Chapter 3 Private Public and Global Enterprises Solutions
Question - 11 : - Why are global enterprises considered superior to other business organisations?
Answer - 11 : -
Global enterprises enjoy an upper hand on all other business organisation due to these reasons:
1. Wide market: As the operations of the global enterprises expand among continents they have access to a large geography and resources.
2. Diversifying risk: By operating at different countries and forging joint ventures with organisations of that country, the multinationals can reduce risk, as loss made in one country can be compensated with profit from other country.
3. Funds: As these enterprises have good financial resources, they raise funds from many sources and borrow funds from banks having an international presence.
4. Research and Development: They have a more organised R& D network which is also well funded that makes developing new products quicker than others.
5. Marketing: Global companies have more aggressive style of marketing that drives sales, and they come up innovating marketing techniques that results in high sale volume.
Question - 12 : - What are the benefits of entering into a joint venture and public private partnership?
Answer - 12 : -
Joint venture is a type of business agreement where two organisations associate together for obtaining mutual benefits and profits. The organisations share risks and profits of the business apart from resources and finance. Here are some of the benefits of joint venture:
1. The available resources and the corresponding operating activities of the business are pooled when a joint venture is formed. It helps in growth of the business.
2. This association helps in expansion of business by expanding the geographical reach which helps reach new markets.
3. By forming a joint venture, companies get access to latest technologies with minimum investment.
4. In a joint venture, the technical knowhow is shared between companies which leads to innovation in product
5. The cost of production is reduced as raw materials are available in plenty.
A public private partnership is where all the risks of business are evenly distributed. In such a partnership the investor risk is less. Here are some benefits of PPP:
1. Risk sharing is reduced as it gets shared with the public
2. By sharing tasks and responsibility the project gets finished faster.