ASSIGNMENT

DRIVE FALL DRIVE 2013

PROGRAM B.COM GENERAL
SEMESTER III
BCC304 & ENTREPRENEURSHIP DEVELOPMENT

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Q.No1 Identify the main elements comprising the criteria for selecting a particular business
opportunity. Answer: Following the identification of an opportunity, by any means, whether through
inputs received from technical people, channel members, business associates,
or consumers, careful screening and evaluation of it are required. Evaluating the business opportunity is
perhaps the most crucial aspect of the entrepreneurial process because it assists entrepreneurs in assessing
whether the particular service or product provides sufficient returns in comparison to the resources
needed. Such a process of evaluation takes into account the duration of the opportunity, the returns and
risks involved as well as the ideas real and perceived value. It also involves considering whether it
corresponds to the entrepreneurs goals and skills, as well as the distinctness or differential advantage that
it enjoys in its competitive environment. After gathering a large number of business opportunities, the
entrepreneur should consider the following criteria for selecting a particular business opportunity.
1. Investment size: Capital requirement and the risk aspect and gestation period of the project influence
the evaluation process. Professional managers, who have worked in multinational companies or large

Indian companies, should think of starting medium-sized or large-sized units only. The investment size
(project cost) should be between `3 and `5 crore. They should not make the common mistake of restricting
the project size to less than `2 crore. In fact, under the present circumstance, it will be much easier to get
projects cleared by the all-India institutions, requiring even less contribution from the promoter.
2. Location: This is the second influencing factor in the selection criteria of the project. The theories
suggest that projects should be located close to human resources and raw material availability. A new
entrepreneur should locate his project in and around the state headquarters. There are many backward
areas around such cities. It is necessary to be located in such a place where entrepreneurs can attract
competent managers. This will also facilitate liaison with the State Electricity Board, State Industrial
Development Corporation and various other agencies.
3. Technology: What type of technology is required? Should it be indigenous or foreign collaboration? Is
the required skilled manpower readily available in the job market? These questions are answered in the
next stage of the selection process of project. The first project should not be for a product
which requires high technology, necessitating foreign technical collaboration. It is better to go in for a
product with proven technology that is indigenously available. It makes life easier to begin with.
4. Equipment: The quality of a product not only depends on the raw material that the entrepreneur uses
but also on the quality of equipment that he uses in the manufacturing process. The entrepreneur should
select the best equipment as advised by experienced technical consultants. He should not compromise on
the quality of the equipment. Many entrepreneurs enter into some sort of a deal with the equipment
manufactures for a kick-back and in the process sacrifice quality. One should not be short-sighted and
come to grief by going in for poor quality equipment.
5. Marketing: The market size and opportunity of product or service have to be investigated with the help
of Market Survey and Assessment Research Reports. It is not advisable to get into a project, particularly
the first, which would mean survival amidst cut-throat competition involving direct selling to the ultimate
consumer. One should go in for products with a limited number (say 10 to 20) of industrial customers.

2 List out the features of the partnership form of organization. 10 Marks

Answer:
Some key features of the partnership form of organization are given below:

(i) Simple procedure of formation: There are no complicated legal formalities involved in the formation
of partnership. Just through an oral or written agreement, a partnership may be created. In fact, even the
registration of the agreement is not binding.
(ii) Capital: The partners contribute for the capital of a partnership. However, it is not essential that all
the partners have to contribute equally. Some of them might become partners even without contributing
any amount of capital. It happens when such partners possess special skills, capabilities and experience.
The partnership organization may also raise extra funds through borrowing from banks and other financial
institutions.
(iii) Control: All the members jointly exercise the control over the affairs. No big decision can be taken
without the consent of all the partners. Nonetheless, in some organizations, there may be partners called
as sleeping or dormant partners who do not take an active part in conducting the business.
(iv) Management: All the partners have a right to take part in the management of the organization.
However usually the partnership deed provides that one or more than one partner will take care of the
management of the affairs in the firm. Sometimes the deed might provide for the division of
responsibilities among the different partners on the basis of their specialization.
(v) Duration of partnership: The duration of the partnership may or may not be fixed by the partners. If
the duration is fixed, it is termed as partnership for a fixed term. On the completion of the fixed period,
the partnership comes to an end.
(vi) Unlimited liability: The liability of all the partners in respect of the organization is unlimited. It is
also joint in nature and hence any of the partners may be asked to clear the organizations debts in case its
assets are inadequate.
(vii) No separate legal entity: The partnership firm does not possess any independent legal existence
apart from that of the individuals who constitute it. The partnership gets dissolved when any partner
retires or dies. So it lacks continuity.
(viii) Restriction on transfer of share: A partner cannot transfer his/her share to an outsider without the
consent of all other partners.

3 Discuss various legal issues in setting up an organization. 10 Marks

Answer: There are many options that an entrepreneur can choose in setting up an organization, hence, it
will be necessary to understand all the advantages and disadvantages of each, regarding the issues such as
costs of setting up, taxes, liability, continuity, transferability of interest and attractiveness for raising
capital. Legal advice for these agreements is necessary to ensure that the most appropriate decisions have

been made. We have to briefly examine the legal issues relating to intellectual property to understand the
issues involved in facing such legal incidences. To deal with any entity of intellectual property, the
particular specialist attorney is essential. To deal with issues of a patent, a patent attorney is required, who
assists the entrepreneur in completing an application to the patent and trademark office with the history
and description of the invention, as well as claims for its usefulness. An assessment of the existing
patent(s) will help to ascertain whether any type of infringement is likely and to evaluate the possibilities
of modifying the patented product or licensing the rights from the holder of the patent. A trademark may
be a word, symbol, design, some combination or a slogan or sound that identifies the source of certain
goods or services. Trademarks give the entrepreneur certain benefits as long as the following four
requirements are met: (i) completion of the written application form, (ii) submission of a drawing
of the mark, (iii) submission of five specimens showing actual use of the mark and (iv) payment of the
required fee. If two entrepreneurs are filing for patents on similar inventions, it is recommended that the
entrepreneur first file a disclosure document to establish a date of conception of the invention. This filing
date is now also relevant when there is a foreign company involved. In that instance, the entrepreneur
who can show that he or she was the first one to conceive of the invention will be given
the rights to the patent. Original works of authorship has been protected by copyrights. These are
registered with the Library of Congress and do not usually require an attorney. Copyrights have become
relevant to the use of the Internet especially to download music, literary work, pictures or videos.
Copyright protection related to the Internet will continue to be a gray area until regulations are made
clearer. Licensing is a viable means of starting a business using someone elses product, name,
information and so on. It is also an important strategy that the entrepreneur can use to expand the business
without extensive risk or large investments. The entrepreneur should also be sensitive to possible product
safety and liability requirements. Careful scrutiny of possible product problems, as well as insurance, can
reduce the risk. Other risks relating to property insurance, life insurance, health insurance, workers
compensation and bonding should be evaluated to ascertain the most cost-effective program for the
entrepreneur. Contracts are an important part of the transactions that the entrepreneur
will make. As a rule of thumb, oral agreements are invalid for deals over one year. In addition, all real
estate transactions must be in writing to be valid. It is important in written agreements to identify all the
parties and their respective roles, to describe the transaction in detail, to specify the value of the deal and
to obtain the signatures of the people with whom business is being done. Legal formulation of an
organization basically depends upon the legal forms of business organization. The proprietary form of
organization does not demand extensive legal formulation, rather rent agreement of shop and licenses

from local bodies, state scale tax and commercial tax clearances are sufficient to carry out business. In the
case of partnership form of organization, legal formulations are partnership deed, profit or loss share
agreements among the partners, enterprise rental agreements, local bodies licenses, sales and
commercial tax clearances. In the case of a company, legal formulations are divergent in nature because a
company has a separate legal existence. It has to be registered under the Company Act 1956, which
follows the minimum members and maximum member regulation. The liability of members and
shareholders is limited to the extent of their share capital. A constituted board of directors and managing
directors will look after the company activities. Memorandum of Understanding and Memorandum of
Association are legal documents which are written documents, possess information in connection with
company legal
and other related issues and how to deal with various issues.

4 Explain the five creativity enhancing techniques.

Answer: Some of the techniques that improve creativity are:
Brainstorming
Attribute listing
Synectics
Random links
Revolution
Mind mapping
KJ method
Plusses, potentials and concerns
Edward de Bonos 6 Thinking Hats
Brainstorming
A.F. Osborn developed the brainstorming procedure in 1953. The basis of brainstorming is generating
ideas in a group situation based on the principle of suspending judgment. When faced with a problem,
you automatically start exploring the things you know for a solution. But radical solutions are never
going to be found within the problem area. You have to force your brain to jump out of the existing
framework into another one. Brainstorming techniques are a way to do this. Brainstorming sessions are
great for generating hundreds of ideas and building up energy and motivation within a team. There are
many variants of brainstorming, although the basic rules are the same, they are as follows and include:

 Classic brainstorming
Rawlinson brainstorming
Trigger sessions, etc.
Brainstorming has two phases to it, the idea generation stage and the judgment phase. The generation
phase of ideas is separate from the judgment phase of thinking. The judgment phase of brainstorming is
similar in all the variations of this technique; however, the generation phase is slightly different
and modified in the different versions of brainstorming. These differences are given below:
Classic brainstorming: In this, a panel (typically 48 people) is constituted with a leader. The panel is
closeted in a room and a brainstorming topic or problem is announced. Make sure that everyone
understands the problem or issue. Review the ground rules are: no criticizing of ideas; ideas should be of
a problem solving nature; avoid generalisations and abstractions; all ideas are as valid as each other; no
censoring of any ideas; Listen to other ideas, and try to use them to move on to other ideas. The members
are encouraged to provide a number ideas.
Rawlinson brainstorming: Rawlinson Brainstorming is useful for untrained groups because there is no
interaction between group members; all ideas are directed towards the facilitator/scribe.
o The problem owner simply describes in a headline the problem, he then gives simple background on
routes he has tried and have failed, and what would represent an ideal solution.
o The resource (i.e., all other participants) are invited to have a creative warm-up session and then offer
solutions to the problem as two word descriptors.
o The problem owner focuses on those ideas that give him new
viewpoints.
Trigger sessions: Trigger sessions are a good way of getting ideas drawn
from untrained resources. o The problem-owner defines the problem.
o Each member of group writes down his ideas in shorthand (2 minutes only).
o One member reads out his list others silently cross out ideas read out and write down hitch-hiked
ideas.
o The second member reads out his list of ideas not already covered, followed in turn by other members.
o The last member reads out his original list and his hitch-hiked list and procedure is repeated counter
current clock wise.
A good group will be able to manage seven passes. Every ones paper is then collected and can be typed
up into a single list of ideas all duplicates should have been crossed out during the session. The ideas
selected for further discussions are then taken up for more intense scrutiny. Forming task forces may do
this and asking them to prepare a presentation assessing the potential of the idea, an operational plan to
make the idea work, some guesstimates of costs and benefits and an execution plan.

During a brainstorming session people drop their defensiveness and instead of competing for power and
status, they compete for excellence and creativity of their ideas. Brainstorming reinforces a sense of
participation, increases commitment to implement the chosen course of action, and the selfconfidence
of the participants. Brainstorming is a powerful tool that can easily be used to develop ideas and enhance
the creativity of the participants. The danger is that all this will be lost if the ideas are not developed and
are either abandoned or shared too soon.
Attribute listing
Robert Crawford developed this technique in 1954. Attribute listing is a technique from the early 1930s
which takes an existing product or system, breaks it into parts, identifies various ways of achieving each
part, and then recombines these to identify new forms of the product or system. It has many variants, and
is an important precursor to techniques such as Morphological Analysis and Value
Engineering that have been discussed earlier. This technique is based on the premise that creativity arises
from adding attributes from one object to another. For instance, casters used in skating when grafted to
bags, make them easier to transport. Compartments used in cupboards, when grafted on to travel bags,
make them more functional. These are creative acts and create new designs for products. Attribute listing
attempts to do this.
Synectics
It is a technique developed in 1961 by William J.J. Gordon. Synectics is derived from Greek, means a
joining together of different and often unrelated ideas. Therefore, when a person has consciously worked
to resolve a problem without success, allowing it to incubate in the subconscious, it will often lead to a
resolution. Synectics is a very important tool of group problem solving. It is based on the theory that the
mind has several layers. Each layer, though connected to the others, has a distinctive mode of functioning.
The deepest layer is our unconscious mind. Its vital function is self-preservation and reproduction, the
next higher layer is the pre-conscious mind. It is the latter that is responsible for fantasies and
imagination. The structure of fantasy has at its core, wish fulfillment. This wish fulfillment is achieved by
giving the imagination free rein and by dropping real life constraints that impede wish fulfilment. Finally,
there is the layer of the conscious mind that is orderly, logical, evaluative, and analytical.
The conscious mind is ascendant in the wakeful state. Synectics is based on access to the pre-conscience
mind. They have developed heuristic methods to imitate the incubation phase (incubation is the phase of
problem solving of the pre-conscious mind) and harnessing it. The pre-conscience mind does not think
logically, it thinks analogically, associatively and visually. Synectics uses analogies for fantasising.
There are four types of analogies, used in this procedure. They are direct analogy, personal analogy,
fantasy analogy, and symbolic analogy. Direct analogy involves seeking a direct comparison of the

phenomenon under discussion with some other phenomenon that is similar. For instance if aerodynamics
were under discussion, the analogy could be with the flight of birds. The group could
explore how birds fly and from that seek insight into a planes aerodynamics. Another type of analogy
used is the personal analogy. The person is asked to retain his individual human sensibility but is
simultaneously asked to transpose himself as the object and react on the events and circumstances
prescribed. In the fantasy analogy, group members are urged to fantasise some perfect solution even if it
contradicts common sense and scientific knowledge. Finally, there is the symbolic analogy. It is similar to
the use of metaphors or key words that contain a paradox.
Random links
This is a very interesting and easy to play creativity enhancement technique. There are two random
quantities you pick up, one is an item and the other is a stimulus, which is normally the problem. The
random item can be physical; for example, a torch, a tennis ball, tandoori, etc. Or it can be a word picked
at random from a book or a list of words. Then you can think about the characteristics of the random
stimulus.
Revolution
This creativity technique is designed to be provocative. It deliberately challenges rules and assumptions.
Very often, our ability to come up with innovative ideas is limited by the rules of our own framework.
Revolution breaks those rules. following are five questions that may get you started:
(i) What if you did nothing?
(ii) What if everything cost half of what it is today?
(iii) What if demand was twice as high?
(iv) What if food was farmed from the sea floor?
(v) What if children were asked to teach adults?

5 Discuss the various mechanisms adopted by the companies to enter the global markets.
Answer: A company can use one of the following options to formulate a strategy to enter the global
market.
Contractual agreement
Contractual agreements are responsible for transferring technologies and human skills, processes and
trademarks. Licensing and franchising are two different contractual agreements that are mostly used to
enter the global market. Licensing is a term generally used in business that refers to legal

establishment of a company in a foreign market. A company can use its own trademarks and technologies
in the global market after getting a licence. Franchising refers to a process in which a company named as
franchiser provides a standard package of product and services to a representative known
as franchisee. Franchisee provides capital, personnel involvement and knowledge about the local market
to the franchiser. The main advantage of the franchising process is that a company may easily enter a
well-established market using a creative franchisee because he provides effective knowledge such as the
type of services required by the customers of that particular market. The main disadvantage of franchising
is the loss of control, i.e., a franchisee may misuse the trademark and services of the company in a
specific market. To avoid such problems, a franchiser has to collect the following information related to
the
franchisee:
Description about the appearance of the franchisee
Documents to provide identification of a person as franchisee
Information about experience related to the required job of the franchisee
Historical information about litigation
Historical information about bankruptcy
Details about financing arrangement related to the contract of franchisee and franchiser
Details about obligation to purchase
Details about initial and recurring funds that have to be paid by the franchisee
Export
Exporting means selling a product from one country to another. It can be either direct, in which the
company delivers its product to the other country through shipping companies; or it can be indirect, in
which the company sells its product to a distributor in its own country, who then delivers the product to
customers in other countries.
The advantages of exporting are:
It helps in achieving good economy of scale.
It is never concerned with the cost related to manufacturing of the product.
The disadvantages of exporting are:
It causes more competition with foreign companies.
It requires more cost for transportation of the product to foreign countries.
It also requires creative marketing representatives in foreign countries.
A company that has a high productive capacity may use an export strategy which focuses on product
quantity and quality.

Joint venture
A joint venture (JV) is a type of strategic alliance in which at least two companies take part in an
economic activity, creating a new entity through contribution of equity, and sharing of control, revenue
and expenses. The joint venture may be for one particular project or a continuing one.
The main difference between a strategic alliance and a joint venture is that the latter is a separate entity in
the eyes of the law while a strategic alliance is only a relationship between different companies. The
participating companies in a JV have to acknowledge each others share in managing it and each partner
has an equity position. A JV can only be created as a partnership between entities that are legally
incorporated, such as companies, governments and chartered organizations.
Consortium
Consortia are similar to JVs except that they comprise a large number of
participating companies, and they most often function in markets not supported
by any of the participating companies.
Strategic alliance
A strategic alliance is used as a competitive strategy to enter the global market. It refers to a business
relationship between at least two companies to achieve a common goal. All the companies that are
involved in the strategic alliance also share the risks. The advantages of a strategic alliance are:
It protects each participating company from its respective weaknesses while increasing its competitive
strengths.
It facilitates expansion in different global markets, reduces cost of production and marketing and
enables access to new technologies.
Subsidiary
A subsidiary is a sub-branch of a company that may or may not be located in another country. The main
branch of the company is known as the parent company and it holds the maximum share of the subsidiary.
A main branch may have a number of subsidiaries in different countries. The combination of the main
branch and its subsidiaries is called a group. When the ownership of a subsidiary is not sharable, it is
called a wholly owned subsidiary. Various advantages of a subsidiary are:
Easy handling of risk related to technical competence
Better performance for different operations in order to achieve a good position in the global market due
to well-controlled policies
Better marketing of a product in different countries using local employees who do not face cultural or
language problems.
Turnkey project

Turnkey projects are those that are taken up by companies in foreign countries, such as construction work
in the UAE. They are typically based on the Build, Operate and Transfer (BOT) principle. Turnkey
projects allow a company to establish itself in the global market and have fewer risks than direct
investment in a foreign market. However, such projects are vulnerable to competition, and do not have
any long-term stakes.

6 Why is Aditya Vikram Birla considered to be one of the first Indian industrialists to expand the
horizons of his company around the globe?
Answer: Aditya Vikram Birla (14 November 19431 October 1995), was born in one of the largest
business families of India. As the chairman of the Birla conglomerate, he saw success in the expansion of
Hindustan Gas and in the conversion of the sick company, Indo-Gulf Fertilizers and Chemicals Limited,
which was suffering from a liquidity crisis and poor management, into a blue-chip company. He was
one of the first Indian industrialists to expand the horizons of his company around the globe. He set up
plants in Southeast Asia, Philippines and Egypt, among other places.
In 1965, Birla struck out on his own in textiles. Birlas Eastern Spinning Mills in Kolkata registered a
huge success, putting the Birla Groups sinking rayon and textile business back on track. He then took
charge of the corporations expansion into the oil sector. In 1969, Birla set up Indo-Thai Synthetics
Company Limited, the Groups first overseas company. In 1973, he established P.T. Elegant Textiles,
which manufactured spun yarn, as his first venture in Indonesia. In 1974, Thai Rayon, the Groups
Viscose Rayon Staple Fibre business was incorporated in Thailand. In 1975, The Indo-Phil Group of
companies, the first Indo-Filipino joint venture commenced production of spun yarn. In 1977, Pan
Century Edible Oils was incorporated in Malaysia, which later became the worlds largest single-location
palm oil refinery. In 1978, Thai Carbon Black, the Groups first carbon black company was incorporated
in Thailand. In 1982, P.T. Indo Bharat Rayon was established, which was the first producer of Viscose
Staple Fibre in Indonesia. Under Birlas leadership, the Group became the largest producer of Viscose
staple fibre and refiner of palm oil.

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