MANAGERIAL ECONOMICS

ASSIGNMENT -I
1. (a) Cultural environment.
(b) Tiny sector.
(c) Regulatory environment.
(d) Foreign collaboration.
(e) Liberalisation.
(f) Symptoms of sickness.
2. State the changing role of government in business.
3. How do you assess the impact on legal environment on business?
4. Explain the structure of Indian industry.
ASSIGNMENT -II
5. Describe the features of recent industrial policy of India.
6. Critically examine the EXIM policy of India.
7. Enumerate the financial sector reforms introduced in India.
8. Cast study
Nicholas Piramal India, a giant in the pharmaceutical market, achieved a sale growth of 26% in 2003-04 at
about Rs. 1,435 crore, its net profit rose by 60% from Rs. 118 crore in 2002-03 to Rs. 188 crore in 2003-04.
Nicholas Piramal had a different growth strategy as it started as a small player with big dreams. The
strategy was organic growth coupled with acquisitions. Piramal acquired nine entities and integrated them
quickly into the parent company to deliver higher growth from the acquired portfolio.
Nicholas Piramal is also focusing on exports market. It has decided to partner with innovator companies in
global markets, rather than compete or patent litigate against them. Building on this base, the company has
built an export model that delivers the ‘India advantage’ to the global firms. It plans to provide end-to-end
outsourcing solutions across the pharmaceutical life cycle, from custom-made synthesis and bulk
intermediates to formulations. it has established four process development groups at multiple locations in
India and has also set up a 100% subsidiary in the US for closer customer reach. Nicholas Piramal believes
that the future growth driver will be exports, ably supported by a strong domestic market.
Questions :
(a) What are the growth strategies formulated by Nicholas Piramal to explore the opportunities?
(b) What are the risk factors that the company may face in international market?
ASSIGNMENT - I
1. (a) Economic analysis
(b) Delphi technique
(c) Opportunity cost.
(d) Differential pricing.
(e) Concept of profit
(f) Payback period.
2. Explain different methods of estimating demand for a product.
3. State the managerial uses of production function.
4. Critically examine the behavioral theory of firm.
ASSIGNMENT - II
5. Enumerate the nature of economics of risk and uncertainty.
6. Elucidate the relationship between cost and output in the long term.
7. State the techniques employed for decision making.
8 Mr. Soma Sundaram has recently taken over as the new chief of the Marketing Division of Hilltop
Refrogeratopm Ltd., a reputed manufacturer of air – conditioners of window – mount and car varieties.
In the recent Board meeting Sundaram tried to convince the Board members that at present the best
way to improve profitability of the company is through product diversification. According to his, since it
is almost always economically justifiable for the company to expand through extending the product line,
the company would do good to start producing refrigerators, besides air-conditioners. I concede that the
refrigerator market is highly competitive and is dominated by two giants firms – ever cool and polar
bear. Both these companies are producinga variety of refrigerators but the economy class refrigerators
are their forte. It is but logical for us to go in for the production of premium (up-scale, high price)
refrigerators. This will not only expose us to lesser competition but also fetch high profit margins for the
company. I must confess that the refrigerator sales involve substantial discounts which vary over
seasons. The MD of hilltop turned towards the purchase manager for his opinion. He informed that, "the
market supply of good quality compressor units for the refrigerators is erratic and its price has been
found to spurt up occasionally. I believe that the refrigerator business would be successful only when we
have our own facility to produce good quality compressors.’ When the chief of the production unit asked
about his reactions was not ready to try this proposal. According to him ‘The compressor production is a
highly automated process. Creating compressor production facilities in the company for the proposed
refrigerator project, no doubt, seem justified. But, there are some aspects of production which do not
justify this project. I shall study them in detail and send a detailed note to every member within a week".
(a) What do you think are the issues which the production manager will highlight in this
case?
(b) Can you point out some other flaws in the project proposal?
(c) Can you suggest an alternative proposal?

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