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Enterprise Growth Strategies
CBSE · Class 12 · Entrepreneurship
NCERT Solutions for Enterprise Growth Strategies — CBSE Class 12 Entrepreneurship.
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Review Crossword Puzzle
Across-2A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm.Show solution
Answer: ACQUISITION
When one company purchases a controlling interest (most or all ownership stakes) in another company (the target firm) to gain control over it, the action is called an Acquisition.
When one company purchases a controlling interest (most or all ownership stakes) in another company (the target firm) to gain control over it, the action is called an Acquisition.
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Across-3The way of life of the people.Show solution
Answer: CULTURE
Culture refers to the customs, beliefs, arts, and way of life of a particular society or group of people.
Culture refers to the customs, beliefs, arts, and way of life of a particular society or group of people.
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Across-4The management of the flow of goods between the point of origin and the point of consumption in order to meet some requirements.Show solution
Answer: LOGISTICS
Logistics is the detailed coordination and management of the flow of goods, services, and information from the point of origin to the point of consumption.
Logistics is the detailed coordination and management of the flow of goods, services, and information from the point of origin to the point of consumption.
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Across-6A combination of two companies into one larger company.Show solution
Answer: MERGER
A merger is a corporate strategy in which two companies combine to form one larger, single company, usually to gain competitive advantages, expand market share, or achieve synergies.
A merger is a corporate strategy in which two companies combine to form one larger, single company, usually to gain competitive advantages, expand market share, or achieve synergies.
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Across-8The company that allows an individual (known as the franchisee) to run a location of their business.Show solution
Answer: FRANCHISOR
A franchisor is the parent company or individual that grants the franchisee the right to operate a business using its brand name, business model, and support systems.
A franchisor is the parent company or individual that grants the franchisee the right to operate a business using its brand name, business model, and support systems.
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Across-9The basic physical and organizational structures and facilities.Show solution
Answer: INFRASTRUCTURE
Infrastructure refers to the fundamental physical and organizational structures (such as roads, buildings, power supply, communication systems) needed for the operation of a society or enterprise.
Infrastructure refers to the fundamental physical and organizational structures (such as roads, buildings, power supply, communication systems) needed for the operation of a society or enterprise.
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Across-10It refers to the difference between the value of the combined firm and the value of the sum of the participants.Show solution
Answer: SYNERGY
Synergy is the concept that the combined value and performance of two companies merged together will be greater than the sum of the separate individual parts. It is expressed as: Synergy = Value of Combined Firm − Sum of Values of Individual Firms.
Synergy is the concept that the combined value and performance of two companies merged together will be greater than the sum of the separate individual parts. It is expressed as: Synergy = Value of Combined Firm − Sum of Values of Individual Firms.
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Down-1McDonald's works under this arrangement.Show solution
Answer: FRANCHISE
McDonald's operates under the franchise arrangement, where individual franchisees pay fees and royalties to McDonald's (the franchisor) to run outlets using its brand, menu, and operational systems.
McDonald's operates under the franchise arrangement, where individual franchisees pay fees and royalties to McDonald's (the franchisor) to run outlets using its brand, menu, and operational systems.
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Down-4The action of leading a group of people.Show solution
Answer: LEADERSHIP
Leadership is the action or skill of guiding, directing, and motivating a group of people towards achieving a common goal.
Leadership is the action or skill of guiding, directing, and motivating a group of people towards achieving a common goal.
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Down-5The action of working with someone to get something done.Show solution
Answer: COLLABORATION
Collaboration is the process of two or more individuals or organizations working together to achieve a shared objective.
Collaboration is the process of two or more individuals or organizations working together to achieve a shared objective.
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Down-7The action of becoming larger or more extensive.Show solution
Answer: EXPANSION
Expansion refers to the process by which a business grows in size, scale, market reach, or product range to increase its operations and profitability.
Expansion refers to the process by which a business grows in size, scale, market reach, or product range to increase its operations and profitability.
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Down-11A company that comprises multiple different corporations.Show solution
Answer: CONGLOMERATE
A conglomerate is a large corporation that is made up of several different, often unrelated, businesses or corporations operating under one parent company.
A conglomerate is a large corporation that is made up of several different, often unrelated, businesses or corporations operating under one parent company.
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Down-12The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.Show solution
Answer: LEVERAGE
Leverage refers to the use of borrowed capital or financial instruments to amplify the potential return (or loss) on an investment. It increases both the risk and the reward of a financial position.
Leverage refers to the use of borrowed capital or financial instruments to amplify the potential return (or loss) on an investment. It increases both the risk and the reward of a financial position.
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Let's Revise — Section A (Answer in about fifteen words)
A.1What are the two ways in which an organization can expand?Show solution
Given: Question about modes of organizational expansion.
Answer: An organization can expand in two ways:
1. Internal (Organic) Expansion – growing by using its own resources.
2. External (Inorganic) Expansion – growing through mergers, acquisitions, or franchising.
Answer: An organization can expand in two ways:
1. Internal (Organic) Expansion – growing by using its own resources.
2. External (Inorganic) Expansion – growing through mergers, acquisitions, or franchising.
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A.2Who is a franchisor?Show solution
Answer: A franchisor is the parent company or individual who grants another party (the franchisee) the right to operate a business using its established brand name, business model, and support systems in exchange for fees or royalties.
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A.3Who is a franchisee?Show solution
Answer: A franchisee is an individual or company that purchases the right from the franchisor to operate a business outlet using the franchisor's brand name, products, and business model, paying fees or royalties in return.
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A.4What is franchising?Show solution
Answer: Franchising is a business arrangement in which the franchisor (owner) grants the franchisee the right to use its brand name, business model, and operational systems to sell goods or services in exchange for a fee or royalty.
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A.5Which is the most popular form of franchising?Show solution
Answer: The most popular form of franchising is Business Format Franchising, where the franchisor provides the franchisee with a complete business system including brand name, operating procedures, marketing support, and quality standards (e.g., McDonald's, Subway).
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A.6What is acquisition?Show solution
Answer: Acquisition is a corporate action in which one company (the acquirer) purchases most or all of the ownership stakes of another company (the target) in order to assume control over it.
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Let's Revise — Section B (Answer in about fifty words)
B.1Explain in brief the three ways in which an organization can expand externally.Show solution
Given: External expansion strategies of an organization.
Answer: An organization can expand externally through three ways:
1. Merger: Two or more companies combine to form a single, larger company. Both entities lose their individual identities.
2. Acquisition/Takeover: One company purchases a controlling interest in another company. The acquired company may or may not retain its identity.
3. Franchising: The franchisor grants the franchisee the right to operate a business using its brand name and business model in exchange for fees or royalties.
Answer: An organization can expand externally through three ways:
1. Merger: Two or more companies combine to form a single, larger company. Both entities lose their individual identities.
2. Acquisition/Takeover: One company purchases a controlling interest in another company. The acquired company may or may not retain its identity.
3. Franchising: The franchisor grants the franchisee the right to operate a business using its brand name and business model in exchange for fees or royalties.
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B.2Enumerate the importance of franchising.Show solution
Given: Significance/importance of franchising as a business model.
Answer: The importance of franchising includes:
- It allows rapid business expansion without heavy capital investment by the franchisor.
- It provides the franchisee with an established brand and proven business model, reducing risk.
- It creates employment opportunities in local markets.
- It ensures standardized quality of products and services across all outlets.
- It facilitates market penetration in new geographic areas quickly.
- It is a low-risk method of starting a business for the franchisee.
Answer: The importance of franchising includes:
- It allows rapid business expansion without heavy capital investment by the franchisor.
- It provides the franchisee with an established brand and proven business model, reducing risk.
- It creates employment opportunities in local markets.
- It ensures standardized quality of products and services across all outlets.
- It facilitates market penetration in new geographic areas quickly.
- It is a low-risk method of starting a business for the franchisee.
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B.3Differentiate between consolidation and merger.Show solution
Given: Difference between consolidation and merger.
| Basis | Merger | Consolidation |
|---|---|---|
| Meaning | Two companies combine; one company absorbs the other. | Two companies combine to form an entirely new company. |
| Identity | One company retains its identity; the other ceases to exist. | Both original companies cease to exist; a new entity is formed. |
| Example | Company A absorbs Company B; Company A continues. | Company A + Company B = Company C (new entity). |
In short, in a merger one firm survives, while in a consolidation both firms dissolve and a brand-new firm is created.
| Basis | Merger | Consolidation |
|---|---|---|
| Meaning | Two companies combine; one company absorbs the other. | Two companies combine to form an entirely new company. |
| Identity | One company retains its identity; the other ceases to exist. | Both original companies cease to exist; a new entity is formed. |
| Example | Company A absorbs Company B; Company A continues. | Company A + Company B = Company C (new entity). |
In short, in a merger one firm survives, while in a consolidation both firms dissolve and a brand-new firm is created.
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B.4Name the two forms that merger can take place.Show solution
Given: Forms of merger.
Answer: A merger can take place in two forms:
1. Merger through Absorption: One company absorbs another company. The acquiring company retains its identity while the acquired company ceases to exist.
*Example:* Company A absorbs Company B; only Company A survives.
2. Merger through Consolidation: Two or more companies combine to form a completely new company. Both original companies cease to exist.
*Example:* Company A + Company B = Company C (new entity).
Answer: A merger can take place in two forms:
1. Merger through Absorption: One company absorbs another company. The acquiring company retains its identity while the acquired company ceases to exist.
*Example:* Company A absorbs Company B; only Company A survives.
2. Merger through Consolidation: Two or more companies combine to form a completely new company. Both original companies cease to exist.
*Example:* Company A + Company B = Company C (new entity).
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B.5Explain the types of acquisition.
B.6What is value addition? Explain by giving examples.
Let's Revise — Section C (Answer in about one hundred and fifty words)
C.1Explain the types of franchising.
C.2What are the disadvantages of franchising to the franchisee?
C.3What is synergy? In what forms can it take place?
C.4What are the different types of value added?
Let's Revise — Section D (Answer in about two hundred and fifty words)
D.1Explain the advantages of franchising, both for the franchisor and franchisee.
D.2Explain in detail the types of mergers.
D.3What do you think are the reasons for failure of merger and acquisition?
D.4What is meant by moving up the value chain? Explain with the help of an example.
D.5Explain in detail Porter's Generic Value Chain with the help of a diagram.
D.6Explain the requirements for value chain management.
Let's Revise — Section E: HOTS (High Order Thinking Skills)
E.aA merger between firms that are involved in totally unrelated business activities.
E.bA merger occurring between companies in the same industry.
E.cIt takes place between two companies that deal in the same products but in separate markets.
E.dIt takes place between two business organizations that deal in products that are related to each other and operate in the same market.
E.eIt is between two companies producing different goods or services for one specific finished product.
Let's Revise — Section F: Application Based Questions
F.1ABC Company, manufacturing shoes, has taken over XYZ Company which also manufactures shoes at a small scale. What do you think will be the reason for this kind of takeover?
F.2Vimal Company Ltd., were earlier producing pencils, now they have decided to further venture into the field of notebooks and paper. What do you think is the company attempting to do? Identify and explain the concept.
Let's Revise — Section G: Activities
G.1Look around in the market for a product of your interest. Suggest some ways in which the company can move up their value chain.
G.2Find out in your area if there are any shops which are run on the franchise model and assess the success of those firms.
G.3Make a list of major companies which have merged or have acquired some other company and state whether they are successful or unsuccessful, giving reasons.
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What are the important topics in Enterprise Growth Strategies for CBSE Class 12 Entrepreneurship?
Key topics in Enterprise Growth Strategies include Enterprise Growth Strategies - Chapter Overview, Enterprise Growth Strategies — Chapter Overview, Merger vs Acquisition: Key Differences and Decision Flow. These are the concepts CBSE Class 12 examiners draw on most — study them first, then practise related questions.
How to score full marks in Enterprise Growth Strategies — CBSE Class 12 Entrepreneurship?
Start by understanding all key concepts. Practise previous year questions from this chapter. Revise formulas and definitions regularly. Use flashcards for quick revision before the exam.
Where can I get free NCERT Solutions for Enterprise Growth Strategies Class 12 Entrepreneurship?
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Sources & Official References
- NCERT Official — ncert.nic.in
- CBSE Academic — cbseacademic.nic.in
- CBSE Official — cbse.gov.in
- National Education Policy 2020 — education.gov.in
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