Vaad Vivaad Round 2

Situation Interpretation

Congratulations for cracking the 1st round of Vaad Vivaad. Now, for the 2nd round put your thinking hats
on as we challenge you with some cunning business-cum-economic situations. We hope that you will
show the same enthusiasm in this exciting round too.

Instructions

 The word limit for each answer should not exceed 800 words
 There are eight case studies in total. You can attempt as many cases as you want but it
should not be more than FIVE. If you attempt more than five cases, the first 5 will be taken
into consideration while evaluating
 Please note that each case study will award you extra points
 Practically feasible solutions supported by data will fetch you more points
 Assumptions and exhibits (if any) are mandatory and will be excluded from the word count
 The deadline to submit your case studies is by 11:59:59 pm, December 23, 2020
(Wednesday). No submission will be accepted after the deadline
 In case of multiple submissions, the one submitted 1st will be accepted
 Naming convention TeamName_CollegeName_VaadVivad2.doc (only Word docs should be
used)
 Follow the link send to you via the same mail to submit your responses. Only the team
leader is required to submit
 No responses will be accepted via email
 Feel free to reach out to us in case any issue pertaining to the round

All the best!!

 Cases

1. Due to the certain events, manufacturing companies’ setup in China are looking to setup
further investments outside country. India is one of the alternate countries for setting up of
manufacturing plants outside China. But instead companies moved their manufacturing to
ASEAN countries like Vietnam and Korea. What can Government of India do in terms of
Policy changes to attract those companies?

2. At the start of 2010 a new free trade area was established incorporating China and the six
founding members of the Association of South East Asian Nations (ASEAN). These
countries are Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand. The aim is
to eliminate 90% of imported goods. This deal created the largest trade area in the world,
with nearly 1.9bn people. Although there are undoubted gains there have also been warnings
from South East Asia that some industries are not ready to compete with China and that jobs
will be lost.
Outline the potential advantages and disadvantages of joining this area for the member
countries. What factors determine the extent to which industries within a country gain or
lose?

3. When ABC Ltd. planned to enter the Japanese market for Gypsy Moth tape, it knew its
production cost and understood the market demand curve but found it hard to determine the
right price to charge because two other firms - X ltd and Y Ltd.. were also planning to enter
the market. Because all three firms are using the same technology for producing the product,
they have same production cost. Each firm has a fixed cost of $480000 per month and a
variable cost of $1 per unit. From research P&G ascertained that its demand curve for
monthly sales was
Q = 3375P-3.5(Px)0.25(Py)0.25
Where Q is the monthly sales. P, Px, Py are the unit prices of ABC, X and Y, respectively.
Assuming that X and Y faces the same demand conditions, with what price should you
enter the market and how much profit do you expect to earn?

4. Suppose that you are the manager of a firm that has just entered the chemical processing
industry. You face the following problem- should you produce a relatively small quantity
of industrial chemicals and sell them at a higher price or should you increase your output
and reduce your price?

5. Financial sector in India witnessed a number of setbacks in the recent times like the NBFC
crisis, PMC bank crisis, Yes bank crisis, very recent Laxmi Vilas bank crisis. What do you
think are the prominent reasons behind these failures? Is there any common similarity that
indicates a deeper malaise in the system? What RBI can do as a regulator to prevent these
events?
6. There was reduction in the sales of watches in India in a particular year. The fast track watch
owner decided to reduce the price of watches to boost sales. The Rado watch retailer in
India suggested its parent company in Switzerland to do the same. But the CFO of Rado did
not agree to the proposal despite the retailer mentioning the demand and pricing concepts.
Rather the CFO advised the retailer to clear his concepts of economics. Retailer went back
and after studying some economics considered himself to be a fool to suggest the CFO to
reduce price. What was CFO referring to?

7. Producers of processed goods and related consumer goods often issue coupons that let
consumers buy products at discounts. These coupons are generally distributed as a part of
advertisement for the product. They may appear in the newspaper or magazines or in
promotional mailings. For example, a coupon for a particular breakfast cereal might be
worth 50 cents towards the purchase of a box of the cereal. Why do firms issue these
coupons? Why not just lower the price of the product and advertise the same and also saving
the cost of the printing and distrusting the coupons?

8. Due to a severe drought, government of Rwanda rationed the supply of water for both
household consumption and agricultural production using allocation of coupons so that
everyone can have equal chance to purchase rationed water. Assume yourself as a consumer,
are you better off in terms of level of utility under a rationing system than you would have
been under a no rationing system?
You can also use a graphical representation to illustrate the reasoning.