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ME Project - Group 7
ME Project - Group 7
Group 7.pdf
Oct 9, 2020
3625 words / 19043 characters
Priya Bansal
Group 7.pdf
Sources Overview
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OVERALL SIMILARITY
www.coursehero.com
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INTERNET
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www.mbaskool.com
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www.its.leeds.ac.uk
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jim on 2020-10-09
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nsbm on 2020-09-04
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University of East London on 2020-06-15
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INTERNET
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University of She eld on 2020-08-14
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Shinas College of Technology on 2019-03-26
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jim on 2020-10-09
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jim on 2020-09-19
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Top Education Institute on 2020-06-09
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Billy Blue Group on 2017-10-13
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University of She eld on 2013-11-20
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Waterford Institute of Technology on 2013-11-20
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essex on 2019-10-11
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Excluded sources:
jim on 2020-10-08, submitted works, 84%
jim on 2020-10-08, submitted works, 14%
jim on 2020-10-08, submitted works, 14%
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MANAGERIAL ECONOMICS
Project On
BUSINESS ANALYSIS
26
POST GRADUATE DIPLOMA IN MANAGEMENT
(Batch 2020-22, Term-I )
10
JAIPURIA INSTITUTE OF MANAGEMENT
A-32 A, Sector 62, Institutional Area, Noida- 201309 (U.P.)
October, 2020
5
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KALA MANDIR
&
KALA NIKETAN
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CONTRIBUTIONS
Dev Srivastava
Things that I learned from this project are as follows-
1)How businesses compete in monopolistic market structure.
2)What all are the factors that affect the monopolistic competition market.
3)How during this Pandemic, Mr. Batra handled the situation and managed his finances keeping
in mind about the lower-class employees.
Divanshi Bist
My contribution toward the project not only include researching but also compiling the
assignment together, and adding index to the assignment.
Which made me learn about how the business produces its products and services, the fixed input
factor in the business and in which part the fixed items quantity are not changes for short amount
of time and also what are the variable inputs
Priya Bansal
Contributions include:
Studying the different type of elasticities of the business
Impact of change in quantity demanded and price on total revenue of the business
Adding various pictures of the business
Formatting of the combined document
Shivangi Batra
Contribution include:
Conducting interview with the owner of the business
Questions asked includes - type of the business, competitors, expertise of the company,
company’s weaknesses, comparison with competitors – how are the products differentiated and
similar.
Tanya Sachdeva
My contribution in the project relates to researching about - 1.the expenses incurred by the
business and its affects. 2. How is the business different from the competitors, study the current
scenario affecting the business situation. I had a word with the owner regarding this and he was
able to tell me about how they are dealing with work after reopening of market, what strategies
they plan to follow and what they implemented.3.My last question was to enquire him about the
number of employees they have and how he dealt with their salary part during lockdown
situation. I learnt many things about clothing business via this project and how we can relate it
all with the economy, how you need to differentiate your product in order to remain in the
market, strategies to increase sales and how competitors affect your pricing.
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ACKNOWLEDGEMENT
We would like to express our special thanks of gratitude to Dr. Ritika Gugnani who introduced
us with such an interesting subject which will not only help us in our course but also in our
future. We actually got a brief knowledge on why Managerial Economic is important for us.
1
We would also like to expand our deepest gratitude to all those who have directly and indirectly
By doing this assignment we got enriched with much information which can help us in our
future.
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INDEX
1. Name of the Business, Product and Services..........................................6
5. Competitors...................................................................................20
6. The pandemic.................................................................................24
7. Conclusion.....................................................................................25
8. Bibliography..................................................................................26
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There are two outlets of the business in Gwalior (MP). Name of the first outlet is Kala Mandir
on which products like Readymade Dresses (Suits Sarees, Lehenga, Kurtis, Indo-western) are
available and the name of the second outlet is Kala Niketan on which Dress Material (Fabrics,
readymade blouses, cloth material, pants, leggings of different brands are available.
It is a Joint Hindu undivided family business in which well any person born into the family up to
three generations is a part of HUF. These members are the co-parceners. The head of such a
family business is karta who takes all the decisions and is responsible for the finances and the
business, the liability of the karta is unlimited but the liability of the co parceners is only up to
the share of the property or business. In this business there is one karta and 3 co-parceners.
Person Interviewed
The name of the person is Mr. Suresh Batra and he is the owner of the business. The Person
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OR SERVICES
If the business doesn’t manufacture its own produce then it’s a Wholesaler and Retailer business.
They purchase the finished products from the manufacture and sell those to the customers. The
products have been received from the different cities such as Delhi, Surat, Jaipur, Banaras and
Indore. The material which they use for the products are:
▪ Different varieties of Cloth (Kancheepuram Silk, Banarasi Silk, Zari work, Handloom
Cloth, Khadi silk, Cotton Silk, Chicken work, Chiffon Saree etc.)
▪ Gota/Lace work for giving the finally touch to the saree, suits, Lehenga.
▪ Works which are designed by the designer for the miniskirts, shorts as well as dresses.
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FIXED INPUT
Fixed Input are those factors input whose quantity remains the same in the process of production.
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These don’t vary with the volume of output. Their costs remain fixed even with the change in the
level of output or the sale of the business which include land, machinery and also the top
management. So, the business we have taken our based on the clothing wearing for women’s.
▪ Land was the business take place and all the activity related to that.
▪ Utilities which are been used by the business it cannot be vary whether its loss or profit
the bill we have to pay and they are fixed such as - Electricity bills, Meter charges, Water
bills
▪ Sewing Machine which are used by the business to sew the cloth.
▪ Salaries to Tailors, workers working under the business, Salesmen how sale the cloths to
the customer, Accountant salary(billing), CA for looking after the records of the business
and also for the purpose of GST (Good Services Tax) and the salary of cashier for
GST (Good Service Tax), Insurance which are fixed whether it has a loss or profit in the
business
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VARIBALE INPUT
Variable Input are those factors which vary with the level of output or we can say the cost
which is directly related to the sale volume of the business. So, the businesses which we have
▪ Raw material which are used by the business such as cloth material, various types of
▪ Charges such as Internet charges, shipping charges are the cost which is used to ship the
▪ Sales commission
▪ Petty Cash
4
Inputs could the quantity used was easy to change in a relatively short amount of time such as a
month Raw Material as due to the non-festive seasons are the major reason for reducing the
material as it depends upon the seasons so it may vary from one month to another. In the month
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The biggest cost per month in any clothing company is raw material and dead stock. Because the
business relies mainly on factors such as fashion patterns, consumer tastes, prices of related
4
products, income(budget)-how much the customer is willing to spend, the number of customers
present in the market, seasonal shifts, etc., all this affects the demand of the business and thus
Since Mr. Batra is a well-known and old businessman on the market so some part of the dead
stock can be returned to the wholesaler {from where they bought the materials}as a part of
business dealing but also a large part of it remains unsold which are then sold to customers
during the sale season, which they mainly hold during off seasons {when demand falls in some
Since Covid - 19 had affected every business across the world, Mr. Batra 's business was no
exception to this, the situation further led to a high amount of accumulated stock (approx.-4 to 5
lakhs is the amount) first, the lockdown is responsible for it, and second, as people stopped
The trends of fancy dress {party wear and designer} have been replaced by more casual
everyday wear leading to a drop in demand, but now that all is re-opening and the festival season
is coming, they are preparing to supply their outstanding stocks at big discounted rates to clear
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Each business (kala Mandir and kala Niketan) consists of 15 employees; everyone resides in
Gwalior itself and are working with the owner since many years.
Mr. Batra told us that during pandemic a cartel was formed by all the businessmen in the area
▪ 30%cut in salary in the months where shop opened for few days and no salary when it was
▪ Above the salary, sales commission will also be provided to support them.
▪ But with the exception that there will be no bribing to employees of other businesses
present in market in order to allure them to drop the current employer and work for the
another one{competitor}
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ELASTICITY OF DEMAND
3
Elasticity is the measure of sensitivity of one variable to another. Specifically, it is a number that
3
tells us the percentage change and the relation (positive or negative) of one variable in response
When we measure the percentage change in demand of a product with respect to per unit percent
7
change in the price of the same product, it is known as price elasticity of demand. When the
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percent change in demand is measured with respect to the unit percentage change in the income
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of the customers, it is called income elasticity of demand. And when we measure the percentage
7
change in demand of a product with respect to per unit percent change in the price of the related
The business being studied in this project is about fashion retail industry which deals with female
clothing. It is involved in selling of raw dress materials for ladies’ clothes and semi stitched
designer lehengas, Sarees and various other party wear and ethnic dresses.
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PRICE ELASTICITY OF DEMAND
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Price elasticity of demand plays a crucial role in business decision making. There are several
8
factors which affect the price elasticity of demand including availability of substitutes and the
percentage of consumer’s budget. There are five types of price elastic ties –
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1. Perfectly Elastic, when |E|=∞;
Clothing retail industry has a lot of substitutes in the market. Huge amounts of discounts are
being offered by retailers to compete with other businesses and thus increase their total revenue
by selling large quantity of products. Clothing retail industry has an elastic demand curve. A
small decrease in price, which is generally seen in the form of discounts offered by retailers,
leads to customers buying more quantities of clothes. On the other hand, if the prices of the
products are increased by the retailers, the consumers will be easily able to find other retailers
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(which act as substitutes) offering the same product at a lower price. Thus, small increase in
consumer spends on clothing. If all other factors are kept equal or constant, the price elasticity is
observed to be directly related to the percentage of consumer’s budget spent on the goods.
According to a report by World Bank, in urban India, people spend about 5.8% of their budget
on clothing whereas in rural India, this figure is 6.2%. In rural India, the lifestyle of people is
27
changing with the increase in their incomes. Thus, the price elasticity of demand is more in rural
INCOME ELASTICITY
14
The raw dress materials, which is being sold at Kala Niketan is a, is a necessity good. The
increase in consumer’s income will lead to increase in demand but this change in demand would
be less as compared to the change in the price. This means, the demand for raw dress material is
elastic in nature.
Whereas, designer or fashion semi-stitched dresses and Sarees being sold at Kala Mandir is a
luxury good. If consumer’s income increases, people would easily spend on these luxury
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clothing items and this will lead to an increase in demand. This shows that the demand for
3
CROSS PRICE ELASTICITY
Cross price elasticity refers to the percent change in demand as the price of related products
changes. In this case, if the competitor retailers of Kala Mandir/Kala Niketan lower the price of
its products, the demand of the products being sold by Kala Mandir/Kala Niketan. This implies
Apart from these, few other factors which affect the quantity demanded are seasons and festivals.
Since Kala Niketan is involved in retail of designer clothes for various traditional festivals and
occasions, the demand is high during traditional Indian festivals like KarwaChauth, Diwali, and
However, during winter season, non-wedding season and Shradh month, the quantity demanded
for various products decrease. To avoid incurring loss during these seasons, products are sold on
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COMPETITION
1. Aneja’s Mall
3. Vandana Sarees.
4. Batra’s Mall
Due to monopolistic nature of the clothing business, imperfect competition exists and there are
many producers who sell similar products but no perfect substitute is present.
1
Hence there is freedom of entry and exit in markets but firm can differentiate the products and
inelastic demand curve determines the price. There are many competitors in the market therefore
Mr. Batra believes that product differentiation is the main key to remain different to push the sale
volumes, his knowledge and experience in the business aids to originality and distinction of
products.
Above described are some of ways of how his clothing business differs from other competitors.
The business that we have taken deals in, women ready-made clothing and falls under Hindu
Undivided Family. The market structure here in our case is Monopolistic competition as they are
competing with other players in the market of the same segment and are the price makers in their
businesses.
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MARKET STRUCTURE
1
Monopolistic competition: It is a market structure in which there is imperfect competition such
that many producers sell products that are differentiated from one another and hence are not
1
perfect substitutes. Essentially a monopolistic competitive market is one with freedom of entry
and exit, but firms can differentiate their products, Therefore, they have an inelastic demand
curve and so they can set prices. However, because there is freedom of entry, supernormal profit
will encourage more firms to enter the market leading to normal profit in the long term.
▪ Many firms
▪ Price makers
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▪ Normal profits in the long run and supernormal profit in the short run.
COMPANY EXPERTISE
The business embrace and adopt the suits, dresses, lehengas, pants, kurtis, dress material as we
know Indian Ethnic wear still dominates when it comes to special occasions lending an oomph
factor. Many also associate it with grace, elegance and poise. From Sarees and suits to lehengas
and kurtas, the embroideries and embellishments in these outfits can make women in India go
gaga. The lehengas that are provided by the business is the mix and match and are the copies of
Manish Malhotra and SabyaSachi at a much cheaper rate like the lehengas and Sarees ranging
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As it is a Monopolistic type there is a cut-throat competition in the market trying to sell most
trendy and in fashion clothes sometimes is not possible as the dead stock get piled up to maintain
the trend and fashion on a large scale but still there is room for improvement in a well-run
organization.
As there is a cut-throat competition with the rivalry firms the price range, the employees
(salesman) vary the variety varies as we try providing traditional from all the cultures and
heritage of India trying to satisfy every customer’s demand by providing them trendy from
also include contemporary designs in a creative manner to bring out elegance and style which
other competitors are not able to fulfill fully. The designs choose and provided by us are
permeated with elegance, glamour and femineity, the traditional designs with modern Indian
flair.
As there is a Monopolistic Competition the product range provided by both the businesses are
almost similar. The two businesses are similar in the manner that products offered by both are
somehow similar in the variety of clothes and material used and the prices offered by the stores.
▪ There is a tough competition between the two in order to gain customers and increase
demand.
▪ The homogeneous product provided by both the businesses but the design varies
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THE PANDEMIC
2
The Coronavirus pandemic has completely eroded the business world over with all industries
struggling amidst a global lockdown. Since the beginning of 2020, the spread of coronavirus has
completely destroyed the business ecosystem world over. Businesses world over have lost
trillions of dollars and one the worst global recessions have hit the world.
The coronavirus has forced government to ensure all the people are locked down and here all
In a conversation, the owner of the shop, Mr. Suresh Batra told us how he dealt with this
situation of complete lockdown imposed by the government and how he managed to sell his
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CONCLUSION
The project helped us in understanding about how the concepts of demand, supply, elasticity and
market structure are applied in the practical world. With the concepts of microeconomics, how
The topics and concepts of microeconomics can actually help owners handle critical situations,
understand how competition creates hurdles for everyone around and how we can apply our
knowledge of economics to deal with such hurdles. It helped us in understanding how costs are
covered and what MRP's to be imposed and how much discounts to give so that at least a break-
This Pandemic created chaos all around and most affected were the small business sector.
However, Mr. Batra managed well in these hard times keeping in mind about the small workers.
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BIBLIOGRAPHY
6
• https://opentextbc.ca/principlesofeconomics/chapter/5-1-price-elasticity-of-demand-and-
price-elasticity-of-
supply/#:~:text=The%20price%20elasticity%20of%20demand%20is%20calculated%20a
s%20the%20percentage,the%20percentage%20change%20in%
12
• https://www.economicshelp.org/blog/195/economics/calculating-price-elasticity-of-
demand/
• https://www.economicsdiscussion.net/price-elasticity-of-demand/price-elasticity-of-
demand-with-formula/25223
• https://en.wikipedia.org/wiki/Price_elasticity_of_demand
• https://www.khanacademy.org/economics-finance-domain/microeconomics/elasticity-
tutorial/price-elasticity-tutorial/a/price-elasticity-of-demand-and-price-elasticity-of-
supply-cnx
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