Short Type Questions - Entrepreneurial Opportunity, Entrepreneurship, Class 12 | Additional Study Material for Commerce PDF Download

Q1. Explain how ‘Demand’ and ‘Project Innovation & Changes’ help an entrepreneur in assessing the market. (CBSE 2013) (3 marks)
Ans. Market assessment begins with finding out the target market. Different elements which help an entrepreneur in assessing the market are :
(a) Demand Analysis
(b) Project Innovation & Changes
(a) Demand Analysis : It refers to finding out the willingness and ability of the persons to buy products or services. Demand analysis is conducted to find out the answer to the following questions :
(i) Who are the customers — individuals or companies ?
(ii) What is the economic status of the customer ?
(iii) What is the purpose of buying the product ?
(iv) What is the expenditure pattern of the customer ?
(v) What utility customer expects from the products ?, etc.
(b) Project Innovation & Changes : Another important element of market assessment is to find out the products used by competitors and other players in the market. They must find out the products used by competitors and its merits and demerits. This analysis helps an entrepreneur in preparing a product with changes and innovation according to the want of customers.

Q2. Name the parameters against which the ideas are explained with a suitable example. (CBSE 2010 Comptt) (3 marks)
Ans. The parameters against which an idea is tested are product or service identification, application and use level of operation, cost of the product or services, prevalent competition, technical complexities involved and annual turnover and profit margin.

Q3. How does market supply influence a business idea ? Explain with a suitable example. (3 marks)
Ans. Supply position of the product refers to the complete picture of the quantities of the product or service made available in the market by all the producers. Market supply estimation helps in estimating the following :
(a) The capacity to produce by a firm.
(b) Present and future changes in supplies.
(c) Evaluating the financial position of the firm, etc.

Q4. How do changes in the market influence an entrepreneur’s business concept ? (3 marks)
Ans. Market is dynamic in nature. Any changes in market always influence the entrepreneur’s business concept in the following ways :
(a) Demand : With a favourable change in the market the demand for the product may increase . The demand assessment is thus affected.
(b) Supply : The future supplies are to be adjusted according to the change. The supply may increase or decrease.
(c) Manufacturing Capacity : There may be chances of increase or decrease in supplies, so the production capacity is to be altered accordingly.

Q5. State the elements of Innovation Process ? (SQP) (TBQ)
Or
“Innovation is the process of entrepreneurship.” With reference to this statement explain the meaning of innovation and its elements. (CBSE 2014) (4 marks)
Ans.
(a) Analytical Planning : Carefully identifying the product or service features, design as well as the resources that will be needed.
(b) Resources Organization : Obtaining the required resources, materials, technology, human or capital resources.
(c) Implementation : Applying the resources in order to accomplish the plans and delivering results.
(d) Commercial application : The provision of value to customers, reward employees and satisfy the stake holders.

Q6. What are the factors an entrepreneur has to keep in mind while assessing the market. (TBQ) (4 marks)
Ans.
(1) Demand,
(2) Supply and nature of competition,
(3) Cost and price of product,
(4) Project innovation and change.

Q7. What are the various ways in which an entrepreneur spots trend ? (TBQ) (4 marks)
Ans.
(1) Read trends,
(2) Watch trends,
(3) Talk trends,
(4) Think trends.