GM02
Economic and Social Environment of Business
Assignment I
Assignment Code: 2012 GM02 B1 Last Date of Submission: 15th October 2012
Maximum Marks: 100
Attempt all Questions. All questions carry equal marks.
Section A
1. What do you understand by the socio-cultural environment of business and how is it important for business? Briefly explain with the help of suitable examples. (20)
2. Write short note on:
a. Difference between Economic Growth and Economic Development
b. Unemployment (10+10=20)
3. Bring out distinguishing features of industrial policy of 1991 and its impact on the technology status of Indian industry. (20)
4. What measures have been adopted by government to control inflation? What is the relationship between unemployment rate and inflation rate? (20)
Section B
Case Study: Auto makers may see decline in net profit
Market leaders in different categories led by Maruti Suzuki India Ltd., India’s largest seller of cars, may say net profit grew for the third quarter of fiscal 2008 as they sold more vehicles in the festival season. But most other companies, especially two-wheeler and commercial vehicle makers, are likely to report a decline in net profit or a muted growth in earnings as lending rates that are at a five-year high curbed buying and eroded sales.
Fewer trucks, passenger vehicles (cars and utility vehicles) and two-wheelers were sold in the three months ended December, and sales fell by 1.8% in that period – the third straight quarterly decline, as high interest rates forced customers to defer purchases. As many as 85% of India’s passenger vehicles and 60% of two-wheelers are financed by banks or other financiers.
The company that is likely to post the largest yearly increase in profit for the quarter ended December is Maruti, according to the average of estimates of five analysts whom Mint polled.
Maruti sold more cars in the quarter, riding on higher festive season buying and rebates. The festival season, which includes Dussehra and Diwali, is considered an auspicious time to purchase consumer durables. Maruti is expected to record a 22.53% increase in its net profit at Rs.461.2 crore for the quarter.
“Maruti would be able to enhance its profitability due to successful cost reduction, productivity improvement and increased localization,” wrote Amit Kasat and Rohan Korde, analysts at Motilal Oswal Securities Ltd. in a report.
Still, rising input/power costs, consolidation of the Manesar assembly plant and higher royalty payments owing to new model launches are challenges to margins.
Mahindra and Mahindra Ltd., India’s largest seller of utility vehicles, is expected to say sales rose by 14% as it sold more Scorpio and Bolero models. Its profits are likely to grow at a slower rate due to a decline in the sales of tractors which are more profitable, but are bought by customers who are more interest-rate-sensitive. As with tractors, commercial vehicle makers Ashok Leyland Ltd. and Tata Motors Ltd. too, are facing the brunt of higher interest rates as truck sales slowed to a single digit increase in the quarter ended December after posting double-digit growth in the past three years.
While Tata Motors is expected to post a flat growth in profit, rival Ashok Leyland is likely to say both sales and net profit declined.
In the two-wheeler segment, Hero Honda Motors Ltd., the country’s largest two-wheeler maker and the only listed company to post an increase in sales, is likely to show an increase in net profit of 9.4%.
“In two-wheelers, margins will be under pressure due to higher raw material costs, and advertising and marketing costs as a result of new launches in the case of Bajaj Auto and TVS Motor,” said Vaishali Jajoo, automotive analyst with Angel Broking Ltd.
TVS Motor Co. is introducing as many as nine new products in the year to March (its first launch was in August 2007) but cannot sell one of these, the Flame – this was to be the cornerstone of its turnaround – because the model was stuck in a patent litigation. Bajaj Auto Ltd. launched the XCD model, which helped it arrest the decline in sales, but promotional expenses on the product and rebates of up to Rs.3,000 on the Platina model are likely to dent its profit.
Questions:
i. What factors forced two-wheeler and commercial vehicle makers to report a decline in net profit? What challenges are faced by Maruti Suzuki India Ltd. in the ever-changing business environment? (20)
GM02
Economic and Social Environment of Business
Assignment II
Assignment Code: 2012 GM02 B2 Last Date of Submission: 15th November 2012
Maximum Marks: 100
Attempt all Questions. All questions carry equal marks.
Section A
1. Examine the growth of public sector in India and analyze its contribution to overall economic development. (20)
2. Write short notes on:
a. Industrial sickness in India
b. Recent Developments in Indian Banking System (10+10=20)
3. Briefly describe the Indian Financial System and analyze the significance and need for financial reforms. (20)
4. What are the various changes and improvements brought in in the competition act over the
MRTPAct, Explain (20)
Section B
Case Study: Taming the Amazon
People who lived along the Amazon were frequently rendered homeless by floods in Amazon, a river that originates in Andes Range of mountains in the western side of South America and falls in Atlantic Ocean on the eastern side of the continent. During the rest of the year, the water flow in the river fluctuated drastically, depending the temperature and the rainfall. Consequently, the people of Brazil suffered either devastating floods or water famines. The Government of Brazil studied the problem and came up with the proposal to construct a dam, a reservoir and a network of canals. With the help of dam the flood water would be stored in the reservoir, which will then be released as per need in different areas through a system of canals. The direct benefits of the project would include savings due to flood control, increased agricultural output and additional employment, while the indirect benefits consisted of additional employment and profits of the firms that process the additional agricultural output as well as the increased tax revenue of the government.
The project was to be funded by the Federal and State Governments to the extent of 89 percent, while the rest of the funds would come as aid from the governments of U.S.A. and Canada. The funding agencies together created an organization to collect the relevant data, which will form a basis of analysis by each of these agencies. Based on the data provided by this organization, the Federal Government of Brazil undertook benefit-cost analysis of both the dam-reservoir and canal components and it was decided that the project be taken up. The other funding agencies did not agree with the decision of the Federal Government. Consequently, the project was delayed for a long time and its construction could begin after a long contracted negotiations between the funding agencies.
Questions:
i. When all funding agencies were working with the same data and a standard procedure to calculate benefit-cost ratio how could they differ from each other?
ii. What main issues, according to you, would have figured in the negotiations? If you were the Principal Representative of the Federal Government how would you present the case of your government? (10+10=20)
Economic and Social Environment of Business
Assignment I
Assignment Code: 2012 GM02 B1 Last Date of Submission: 15th October 2012
Maximum Marks: 100
Attempt all Questions. All questions carry equal marks.
Section A
1. What do you understand by the socio-cultural environment of business and how is it important for business? Briefly explain with the help of suitable examples. (20)
2. Write short note on:
a. Difference between Economic Growth and Economic Development
b. Unemployment (10+10=20)
3. Bring out distinguishing features of industrial policy of 1991 and its impact on the technology status of Indian industry. (20)
4. What measures have been adopted by government to control inflation? What is the relationship between unemployment rate and inflation rate? (20)
Section B
Case Study: Auto makers may see decline in net profit
Market leaders in different categories led by Maruti Suzuki India Ltd., India’s largest seller of cars, may say net profit grew for the third quarter of fiscal 2008 as they sold more vehicles in the festival season. But most other companies, especially two-wheeler and commercial vehicle makers, are likely to report a decline in net profit or a muted growth in earnings as lending rates that are at a five-year high curbed buying and eroded sales.
Fewer trucks, passenger vehicles (cars and utility vehicles) and two-wheelers were sold in the three months ended December, and sales fell by 1.8% in that period – the third straight quarterly decline, as high interest rates forced customers to defer purchases. As many as 85% of India’s passenger vehicles and 60% of two-wheelers are financed by banks or other financiers.
The company that is likely to post the largest yearly increase in profit for the quarter ended December is Maruti, according to the average of estimates of five analysts whom Mint polled.
Maruti sold more cars in the quarter, riding on higher festive season buying and rebates. The festival season, which includes Dussehra and Diwali, is considered an auspicious time to purchase consumer durables. Maruti is expected to record a 22.53% increase in its net profit at Rs.461.2 crore for the quarter.
“Maruti would be able to enhance its profitability due to successful cost reduction, productivity improvement and increased localization,” wrote Amit Kasat and Rohan Korde, analysts at Motilal Oswal Securities Ltd. in a report.
Still, rising input/power costs, consolidation of the Manesar assembly plant and higher royalty payments owing to new model launches are challenges to margins.
Mahindra and Mahindra Ltd., India’s largest seller of utility vehicles, is expected to say sales rose by 14% as it sold more Scorpio and Bolero models. Its profits are likely to grow at a slower rate due to a decline in the sales of tractors which are more profitable, but are bought by customers who are more interest-rate-sensitive. As with tractors, commercial vehicle makers Ashok Leyland Ltd. and Tata Motors Ltd. too, are facing the brunt of higher interest rates as truck sales slowed to a single digit increase in the quarter ended December after posting double-digit growth in the past three years.
While Tata Motors is expected to post a flat growth in profit, rival Ashok Leyland is likely to say both sales and net profit declined.
In the two-wheeler segment, Hero Honda Motors Ltd., the country’s largest two-wheeler maker and the only listed company to post an increase in sales, is likely to show an increase in net profit of 9.4%.
“In two-wheelers, margins will be under pressure due to higher raw material costs, and advertising and marketing costs as a result of new launches in the case of Bajaj Auto and TVS Motor,” said Vaishali Jajoo, automotive analyst with Angel Broking Ltd.
TVS Motor Co. is introducing as many as nine new products in the year to March (its first launch was in August 2007) but cannot sell one of these, the Flame – this was to be the cornerstone of its turnaround – because the model was stuck in a patent litigation. Bajaj Auto Ltd. launched the XCD model, which helped it arrest the decline in sales, but promotional expenses on the product and rebates of up to Rs.3,000 on the Platina model are likely to dent its profit.
Questions:
i. What factors forced two-wheeler and commercial vehicle makers to report a decline in net profit? What challenges are faced by Maruti Suzuki India Ltd. in the ever-changing business environment? (20)
GM02
Economic and Social Environment of Business
Assignment II
Assignment Code: 2012 GM02 B2 Last Date of Submission: 15th November 2012
Maximum Marks: 100
Attempt all Questions. All questions carry equal marks.
Section A
1. Examine the growth of public sector in India and analyze its contribution to overall economic development. (20)
2. Write short notes on:
a. Industrial sickness in India
b. Recent Developments in Indian Banking System (10+10=20)
3. Briefly describe the Indian Financial System and analyze the significance and need for financial reforms. (20)
4. What are the various changes and improvements brought in in the competition act over the
MRTPAct, Explain (20)
Section B
Case Study: Taming the Amazon
People who lived along the Amazon were frequently rendered homeless by floods in Amazon, a river that originates in Andes Range of mountains in the western side of South America and falls in Atlantic Ocean on the eastern side of the continent. During the rest of the year, the water flow in the river fluctuated drastically, depending the temperature and the rainfall. Consequently, the people of Brazil suffered either devastating floods or water famines. The Government of Brazil studied the problem and came up with the proposal to construct a dam, a reservoir and a network of canals. With the help of dam the flood water would be stored in the reservoir, which will then be released as per need in different areas through a system of canals. The direct benefits of the project would include savings due to flood control, increased agricultural output and additional employment, while the indirect benefits consisted of additional employment and profits of the firms that process the additional agricultural output as well as the increased tax revenue of the government.
The project was to be funded by the Federal and State Governments to the extent of 89 percent, while the rest of the funds would come as aid from the governments of U.S.A. and Canada. The funding agencies together created an organization to collect the relevant data, which will form a basis of analysis by each of these agencies. Based on the data provided by this organization, the Federal Government of Brazil undertook benefit-cost analysis of both the dam-reservoir and canal components and it was decided that the project be taken up. The other funding agencies did not agree with the decision of the Federal Government. Consequently, the project was delayed for a long time and its construction could begin after a long contracted negotiations between the funding agencies.
Questions:
i. When all funding agencies were working with the same data and a standard procedure to calculate benefit-cost ratio how could they differ from each other?
ii. What main issues, according to you, would have figured in the negotiations? If you were the Principal Representative of the Federal Government how would you present the case of your government? (10+10=20)
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