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Marking Scheme (2023-24) Subject: Entrepreneurship (066) Class: XII Part A Answers Marks 1 d. Both Quantitative and Qualitative analysis 1 2 c. i and ii 1 3 c. iii and v 1 4 c. Ambient 1 5 c. i, ii, iii and iv 1 6 d. Public Relations 1 7 d. Rs. 4,35,000 1 8 c. Umbrella branding 1 9 b. Secondary market 1 10 a. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
11 d. Sujata AI ltd. raised funds from Mr. Bansal, an affluent individual in exchange for ownership equity
12 b. Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)
13 c. Assertion (A) is true but Reason (R) is false 1 14 c. Identifying a product or service through innovation 1 15 a. Read Trend 1 16 b. Preparation 1 17 a. Political 1 18 b. Organising resources
Part B 19 It should clearly state the problem Identify target group facing the problem Find the market acceptability of the solution to the problem (Any two) OR There are basically five ways in which creative ideas can be generated:
- Develop a new product or service.
- Improve an existing product or service
- Find a new process or resource for manufacturing a product.
- Find new markets for existing products or services.
- Find a new use of an existing product or service. (Any two)
20 1. Direct Sales Strategy: where sales people attack the competition head on when talking to the customer. They talk about each feature of the competitionās product and compare it to theirs. The term "negative selling" refers to the direct sales approach.
- Indirect Sales Strategy: They apply more subtle techniques by demonstrating features and benefits not available with the competitionās products or services without ever mentioning them by name. This more sophisticated, positive sales strategy requires research and analysis of the competition.
21 a. Demand: The demand assessment will be based on the size of market being targeted, i.e., local markets, market at state level or national/international market. It will also involve a study of the target groups of consumers, their preferences, tastes and other related variables. b. Cost and price of product: It is important to determine the cost of the product and its comparison with available products in the market. Cost variable of competitors in terms of transportation delays, wastage, storage etc., have to be studied to spot cost advantage. This will influence the delivery mechanism of the identified product or service.
22 1. Franchising changed the working of the startups because already the product carriers a name in the market already which is the most difficult part of business to establish.
- Startups take up training to understand the product and franchisors make franchises fully conversant with the product/services that they have to offer.
creatively identify an idea to generate a valuable solution to a problem. Once the solution is identified their vision to convert the solution into business opportunity helps them to move forward, overcoming all the obstacles. They constantly a) overcome adversity b) exercise control over the business c) make a significant difference. (Any two)
Week Number of people taking meals Average amount billed Amount billed Week 1 120 150 18, Week 2 60 205 12, Week 3 70 146 10, Week 4 80 221 17, Week 5 90 240 21, Total 420 Rs.79, Unit Price per customer= Total Billed Amount /Number of Customers = 79800/ = Rs. 190/ customer OR EOQ = Q š = ą¶„ 2 šš·/š¶ P= Rs. D= 1200 Ć 12 = 14, C= Rs. 30
Q= ą¶„ 2 Ć 1500 Ć 14400 / 30
= 1200 jeans Part C 25 Purpose of logo: Logos are a critical aspect of business marketing. As the company's major graphical representation, a logo anchors company's brand.
- Corporate Logo are intended to be the "Identity" of an enterprise because of displaying graphically enterprise's uniqueness.
- Through a set color combination, fonts, images, impression and/or pattern, logos provide essential information about a company that allows customers to relate with the enterprise's core brand.
- Enterprises normally resort to logos' as a short path for advertising and other marketing materials.
- Logos act as the key visual component of an enterprise's overall brand identify. (Any three)
26 The three situations are: a) No manufacturing involved: If the new venture does not include any manufacturing function, say itās a trading firm or a service provider, then this section will stand eliminated from the plan. b) Partial manufacturing: If some or all the manufacturing process is to be subcontracted or outsourced, then the production plan should describe: i) Name and location of subcontractor(s) ii) Reasons for their selection iii) Cost and time involved iv) Any contracts that have been completed etc. In such cases, a clear mention of what entrepreneur intends to do himself and what he plans to get it done from outside is required. c) Complete Manufacturing: If the manufacturing is to be carried out in whole by the entrepreneur, he/she will need to describe: i) the physical plant layout, ii) the machinery and equipment required to perform the manufacturing operations, iii) raw materials and suppliers names, addresses, terms and conditions,
inventory management. iv) Describing the flow of goods / services from production point to the consumers. v) Introducing a proper system of quality control vi) Undertaking the best and most economic production policies and methods. (Any three points) 29 a. Finance assists in the formation of new businesses and allows businesses to take advantage of opportunities to grow and expand. b. A business needs funds to: a) Promote or establish the business b) Acquire fixed assets c) Make market investigations d) Develop products e) Keep men and machines at work f) Encourage management to make progress and create value. g) Expand, diversify, improve, and grow. c. The significance of finance in an enterprise is like a lubricant to the process of production. Finance is the elixir for any business as nothing happens without money. OR a) Mobilize the financial resources on a nation-wide scale. b) Secure the required foreign capital and know-how to promote economic growth at a faster rate. c) Ensure the most effective allocation of the mobilized financial resources by directing the same either to such projects which are capable of the highest yield or to the underdeveloped priority areas where there is an urgent need to promote balanced and diversified industrialization. The capital market satisfies the tastes of savers and the needs of investors through its various financial instruments and institutions.
Part D 30 Synergy is the most essential component of mergers. In mergers, synergy between the participating firms determines the increase in value of the combined entity. In other words, it refers to the difference between the value of the combined firm and the value of the sum of the participants. Synergy accrues in the form of revenue enhancement and cost savings. a) Operating synergy: This refers to the cost savings that come through economies of scale or increased sales and profits. It leads to the overall growth of the firm.
b) Financial synergy: This is the direct result of financial factors such as lower taxes, higher debt capacity or better use of idle cash. When a firm with accumulated losses or unabsorbed depreciation merges with a profitable firm and the combined firm can set off such losses against its profits, a financial synergy, known as tax shield, occurs. OR Merger Acquisition A merger is a combination of two companies into one larger company. An acquisition is taking control of a company, leading to its takeover. It could be an acquisition of tangible assets, intangible assets, rights and other kinds of obligations. All the combining companies are dissolved and only the new entity continues to operate. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own There are four types of acquisitions:
- Friendly acquisition Both the companies approve of the acquisition under friendly terms. There is no forceful acquisition and the entire process is cordial.
- Reverse acquisition A private company takes over a public company.
- Back flip acquisition A very rare case of acquisition in which the purchasing company becomes a subsidiary of the purchased company.
- Hostile acquisition Here, as the name suggests, the entire process is done by force. The smaller company is either driven to such a condition that it has no option but to say yes to the acquisition to save its skin or the bigger company just buys off all its share, thereby establishing majority and hence initiating the acquisition.
31 Seed capital finance: It refers to the capital required by an entrepreneur for conducting research at the pre- commercialization stage. During this stage, the entrepreneur has to convince the investor (VC) why his idea/product is worthwhile. The investor will investigate the technical and economical feasibility of the idea. In some cases, there is some sort of prototype of the idea/product that is not fully developed or tested. As the risk element at this stage is very high, the investor (VC) may deny assisting if he does not see any potential in the idea.
competencies and knowledge required to launch, manage and expand business opportunities. Service related ideas Entrepreneurial opportunities are not only restricted to the manufacturer. Service sector is the most growing field these days, the world over, because of the emerging knowledge in societies and advancements in Information and Technology. So, new opportunities can be identified by understanding the linkages to different business activities. OR
- Product identification An idea should lead the entrepreneur to a definite product/service which he can sell. So the first step is to obtain a concept of the product or service suggested by one idea. We should also see whether this product is already available in the market or not. If it is, then we should identify the reason for introducing the same product or service in the market.
- Application and use Ideas should be examined for their real life use and application. If it already exists in the market, we will have to find out its present use, then we may think of modifying it for better use.
- Level of operation This is a crucial test for product/service identification. Depending on the use of the product/service the entrepreneur will produce it in a cottage industry or a small scaleā industry or a largeāscale industry.
- Cost What is the per unit cost of the product at particular level of operation? Whether this cost is comparable with that of other competitive products? These are some of the questions that have to be answered. This will ultimately decide the sale price.
- Competition Any product or service will face market competition at some stage. So market competition should be assessed through a study of the trends in demand and supply.
Variety Classic Gel Pen Executive Ball Pen Four-in-one Ball Pen (A)Selling Price per unit 15 21 36 (B)Variable cost per unit 9 14 19 (C) Contribution A-B (in Rupees)
(D) Sales Mix 20% 20% 60% Weighted contribution (CĆ D)
i. Total weighted average contribution margin= Rs.12. (1.2+1.4+10.2) ii. Breakeven Quantity for each variety BEP= Total Fixed cost/ total weighted contribution = 256000/12. =20,000 units BEP for Individual 5
accumulations. Cash flows only when actual payments are received or made. Mere sale which might be on credit, will not generate cash. E) Proforma balance sheet This document helps the enterprise to reflect the position of the business at the end of its first year. A summary of the projected assets, liabilities and net worth of the entrepreneur is depicted through proforma balance sheet. F) Breakāeven point Every firm wants to maximise its profits. The Breakeven point is that level of volume of production at which firm neither makes a profit nor a loss. Here, the total revenue is equal to the total cost of a firm, at the given level of capacity. G) Economic and social variables In view of the social responsibility of business, the abatement costs, i.e. the cost of controlling the environmental damage should also be stated in the plan. It's always advisable to mention in the business plan, the socio-economic benefits expected to acquirefrom the proposed investment. (Any 5 points in detail)
