Ans 1

1. Threat of New Entrants (Barriers to Entry):

• High Development Costs: Creating new airplanes requires extensive research, development, and
testing, which demands a significant financial investment. For instance, Airbus spent a whopping
$13 billion to develop the A380.
• Experience Advantage: Established companies like Boeing and Airbus have been in the industry
for a long time, accumulating experience and benefiting from a learning curve. New entrants
would face challenges catching up.
• Limited Margins for Newcomers: Airlines are often hesitant to purchase from new entrants due
to concerns about reliability and stability. This, coupled with potential price wars with established
companies, makes it difficult for newcomers to achieve high-profit margins.
2. Bargaining Power of Buyers:
• Limited Alternatives: Airlines and leasing companies have few alternatives when it comes to
purchasing large commercial airplanes. This lack of substitutes gives Boeing and Airbus some
leverage.
• Order Size Influence: Major players in the industry, such as large airlines and leasing companies,
can exert influence by placing substantial orders. However, this influence has limits, as both
Boeing and Airbus compete to maintain a minimum level of backlog orders.
3. Bargaining Power of Suppliers:
• Competitive Supplier Market: The market for raw materials and components is competitive,
giving Boeing and Airbus choices in selecting their suppliers.
• Supplier Power in Engine Manufacturing: Suppliers in the engine manufacturing sector, like
General Electric, Pratt & Whitney, and Rolls Royce, hold some bargaining power. When both
Boeing and Airbus are performing well, these suppliers can negotiate more favorable contracts.
4. Threat of Substitutes:
• Emergence of Regional Jets: Companies like Bombardier and Embraer have introduced regional
jets that serve as substitutes for traditional, larger planes like the Boeing 737 and Airbus A320.
• High-Speed Rail and Teleconferencing: Evolving technologies, such as high-speed rail and
advanced communication tools, are emerging as substitutes for certain air travel needs,
impacting the demand for traditional airplanes.
5. Intensity of Rivalry:
• Historical Duopoly: Boeing and Airbus have been the dominant players, creating a historical
duopoly with limited direct competition.
• Similar Products: While both companies offer similar products, there is brand loyalty and some
differentiation. For example, some airlines exclusively use Boeing or Airbus planes to streamline
maintenance and parts.
• Market Share Protection: Carriers often stick to one manufacturer, protecting market share and
limiting the ability of Boeing and Airbus to steal customers from each other. This loyalty can help
maintain stability in pricing.

Ans 2

1. Social Process Audit:

• Explanation: This method focuses on improving how a company manages and administers its
social programs. It evaluates whether the goals of these programs are achieved and conducts a
cost-benefit analysis.
• Example: A company runs a community outreach program to provide education. The social
process audit would assess if the program is meeting its educational objectives and if the benefits
justify the costs.
2. Financial Statement Format Audit:
 • Explanation: Social information is presented in a format similar to financial statements, like a
balance sheet or income statement.
• Example: A company showcases its environmental efforts in a report using financial-statement-
like tables. It might list the costs and benefits associated with its eco-friendly initiatives.
3. Macro-Micro Social Indicator Audit:
• Explanation: Compares a company's performance (micro indicators) against broader indicators
such as national policies (macro indicators).
• Example: A company's employment practices are evaluated against national policies on fair labor
practices to see how well it aligns with broader social expectations.
4. Constituency Group Audit:
• Explanation: Identifies and measures the preferences and attitudes of different groups like
employees, creditors, suppliers, and customers. Evaluates the company's performance based on
each group's criteria.
• Example: The company assesses how satisfied its employees are by conducting surveys and then
evaluates its performance in creating a positive work environment.
5. Partial Social Audit:
• Explanation: Evaluates a specific aspect of social performance, like energy conservation or
ecological preservation.
• Example: A company conducts a partial social audit to assess how well it is conserving energy in
its manufacturing processes, focusing on efficiency and environmental impact.
6. Comprehensive Audit:
• Explanation: Aims to evaluate the overall performance of the organization, including its social
performance across various areas.
• Example: An organization conducts a comprehensive social audit to assess its impact on the
community, employee well-being, environmental sustainability, and ethical practices.
7. Corporate Rating Approach:
• Explanation: External evaluation of a company's performance by public groups like consumer
organizations, social welfare organizations, or the media.
• Example: Consumer advocacy groups assess a company's social responsibility and assign a rating
based on factors like ethical practices, environmental impact, and community engagement.
 Ans3

C auses of Industrial Factors Examples/Explanation

Sickness
Born Sick (Internal or
External Factors)

1. Lack of experience, - Mushroom growth of consultancy Some consultancy firms prioritize making
wrong project firms<br>- Rosy hopes from financial money, leading to misguided project
selection, faulty institutions choices. Overenthusiasm from promising
planning schemes may contribute.
2. Paucity of funds - Underutilized units<br>- Heavy Inadequate funding and financial
and faulty financial investment in non-productive assets mismanagement can lead to underutilized
management units and liquidity issues.
3. Time and cost - Delays in project commissioning<br>- Large projects facing delays and cost
overruns Cost escalations overruns may lead to capital shortages and
increased production costs.
4. Locational - High-tech units in areas lacking skilled Poor choices in locating industries result in
problems labor<br>- Industries with imported mismatched resources and infrastructure.
raw materials in regions without
transport infrastructure
5. Technological - Obsolete or improper Selection of outdated technology or its
factors technology<br>- Outdated technology obsolescence can lead to industrial
during project execution sickness.
6. Wrong assessment - Faulty demand forecasting<br>- Incorrect market assessments and shifts in
of market potential Changes in market conditions consumer preferences contribute to
sickness.
Achieved Sickness
(Internal Causes)
1. Bad management - Inexperience, inefficiency, Poor management practices, including
neglect<br>- Dissensions within production and labor mismanagement,
management contribute significantly to industrial
sickness.
2. Unwarranted - Expansion beyond resources<br>- Expanding beyond capacity or diverting
expansion and Diversion of resources without resources inadequately can lead to trouble.
diversion of resources considering capability
3. Poor inventory - Mismanagement of finished goods Inadequate handling of inventories can
management and inputs lead to financial troubles.
4. Failure to - Lack of adaptation to changing Failure to adapt product mix or modernize
modernize environment production apparatus contributes to
sickness.
5. Poor labor- - Strikes, lockouts<br>- Low Unhealthy labor relations, strikes, and low
management productivity productivity negatively impact a unit's
relationship survival.
External Causes
1. Energy crisis - Power cuts, coal, and oil shortages Power and fuel shortages due to an energy
crisis affect industrial units.
2. Shortage of raw - Production setbacks, poor agricultural Units face challenges in achieving optimal
materials output capacity due to raw material shortages
caused by supply setbacks or poor
agricultural output.
 3. Infrastructural - Transport bottlenecks Transportation issues create serious
problems problems for industrial units.
4. Credit squeeze - Shortage of working capital/liquidity A credit squeeze negatively affects
constraints industrial sectors by limiting working
capital.
5. Artificial economic - Government controls on product mix Government policies and labor attitudes
constraints and prices sometimes hinder automation or
rationalization, causing constraints

Achieved sickness refers to the condition where industrial units fail after becoming operational due to internal
causes. In the context of India, several factors contribute to achieved sickness in industrial units. Here are key
points and relevant examples:
1. Bad Management:
• Explanation: Poor management practices encompassing inexperience, inefficiency, lack of
professional expertise, internal conflicts, and even dishonesty can lead to industrial sickness.
• Example in India: According to the Tiwari Committee Report (1984), approximately 65% of large
sick units in India were found to be affected by poor management. This could involve issues like
mismanagement of production, labor, resources, or internal disputes within the management.
2. Unwarranted Expansion and Resource Diversion:
• Explanation: Some companies tend to expand beyond their capabilities or divert resources to
start new units without considering the financial capability of the existing unit. This can result in
financial troubles.
• Example in India: A company expanding rapidly into various sectors without a proper assessment
of its financial capacity and capabilities may face difficulties. Diversions into unrelated businesses
can strain resources and lead to operational challenges.
3. Poor Inventory Management:
• Explanation: Inadequate management of finished goods and input inventory can create financial
troubles for industrial units.
• Example in India: If a manufacturing unit in India fails to efficiently manage its inventory, it may
face issues such as overstocking or understocking, leading to financial constraints and operational
inefficiencies.
4. Failure to Modernize:
• Explanation: Failing to adapt to the changing business environment, including modernizing the
production apparatus and adjusting the product mix, is a significant cause of industrial sickness.
• Example in India: If a manufacturing unit in India continues to use outdated technology and fails
to update its product offerings to match consumer preferences, it may struggle to remain
competitive and face operational challenges.
5. Poor Labor-Management Relationship:
• Explanation: Unhealthy labor relations, strikes, lockouts, low worker morale, and low productivity
can contribute to the operational decline of industrial units.
• Example in India: Instances of frequent strikes, disputes between labor and management, and
low worker morale in Indian industries can lead to disruptions, affecting the overall health of the
unit.
 Ans 4

How information asymmetry affects consumers of cab aggregator apps?

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ChatGPT
Information asymmetry refers to a situation where one party in a transaction has more or better information than the other party. In
the context of cab aggregator apps, information asymmetry can have several implications for consumers. Here are some ways it may
affect them:
1. Pricing and Fare Structure:
• Consumers may not have complete information about the factors that determine the pricing of rides, such
as surge pricing algorithms or dynamic pricing models. This lack of transparency can lead to uncertainty and
frustration.
2. Driver Information:
• Consumers may not have access to comprehensive information about the drivers, such as their rating
history, driving behavior, or background checks. This can impact the perceived safety and reliability of the
service.
3. Service Quality:
• Consumers may not have real-time information about the availability, condition, or maintenance history of
the vehicles used by the drivers. This lack of information can affect the overall quality of service.
4. Cancellation Policies:
• Consumers may not fully understand the implications of canceling a ride or the associated fees. The terms
and conditions regarding cancellations may not be transparent, leading to unexpected charges.
5. Data Privacy and Security:
• Consumers may not be fully aware of how their personal data is collected, used, and stored by cab
aggregator companies. This lack of transparency can raise concerns about privacy and data security.
6. Route Optimization:
• Consumers may not have access to information about the algorithms used for route optimization. This can
affect the efficiency of the ride and lead to suboptimal routes being taken.
7. Customer Support and Dispute Resolution:
• Consumers may not have clear information about the process for dispute resolution or the criteria used for
refunds. This lack of transparency can impact consumer trust in the platform.
8. Promotional Offers and Discounts:
• Consumers may not have complete information about the terms and conditions of promotional offers,
discounts, or loyalty programs. This can lead to misunderstandings and dissatisfaction.
To address these issues, cab aggregator companies can work towards improving transparency, providing clearer information to
consumers, and enhancing communication about their policies and practices. Building trust through transparency can help mitigate
the negative effects of information asymmetry and contribute to a more positive consumer experience.

How market cap on surge pricing affects cab riders affiliated to companies like Ola and Uber?
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ChatGPT
Surge pricing, also known as dynamic pricing, is a practice implemented by ride-hailing platforms like Ola and Uber to adjust prices
based on the demand and supply of rides in real-time. Market cap on surge pricing refers to the maximum multiplier applied to the
regular fare during peak demand periods. The objective is to encourage more drivers to come online and meet the increased demand.
Here's how the market cap on surge pricing can affect cab riders affiliated with companies like Ola and Uber:
1. Higher Costs for Riders:
• When surge pricing is in effect, riders may experience significantly higher fares than usual. The market cap
on surge pricing sets a limit on how much prices can increase during peak times. Without such a cap, prices
could potentially surge to extremely high levels.
2. Fairness and Consumer Perception:
 • The introduction of a market cap on surge pricing aims to strike a balance between meeting increased
demand and ensuring fairness for riders. It helps prevent excessive price hikes during peak hours, which
could be perceived as unfair and exploitative.
3. Predictability for Riders:
• The market cap provides riders with some predictability regarding the maximum fare they might have to pay
during surge pricing. This can help riders make more informed decisions, such as waiting for prices to
decrease or considering alternative transportation options.
4. Driver Availability:
• The market cap on surge pricing can influence driver behavior. While it ensures that drivers have an
incentive to come online during high-demand periods, it also sets a limit on how much they can charge. This
balance is crucial to maintaining a sufficient number of drivers on the platform.
5. Regulatory Compliance:
• In some regions, regulators may impose restrictions on surge pricing to protect consumers from exorbitant
fares. Implementing a market cap on surge pricing can be a way for ride-hailing companies to comply with
such regulations.
6. Customer Satisfaction:
• By having a cap on surge pricing, ride-hailing companies can enhance customer satisfaction. Riders are less
likely to be surprised by extremely high prices, and they may perceive the pricing structure as more
reasonable and transparent.
It's important to note that while a market cap on surge pricing provides certain benefits for riders, it also poses challenges for ride-
hailing companies in terms of maintaining a balance between supply and demand and ensuring driver incentives. Striking the right
balance is crucial for the overall success and sustainability of the platform.