investment in others. A portfolio of initiatives will work in any size company. Franklin pursues 20 to 30 at any time, knowing 90 percent wont pan out, “The main idea is to keep those initiatives running,” he says. “If you don’t, you’re slowing down.”

Advice to an entrepreneur

An entrepreneur, who wants his firm to be more innovative, has read the above article and come to you for advice:

1. This whole idea of experimentation seems to make sense, but all those little failures can add up, and if there enough of them, then this could lead to one big failure-the business going down the drain. How can I best get the advantages of experimentation in terms of innovation while also reduction the costs so that I don’t run the risk of losing my business?
2. My employees, buyers, and suppliers like working for my company because we have a lot of wins. I am not sure how they will take it when our company begins to have a lot more failures (even if those failures are small)- it is a psychological thing. How can I handle this trade-off?
3. Even if everyone else accepts it, I am not sure how I will cope. When projects fail it hits me pretty hard emotionally. Is it just that I am not cut out for this type of approach?

Case V - PROVIDE ADVICE TO AN ENTREPRENEUR ABOUT NONTRADITIONAL FINANCING

When Lissa D’Aquanni created a gourmet chocolate business in her Albany, New York, basement in 1998, she had not only a passion for candy-making, but also a knack for spurring citizen involvement. The former nonprofit executive had worked for women’s advocacy groups, most recently promoting breast cancer awareness. If there was one thing she knew, it was how to rally community support.

Her ability to leverage local resources would be invaluable as she made her business a fixture of her Albany neighborhood. And in no area were those skills as critical as in financing last year, D’Aquanni wanted to move her business, the chocolate Gecko, to an abandoned building three blocks away, she needed $25,000.” Volunteers also helped renovate the building, cutting project costs form an estimated $3,00,000.

Check out D’Aquanni’s unorthodox and creative financing plan: An economic development group, the Albany Local Development Corp., loaned her $95,000 to buy the building. D’Aquanni obtained a $1,00,000 government guaranteed loan from a local credit union to renovate the structure. Façade improvements were funded through a matching grant program to encourage commercial development in Albany. A local community development financial institution used a state program to fund energy-efficient upgrades, including new windows, light fixtures, furnaces and siding. Says D’Aquanni, “ There were lots of different pieces of the puzzle to identify and figure out how to access.”

Conventional financing wasn’t an option. “I was looking at a business that did about $44,000 in sales doing a $260,000 project, and the traditional funders were apprehensive,” explains D’Aquanni, 37. They urged her to rent a storefront rather than buy the rundown building. Undeterred, D’Aquanni met with a neighborhood group to develop her expansion plan. It wasn’t the first time the community had helped out. In 1999, the cashstrapped chocolatier needed molds and a temperer for the Christmas rush. Recalling a strategy she had seen in a magazine, she sold discounted gift certificates to raise capital. D’Aquanni offered customers $25 in free chocolates for every $100 in gift certificates purchase. “A lot of folks mailed them as gifts to friends, family and co-workers,” D’Aquanni says. “ And most of those people ordered chocolates. My customer base expanded.”

Indeed, many entrepreneurs successfully launch a business only to encounter funding hardships as they attempt to grow. The ability to think outside the box, experts say, is critical for firms short on funding. “There are pockets of money out there, whether it be municipalities, counties, chambers of commerce,” says Bill Brigham, Director of the Small Business Development Center in Albany. “Those are the loan programs that no one seems to have information about. A lot of these programs will not require the collateral and cash that is typical of traditional [loans]. They may be a little more lenient as far as credit history goes. That’s one of the key roles we can play-what entrepreneur is going to think [he or she] can qualify for HUD money?

Advice to an entrepreneur

An entrepreneur, who is looking to expand but has limited access to traditional financing, has read the above article and comes to you for advice:

1. I want to find a little pot of gold like Lissa D’Aquanni. Where should I look?
2. I like the gift certificate idea to raise money and build my business. What other types of products do you think that approach will work for?
3. Over the years I have paid a lot of taxes. Should I feel guilty for accessing government – subsidized monies to build my business, or should I feel justified?

BUSINESS ENVIRONMENT IIBMS EXAM QUESTION AND ANSWER PROVIDED WHATSAPP 91 9924764558

BUSINESS ENVIRONMENT IIBMS EXAM ANSWER

BUSINESS ENVIRONMENT IIBMS EXAM QUESTION AND ANSWER PROVIDED

CONTACT

DR. PRASANTH BE BBA MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Attempt Any Four Case Study

Case Study 1 : Structuring global companies

As the chapter illustrates, to carry out their activities in pursuit of their objectives, virtually all organisations adopt some form of organisational structure. One traditional method of organisation is to group individuals by function or purpose, using a departmental structure to allocate individuals to their specialist areas (e.g. Marketing, HRM and so on ). Another is to group activities by product or service, with each product group normally responsible for providing its own functional requirements. A third is to combine the two in the form of a matrix structure with its vertical and horizontal flows of responsibility and authority, a method of organisation much favoured in university Business Schools.

What of companies with a global reach: how do they usually organise them-
selves?

Writing in the Financial Times in November 2000 Julian Birkinshaw, Associate Professor of Strategic and International Management at London Business School, identifies four basic models of global company structure:

• The International Division - an arrangement in which the company establishes a
  separate division  to  deal  with  business  outside  its  own  country.  The
                  International Division would typically be concerned with tariff and trade issues,
                  foreign agents/partners and other aspects involved in selling overseas. Normally
                  the division does not make anything itself, it is simply responsible for interna-
                  tional sales. This arrangement tends to be found in medium-sized companies
                  with limited international sales.

The Global Product Division - a product-based structure with managers responsible
                for their product line globally. The company is split into a number of global busi-
                nesses arranged by product (or service) and usually overseen by their own
                president. It has been a favoured structure among large global companies such as
                BP, Siemens and 3M.

• The Area Division - a geographically based structure in which the major line of
  authority lies with the country (e.g. Germany) or regional (e.g. Europe) manager who
  is responsible for the different product offerings within her/his geographical area.
  ● The Global Matrix - as the name suggests a hybrid of the two previous structural
                  types. In the global matrix each business manager reports to two bosses, one
                  responsible for the global product and one for the country/region. As we indi-
                  cated in the previous edition of this book, this type of structure tends to come
                  into and go out of fashion. Ford, for example, adopted a matrix structure in the
                  later 1990s, while a number of other global companies were either streamlining
                  or dismantling theirs (e.g. Shell, BP, IBM).

As Professor Birkinshaw indicates, ultimately there is no perfect structure and organisations tend to change their approach over time according to changing circumstances,  fads,  the  perceived  needs  of  the  senior  executives  or  the predispositions of powerful individuals. This observation is no less true of universities than it is of traditional businesses.

Case study questions

1. Professor Birkinshaw’s article identifies the advantages and disadvantages of being a global business. What are his major arguments?

2. In your opinion what are likely to be the key factors determining how a global company will organise itself?

Case 2 : Resource prices

As we saw in Chapter 1, resources such as labour, technology and raw materials
constitute inputs into the production process that are utilised by organisations to
produce outputs. Apart from concerns over the quality, quantity and availability of
the different factors of production, businesses are also interested in the issue of
input prices since these represent costs to the organisation which ultimately have
to be met from revenues if the business is to survive. As in any other market, the
prices of economic resources can change over time for a variety of reasons, most, if
not all, of which are outside the direct control of business organisations. Such fluc-
tuations in input prices can be illustrated by the following examples:

• Rising labour costs - e.g. rises in wages or salaries and other labour-related costs
  (such as pension contributions or healthcare schemes) that are not offset by
  increases in productivity or changes in working practices. Labour costs could rise
                  for a variety of reasons including skills shortages, demographic pressures, the
                  introduction of a national minimum wage or workers seeking to maintain their
                  living standards in an inflationary period.
• Rising raw material costs - e.g. caused by increases in the demand for certain raw
  materials and/or shortages (or bottlenecks) in supply. It can also be the result of
  the need to switch to more expensive raw material sources because of customer
                  pressure, environmental considerations or lack of availability.
• Rising energy costs - e.g. caused by demand and/or supply problems as in the oil
  market in recent years, with growth in India and China helping to push up
  demand and coinciding with supply difficulties linked to events such as the war
                  in Iraq, hurricanes in the Gulf of Mexico or decisions by OPEC.
  ● Increases in the cost of purchasing new technology/capital equipment - e.g.
                  caused by the need to compete with rivals or to meet more stringent government
                  regulations in areas such as health and safety or the environment.

As the above examples illustrate, rising input prices can be the result of factors operating at both the micro and macro level and these can range from events which are linked to natural causes to developments of a political, social and/or economic kind. While many of these influences in the business environment are uncontrollable, there are steps business organisations can (and do) often take to address the issue of rising input prices that may threaten their competitiveness. Examples include the following:

• Seeking cheaper sources of labour (e.g. Dyson moved its production of vacuum
  cleaners to the Far East).
• Abandoning salary-linked pension schemes or other fringe benefits (e.g. com-
  pany cars, healthcare provisions, paid holidays).
• Outsourcing certain activities (e.g. using call centres to handle customer com-
  plaints, or outsourcing services such as security, catering, cleaning, payroll, etc.). ● Switching raw materials or energy suppliers (e.g. to take advantage of discounts

by entering into longer agreements to purchase).

• Energy-saving measures (e.g. through better insulation, more regular servicing of
  equipment, product and/or process redesign).
• Productivity gains (e.g. introducing incentive schemes).

In addition to measures such as these, some organisations seek cost savings through
divestment of parts of the business or alternatively through merger or takeover
activity. In the former case the aim tends to be to focus on the organisation’s core
products/services and to shed unprofitable and/or costly activities; in the latter the
objective is usually to take advantage of economies of scale, particularly those asso-
ciated with purchasing, marketing, administration and financing the business.

Case study questions

1. If a company is considering switching production to a country where wage costs
   are lower, what other factors will it need to take into account before doing so?

2. Will increased environmental standards imposed by government on businesses
   inevitably result in higher business costs?

Case 3 : Government and business - friend or foe?

As we have seen, governments intervene in the day-to-day working of the economy
in a variety of ways in the hope of improving the environment in which industrial
and commercial activity takes place. How far they are successful in achieving this
goal is open to question. Businesses, for example, frequently complain of over-
interference  by  governments  and  of  the  burdens  imposed  upon  them  by
government legislation and regulation. Ministers, in contrast, tend to stress how
they have helped to create an environment conducive to entrepreneurial activity
through the different policy initiatives and through a supportive legal and fiscal
regime. Who is right?

While there is no simple answer to this question, it is instructive to examine the
different surveys which are regularly undertaken of business attitudes and condi-
tions in different countries. One such survey by the European Commission - and
reported by Andrew Osborn in the Guardian on 20 November 2001 - claimed that
whereas countries such as Finland, Luxembourg, Portugal and the Netherlands
tended to be regarded as business-friendly, the United Kingdom was perceived as
the most difficult and complicated country to do business with in the whole of
Europe. Foreign firms evidently claimed that the UK was harder to trade with than
other countries owing to its bureaucratic procedures and its tendency to rigidly
enforce business regulations. EU officials singled out Britain’s complex tax formali-
ties, employment regulations and product conformity rules as particular problems
for foreign companies - criticisms which echo those of the CBI and other represen-
tative bodies who have been complaining of the cost of over-regulation to UK firms
over a considerable number of years.

The news, however, is not all bad. The Competitive Alternatives study (2002) by
KPMG of costs in various cities in the G7 countries, Austria and the Netherlands
indicated that Britain is the second cheapest place in which to do business in the
nine industrial countries (see www.competitivealternatives.com). The survey, which
looked at a range of business costs - especially labour costs and taxation -, placed
the UK second behind Canada world-wide and in first place within Europe. The
country’s strong showing largely reflected its competitive labour costs, with manu-
facturing costs estimated to be 12.5 per cent lower than in Germany and 20 per
cent lower than many other countries in continental Europe. Since firms frequently
use this survey to identify the best places to locate their business, the data on rela-
tive costs are likely to provide the UK with a competitive advantage in the battle for
foreign inward investment (see Mini case, above).

Case study questions

1. How would you account for the difference in perspective between firms who often
   complain of government over-interference in business matters and ministers who
   claim that they have the interests of business at heart when taking decisions?

2. To what extent do you think that relative costs are the critical factor in determining
   inward investment decisions?

Case 4 : The end of the block exemption

As we have seen in the chapter, governments frequently use laws and regulations to promote competition within the marketplace in the belief that this has significant benefits for the consumer and for the economy generally. Such interventions occur not only at national level, but also in situations where governments work together to provide mutual benefits, as in the European Union’s attempts to set up a ‘Single Market’ across the member states of the EU.

While few would deny that competitive markets have many benefits, the search
for increased competition at national level and beyond can sometimes be
restrained by the political realities of the situation, a point underlined by a previous
decision of the EU authorities to allow a block exemption from the normal rules of
competition in the EU car market. Under this system, motor manufacturers operat-
ing within the EU were permitted to create networks of selective and exclusive dealerships and to engage in certain other activities normally outlawed under the competition provisions of the single market. It was argued that the system of selective and exclusive distribution (SED) benefited consumers by providing them with a cradle-to-grave service, alongside what was said to be a highly competitive supply situation within the heavily branded global car market.

Introduced in 1995, and extended until the end of September 2002, the block
exemption was highly criticised for its impact on the operation of the car market in
Europe. Following a critical report by the UK competition authorities in April 2000,
the EU published a review (in November 2000) of the workings of the existing
arrangement for distributing and servicing cars, highlighting its adverse conse-
quences for both consumers and retailers and signalling the need for change. Despite
intensive lobbying by the major car manufacturers, and by some national govern-
ments, to maintain the current rules largely intact, the European Commission
announced its intention of replacing the block exemption regulation when it expired
in September, subject of course to consultation with interested parties.

In essence the Commission’s proposals aimed to give dealers far more independ-
ence from suppliers by allowing them to solicit for business anywhere in the EU
and to open showrooms wherever they want; they would also be able to sell cars
supplied by different manufacturers under the same roof. The plan also sought to
open up the aftersales market by breaking the tie which existed between sales and
servicing. The proposal was that independent repairers would in future be able to
get greater access to the necessary spare parts and technology, thereby encouraging
new entrants to join the market with reduced initial investment costs.

While these proposals were broadly welcomed by groups representing consumers
(e.g. the Consumer Association in the UK), some observers felt that the planned
reforms did not go far enough to weaken the power of the suppliers over the market
(see e.g. the editorial in the Financial Times, 11 January 2002). For instance it
appeared to be the case that while manufacturers would be able to supply cars to
supermarkets and other new retailers, they would not be required by law to do so,
suggesting that a market free-for-all was highly unlikely to emerge in the foreseeable
future. Equally the Commission’s plans appeared to do little to protect dealers from
threats to terminate their franchises should there be a dispute with the supplier.

In the event the old block exemption scheme expired at the end of September
2002 and the new rules began the next day. However, the majority of the provisions
under the EC rules did not come into effect until the following October (2003) and
the ban on ‘location clauses’ - which limit the geographical scope of dealer opera-
tions - only came into effect two years later. Since October 2005 dealers have been
free to set up secondary sales outlets in other areas of the EU, as well as their own
countries. This is expected to stengthen competition between dealers across the
Single Market to the advantage of consumers (e.g. greater choice and reduced prices).

Case study questions

1. Can you suggest any reasons why the European Commission was willing to grant
   the block exemption in the first place, given that it ran counter to its proposals for
   a Single Market?

2. Why might the new reforms make cars cheaper for European consumers?

Case 5 : The sale of goods on the Internet

The sale of consumer goods on the Internet (particularly those between European member states) raises a number of legal issues. First, there is the issue of trust, with-
out which the consumer will not buy; they will need assurance that the seller is genuine, and that they will get the goods that they believe they have ordered.
Second, there is the issue of consumer rights with respect to the goods in question: what rights exist and do they vary across Europe? Last, the issue of enforcement: what happens should anything go wrong?

Information and trust

Europe recognises the problems of doing business across the Internet or telephone
and it has attempted to address the main stumbling blocks via Directives. The
Consumer Protection (Distance Selling) Regulations 2000 attempts to address the
issues of trust in cross-border consumer sales, which may take place over the
Internet (or telephone). In short, the consumer needs to know quite a bit of infor-
mation, which they may otherwise have easy access to if they were buying face to
face. Regulation 7 requires inter alia for the seller to identify themselves and an
address must be provided if the goods are to be paid for in advance. Moreover, a
full description of the goods and the final price (inclusive of any taxes) must also
be provided. The seller must also inform the buyer of the right of cancellation available under Regulations 10-12, where the buyer has a right to cancel the contract for seven days starting on the day after the consumer receives the goods or services. Failure to inform the consumer of this right automatically extends the period to three months. The cost of returning goods is to be borne by the buyer, and the seller is entitled to deduct the costs directly flowing from recovery as a restocking fee. All of this places a considerable obligation on the seller; however, such data should stem many misunderstandings and so greatly assist consumer faith and confidence in non-face-to-face sales.

Another concern for the consumer is fraud. The consumer who has paid by
credit card will be protected by section 83 of the Consumer Credit Act 1974, under
which a consumer/purchaser is not liable for the debt incurred, if it has been run
up by a third party not acting as the agent of the buyer. The Distance Selling
Regulations extend this to debit cards, and remove the ability of the card issuer to
charge the consumer for the first £50 of loss (Regulation 21). Moreover, section 75
of the Consumer Credit Act 1974 also gives the consumer/buyer a like claim against
the credit card company for any misrepresentation or breach of contract by the
seller. This is extremely important in a distance selling transaction, where the seller
may disappear.

What quality and what rights?

The next issue relates to the quality that may be expected from goods bought over
the Internet. Clearly, if goods have been bought from abroad, the levels of quality
required in other jurisdictions may vary. It is for this reason that Europe has
attempted to standardise the issue of quality and consumer rights, with the
Consumer Guarantees Directive (1999/44/EC), thus continuing the push to encour-
age cross-border consumer purchases. The implementing Sale and Supply of Goods
to Consumer Regulations 2002 came into force in 2003, which not only lays down
minimum quality standards, but also provides a series of consumer remedies which
will be common across Europe. The Regulations further amend the Sale of Goods
Act 1979. The DTI, whose job it was to incorporate the Directive into domestic law
(by way of delegated legislation) ensured that the pre-existing consumer rights were
maintained, so as not to reduce the overall level of protection available to con-
sumers. The Directive requires goods to be of ‘normal’ quality, or fit for any
purpose made known by the seller. This has been taken to be the same as our pre-
existing ‘reasonable quality’ and ‘fitness for purpose’ obligations owed under
sections 14(2) and 14(3) of the Sale of Goods Act 1979. Moreover, the pre-existing
remedy of the short-term right to reject is also retained. This right provides the
buyer a short period of time to discover whether the goods are in conformity with
the contract. In practice, it is usually a matter of weeks at most. After that time has
elapsed, the consumer now has four new remedies that did not exist before, which
are provided in two pairs. These are repair or replacement, or price reduction or
rescission. The pre-existing law only gave the consumer a right to damages, which
would rarely be exercised in practice. (However, the Small Claims Court would
ensure a speedy and cheap means of redress for almost all claims brought.) Now
there is a right to a repair or a replacement, so that the consumer is not left with an
impractical action for damages over defective goods. The seller must also bear the
cost of return of the goods for repair. So such costs must now be factored into any

business sales plan. If neither of these remedies is suitable or actioned within a ‘rea-
sonable period of time’ then the consumer may rely on the second pair of
remedies. Price reduction permits the consumer to claim back a segment of the pur-
chase price if the goods are still useable. It is effectively a discount for defective
goods. Rescission permits the consumer to reject the goods, but does not get a full
refund, as they would under the short-term right to reject. Here money is knocked
off for ‘beneficial use’. This is akin to the pre-existing treatment for breaches of
durability, where goods have not lasted as long as goods of that type ought reason-
ably be expected to last. The level of compensation would take account of the use
that the consumer has (if any) been able to put the goods to and a deduction made
off the return of the purchase price. However, the issue that must be addressed is as
to the length of time that goods may be expected to last. A supplier may state the
length of the guarantee period, so a £500 television set guaranteed for one year
would have a life expectancy of one year. On the other hand, a consumer may
expect a television set to last ten years. Clearly, if the set went wrong after six
months, the consumer would only get £250 back if the retailer’s figure was used,
but would receive £475 if their own figure was used. It remains to be seen how this
provision will work in practice.

One problem with distance sales has been that of liability for goods which arrive
damaged. The pre-existing domestic law stated that risk would pass to the buyer once
the goods were handed over to a third-party carrier. This had the major problem in
practice of who would actually be liable for the damage. Carriers would blame the
supplier and vice versa. The consumer would be able to sue for the loss, if they were
able to determine which party was responsible. In practice, consumers usually went
uncompensated and such a worry has put many consumers off buying goods over the
Internet. The Sale and Supply of Goods to Consumer Regulations also modify the
transfer of risk, so that now the risk remains with the seller until actual delivery. This
will clearly lead to a slight increase in the supply of goods to consumers, with the
goods usually now being sent by insured delivery. However, this will avoid the prob-
lem of who is actually liable and should help to boost confidence.

Enforcement

Enforcement for domestic sales is relatively straightforward. Small-scale consumer
claims can be dealt with expeditiously and cheaply under the Small Claims Court.
Here claims under £5000 for contract-based claims are brought in a special court
intended to keep costs down by keeping the lawyers’ out of the court room, as a vic-
torious party cannot claim for their lawyers’ expenses. The judge will conduct the
case in a more ‘informal’ manner, and will seek to discover the legal issues by ques-
tioning both parties, so no formal knowledge of the law is required. The total cost of
such a case, even if it is lost, is the cost of issuing the proceedings (approximately

10 per cent of the value claimed) and the other side’s ‘reasonable expenses’. Expenses
must be kept down, and a judge will not award value which has been deliberately run
up, such first-class rail travel and stays in five star hotels. Residents of Northampton
have hosted a trial of an online claims procedure, so that claims may now be made
via the Internet. (www.courtservice.gov.uk outlines the procedure for MCOL, or
Money Claims Online.) Cases will normally be held in the defendant’s court, unless the complainant is a consumer and the defendant a business.

Enforcement is the weak point in the European legislation, for there is, as yet, no
European-wide Small Claims Court dealing with transnational European transac-
tions. The consumer is thus forced to contemplate expensive civil action abroad in a
foreign language, perhaps where no such small claims system exists - a pointless
measure for all but the most expensive of consumer purchases. The only redress lies
in EEJ-Net, the European Extra-Judicial Network, which puts the complainant in
touch with any applicable professional or trade body in the supplier’s home member
state. It does require the existence of such a body, which is unlikely if the transac-
tion is for electrical goods, which is one of the most popular types of Internet
purchase. Therefore, until Europe provides a Euro Small Claims Court, the consumer
cross-border buyer may have many rights, but no effective means of enforcement.
Until then it would appear that section 75 of the Consumer Credit Act 1974, which
gives the buyer the same remedies against their credit card company as against the
seller, is the only effective means of redress.

Case study questions

1. Consider the checklist of data which a distance seller must provide to a consumer
   Is this putting too heavy a burden on sellers?

2. Is a consumer distance buyer any better off after the European legislation?
3. Are there any remaining issues that must be tackled to increase European cross-
   border consumer trade?