VTU MBA Module 6-C

1. 3
MODULE 6
Private Sector, SSI and Industrial Analysis
(Part 3)

2. Growth of Private Sector
The trade and investment policies have
encouraged Private Sector in the following
sectors:
1. Growth of the telecom sector, (Ex: Bharati
Airtel, Reliance Communication, and so on)
2. Growth of transport sector, (Private
transport)
3. Growth of energy and water sector. (Private
involement in Electricity/ Power sector)

3. Growth of Private Sector
Problems for establishing Private Sector:
● The objective of private players is PROFIT,
● Private sector focus on Profit Oriented Sectors like Consumer durable
goods,
● Private players focus on poor quality, Ex: Power Industry leading to power
cuts and inefficient services rendered to customers,
● Lack of technical knowledge leads to high cost in infrastructure,
● Private sector, emphasize on massive imports and brand by assembling
goods rather than making themselves,
● Due to massive imports, it effects international trade leading to trade deficit,
● In compared to Public Sector, Private Sector experience more 'Industrial
Disputes'.

4. Growth of Private Sector
Small Scale Sector - Introduction:
● Small Scale Sector has played a vital role in Socio-Economic-
Transformation of our economy,
● SSI requires lesser investment and delivers attractive results, contributing to
our GDP. (Presently Investment is raised to Rs. 5 Crores in selected sectors
(Export Oriented) and Rs. 1.5 Crores for others)
● SSI exhibits tremendous capacity in employment generation, greater
utilization of available resources,
● SSI Promotes inter-sectoral linkage (Economically Backward and Forward
Areas),
● SSI has shown a greater contribution in the field of Garments,
Pharmaceuticals, Hand tools, Handicrafts and so on,
● SSI projects are small and is possible to execute with a lesser manpower
and other resources.

5. Small Scale Industries
Objectives of SSI: The Government of India emphasize on SSI
with the following objectives:
● To eliminate unemployment by generating quick employment,
● To create new entreprenuers in the economy,
● To balance the growth of Towns and Villages, particularly economically
lagging regions,
● To encourage regional development, contributing the entire country,
● To encourage and ensure equitable distribution of Income,
● To effectively utilize untapped resources,
● To improve the standard of living.

6. Small Scale Industries
Benefits of SSI:
● SSI is an another diversified Industrial Structure,
● SSI helps in proper utilization of localily available, Human Resources and
Raw Material Resources,
● SSI help in creation of employment, with low investment,
● SSI can help in preventing creation of monopolies,
● SSI can help in creation of pool of skilled and semiskilled labors required for
future expansion of Industries,
● SSI help in linkage between the forward and backward areas,
● SSI help to promote equitable income distribution,
● Export oriented SSI help in favourable balance of International Trade.

7. Small Scale Industries
Advantages for SSI: There are many advantages for SSI,
● SSI enterprises can be operatable as per the convience of the owner in
terms of space, finance, product and manpower. (All resources are flexibily
available),
● SSI help to supply goods required by bigger industries,
● SSI can be made operatable at a far lesser period of time in compared to
large firms, SSI requires maximum 6 months to 1 year to make it operative,
some of the SSIs start its operation even in 3 months,
● SSI's requirement of man power is locally available, also are far cheaper
than hiring labor from near by towns and cities,

8. Small Scale Industries
Advantages for SSI: There are many advantages for SSI,
● The District Authorities under the directions of the center and state, facilitate
technology to execute the project,
● Parent firms in private sector too encourage new entreprenuers with latest
and innovative technology,
● SSI is the best way to engage all all relatives, friends in business operations.
● SSI is promoted by the Government of India and provide exemption of
Excise Duty for goods manufactured,
● SSI employs local people, hence the creation of trade union is almost free.
(No trade union formation)

9. Small Scale Industries
Limitation of SSI: Unlike medium and large industries, SSI too
have some limitations:
● Non Availability of Skilled labor,
● Transport, Communication and Electricity are a challenging task,
● Professional Marketing too becomes a challenging aspect, if products
manufactured are for direct sale to consumers,
● Limitations to high tech technology,
● SSI established far off from large firms, make it difficult to supply,

10. Small Scale Industries
Contribution of SSI to economic development: SSI is vital
and a good contributor towards the growth of the economy:
● Contribution to Production of Industrial and Consumer Goods,
● Contribution in support to the large enterprises, by manufacturing and supply
of accessories goods,
● Contributes for Exports, by export oriented SSI,
● Contribute in employment for the local people,
● Contribute in utilization of resources,
● Contributes in balancing in the region on development,
● Contribute its share in the GDP on Industrial Production.

11. Industry Analysis
Industry Analysis:
● Industry Analysis refers to the Market Assessment tool designed to provide a
business with the idea of the complexity of a particular industry.
● Industry Analysis involves reviewing the following factors:
1. Economical, 2. Political and 3. Market Factors.
These factors are considered as they influence the way the industry
develops. The others refer to the
1. Power of the Buyers and Suppliers,
2. Conditions of the competitors, and the
3. New Market Entrants (Fresh Entry in the market)

12. Industry Analysis
● PORTER's FIVE FORCE MODEL FOR
INDUSTRY ANALYSIS:
1. Threat of new entrants to a market,
2. Bargaining power of suppliers,
3. Bargaining power of customers,
4. Threat of substitute products,
5. Degree of Competitive rivalry
(competitiveness).

13. Industry Analysis

14. Industry Analysis

15. Industry Analysis

16. Small Scale Industries

17. Industrial Analysis

18. Industrial Analysis

19. Industrial Analysis

20. Industrial Analysis

21. Industrial Analysis

22. Industrial Analysis