Case Studies
Fundamentals of Business

1. Renuka, a teacher in Rose Public School, also teaches some poor children after her school hours. She does not charge anything from them. 

Answer the following questions:

a. Teaching in a school by renuka comes under which type of human activity?

b. Teaching poor children comes under which type of human activity?

2. Somesh is running a stationery shop in local market. His cousin Neelam works as a finance manager in a reputed IT company.

In the context of the above case:

a. Identify the different types of economic activities both Somesh and Neelam are engaged in.

b. State any three points of differences between the two different types of economic activities as identified in part a of the question. 

3. Mr. Rakesh Bhola is a well known doctor in Meerut. He runs his private clinic under the name ‘Bhola Clinic’. 

In the context of the above case:

a. Identify the type of economic activity that Mr. Rakesh Bhola is engaged in.

b. State any three features of the type of economic activity as identified in part a. of the question.

4. After appearing for her board exams, Arya sold off her old textbooks at Quickr at a profit. Will this transaction be constituted as a business activity? Why or why not? Also, state the underlying feature of business. 

5. Anu and Nisha started their own separate outlets in Delhi and Patna respectively to earn their livelihood. Anu buys readymade garments from various manufacturers and sells them in her store. However, Nisha designs her own range of clothing. She gets them made through her team of designers and sells them under the brand name ‘Nisha Fashions’. In recent past, both of them have incurred huge losses due to changes in consumer tastes and fashions. Also, despite being in this line of business for a long time, they cannot say with certainty as to whether they will earn adequate profits or not in future. 

By quoting lines from the paragraph, identify the various features of business discussed above. 

Bunty Enterprises Ltd. has been earning high profits over the years. As a result, its owner is leading a decent standard of life. He also plans to open a new branch in the coming months. 

In context of the above case:

Identify the points which highlight the role of profits in a business.

6. Roshan Ltd. is a Bangalore based Indian MNC engaged in design, manufacturing and marketing of products related to power generation, transmission and distribution. It has also set up a factory for manufacturing solar lanterns in a remote village as there was no reliable supply of electricity in rural areas.

a. Identify and explain the type of objective of business fulfilled by Roshan Ltd. by setting up a factory in rural areas.

b. Explain any four other objectives of business.

7. Karan Sharma wants to start a business of fashionable items. But he is hesitating to go ahead with his plans because of the various kinds of risks which are inherent in every business. He consults his friend Sushil in this regard for guidance about ways to overcome such situations effectively in his business.

In the context of above case:

a. Describe briefly the various types of business risks.

b. Explain briefly any two causes of business risks. 

c. State any two suggestions which Sushil is likely to give to Karan to overcome such situations effectively in his business.

8. Harsh runs a well known departmental store in Delhi. He procures different kinds of products from all over the country through railways, roadways and airways. He also owns a godown to hold the stocks. He has also taken an insurance policy worth Rs 10 crores for his business. Moreover, he has taken a loan of Rs 2,00,000 from ICICI Bank in order to meet short term financial needs of his business. He has placed information about his store on the hoardings, bill boards in order to popularize them.

a. Define auxiliaries to trade.

b. Identify the different auxiliaries to trade that are being used by Harsh in his business by quoting lines from the paragraph.

9. Manu and Vicky are running a computer shop in Nehru Place, Delhi. Their main job is to purchase different parts of computers and then assemble them into full-fledged computers. They sell these computers under the brand name 'Cheap Computers' and earn a profit of 10 percent on cost. Their business was very successful and popular. But, one day, they had to suffer heavy loss due to theft in their shop. Fortunately, they had taken the insurance policy which helped them in getting compensated for the losses. After this incident, they installed CCTVs in their shops to be more cautious. Gradually, their business was back to normal. 

Quoting the lines from the above case study, identify and explain the various features of business. 

10. Anish wants to start a business of stationery items in Delhi. But he is having apprehensions as it will involve hindrances related to moving goods from place of production to customers, storing goods due to time gap between production and consumption, risk of fire, theft, accidents, damage, providing information to customers about the products, procurement of funds etc. 

He approaches his friend Amir to discuss his apprehensions. Amir, who, is engaged in importing shoes for the purpose of exporting them to other countries, advises Anish to carry on with his plan and also guides him about the functions performed by Commerce to remove various hindrances involved in the process of exchange of goods. 

After getting the advice from Amir, Anish starts the business and finds no major problems. 

In context of the above case, answer the following questions.

a. Name the type of trade under which Amir is doing the business.

b. Name the type of trade under which Anish is doing the business.

c. Name and briefly explain the activities which can help Anish in removing the various hindrances mentioned in the above case.