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B.N.M Institute of Technology
Department: MBAScheme of Valuation for Internals (2013 -2014
)
Staff Name: Sridhar K and Charithra C M Designation: APSubject:
Entrepreneurship Development Code: 10MBA42
Semester: 4th Date: 05/06/13
Q.No Mark
1 (a)
1 (b)
1 (c)
2 (a)
. CVC is the investment of corporate funds directly in external
start-up companies. Corporate
Venturing refers to when a company supports innovation and new
projects internally.[
Sequential stages in Project formulation:
1. Feasibility Analysis2. Techno Economic Analysis
3. Project design and network analysis
4. Input Analysis5. Financial Analysis
6. Social cost benefit analysis
7. Pre-Investment Analysis
. Advantages of an Acquisition1. Established business.
2. Location.
3. Established marketing structure.
4. Cost.
5. Existing employees.
6. More opportunity to be creative.
Disadvantages of an Acquisition
1. Marginal success record.
2. Overconfidence in ability.
3. Key employee loss.
Overvaluation
A business plan is the blueprint of the step-by-step procedure
that would be followed to
convert a business idea into a successful business venture. A
business plan first of all
identifies an innovative idea, researches the external
environment to list the opportunities andthreats, identifies
internal strengths and weakness, assesses the feasibility of the
idea and then
allocates resources (production/operation, finance, human
resources) in the best possible
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2 (b)
2 (c)
manner to make the plan successful.
. The important feature of venture capital
1. Long-term commitment:
2. Difficulty in determining current market values
3. Limited historical risk and return data and limited
information4. Entrepreneurial/management mismatches:
5. Fund manager incentive mismatche
6. Knowledge of competition:
Various forms of Ownership :
Sole Proprietorship Partnership
Joint Stock Company
Cooperative Organizations
Sole Proprietorship
Merits:
Very easy to Form
Low Cost
Least government Interference
Complete control Prompt Decision and execution
Secrets can be preserved Flexibility of operations Maximum tax
benefits
Retain all profits
Personal interest accrue to the sole proprietor
Demerits:
Resources are limited Only reasonable risk which results in
lower profits
Possibility of hasty or wrong decisions
Limited managerial liability
Lack of Specialization Uncertain existence
Partnership
Merits of Partnership:
Easy Formation More Financial resources
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3 (a)
Collective decision making
Sharing of risk Flexibility
Complementary skills
Credit worthiness
Business SecrecyDemerits:
Unlimited Liability Uncertain existence
Limited funds
Transfer of share
Merits of Joint Stock Company:
Limited Liability
Diffused Risk More financial resources
Transferability of ownership Perpetual Existence Economics of
Scale
Professional Management
Capital Formation
Demerits:
Difficulties in Formation
Lack of Personal interest Difficult to maintain business
secrets
Delay in decision making and execution
Excessive regulations
Merits of Cooperative Organization:
Economy in cost Democratic Management
Service motive
Government regulations
Demerits:
Limited Financial resources
Political interference
Lack of personal interest Lack of Professional Management
An arrangement whereby the manufacturer or sole distributor of a
trademarked
product or service gives exclusive rights of local distribution
to independent retailers in
return for their payment of royalties and conformance to
standardized operating procedures.
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3 (b)
3 (c)
Importance of Marketing Planning:
It anticipates future developments Management by objectives is
made possible
Management by Exception is facilitated
Optimum utilization of resources It facilitates coordination
Provides basis for control
Limitation of Marketing Plan:
Lack of clarity about goals & Objectives Improper situation
analysis
Unrealistic goals Unexpected competitive moves and product
deficiencies
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