case studies for class 11 business studies internal trade

Class 11th Business Studies - Internal Trade Case Study Questions and Answers 2022 - 2023

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Internal trade case study questions with answer key.

11th Standard CBSE

Final Semester - June 2015

Business Studies

Vishal Mega Mart is India's largest Fashion-led hypermarket chain with a footprint of over 204 stores, cumulative trading area in excess of 3 million square feet, in over 110 cities and towns across India. Vishal is sharply focused at the needs of consumers in Apparel, General Merchandise, Grocery and Personal Care in Tier-L, Tier-2 and Tier-3 cities and towns and is dedicated to offer the best value and choice to its millions of customers. Vishal offers clearly differentiated value to customers in the following product categories for which it has three departments. (a) Fashion: Fresh, trendy and affordable fashion comprising latest Apparel, Footwear & Lifestyle accessories collection across Men's, Women's & Kid's. (b) General Merchandise: Catering to all the household needs such as Kitchen-ware, Home Furnishings, Luggage & Travel Accessories, HomelKitchen Appliances, Toys & Sports etc. at best prices (c) Grocery and Household Needs: Catering to all daily needs with an extensive Grocery & Staples, Packed Food, Branded Personal Care and Household Needs products. Which type of large scale retail trade is being referred to here? How many departments are there? Mention two merits of the type of large scale retail trade identified in part I. Mention two demerits of the type of large scale retail trade identified in part I.  

The retail sector of Indian economy is categorized into two segments such as organized retail sector and unorganized retail sector. The latter holds larger share of the retail market. The key drives of the growth in retail consumption in India are basically (i) Clothes, Textile & Fashion Accessories (ii) Food, Grocery & General Merchandise The top 10 companies which have the most shares in organized retail market of India are:

Organized retail that has arrived in different formats as follows; Organized retail that has arrived in different formats as follows; (a) Hyper markets (b) Cash and Carry (c) Supermarkets (d) Discount Stores (e) Department Stores (f) Convenience Stores (g) Neighborhood stores (h) MBO (Multi-Brand Outlets) Organized retailing in India has been largely explored in urban or in metro cities. It's largely successful in NCR and Mumbai Region and major parts of southern portion of India. The entry of Malls, the largest form of organized retailing, which are located mainly in metro cities, in proximity to urban outskirts turned out to be a catalyst for Organized retailing. Source: https:/ / dartconsulting.cco.in/market- new/stop-10 retail-chains-in-India-success-stories-of-organized-retailing-and-stories-of-organised-retail-failure-in-india/. Which type of large scale retail trade reliance fresh is engaged in? Give three features of this type of organization. Identify two values that these large scale retail organizations communicate to the society.

Delhi Consumer's Cooperative Wholesale Store Ltd is a registered society under Delhi Cooperative Societies Act. It was registered in the year 1962. It was set up for supplying Consumer goods to its affiliated various Primary Consumer cooperative Stores functioning in various parts of the metropolis. The need for establishment of this society arose during the post China aggression period when the prices of the essential commodities went sky-high in the market due to over-all shortages of consumer goods created by the traders by hoarding stocks for profiteering. The society was required to make bulk procurement of essential consumer goods from the sources and supply the same to the affiliated Primary stores & to public at large on reasonable prices, to enable those stores to sell the consumer goods to the public at lower prices than those prevailing in the open market. The main objective of the Store is:- (a) To supply consumer goods to the public at reasonable rates through its Primary Consumer's Cooperative Stores and public through retail outlets of Apna Bazar functioning in the length and breadth of the Metropolis; (b) To supply stationery items and other general goods at competitive prices to the Govt. Schools, Govt. Offices, Para Military Forces and other officials and non-officials Organizations; (c) Functioning as nominated agency of the government for the sale of liquor through its 75 retail outlets set up in various parts of the city; (d) Tq.assist government in distribution of scares items of consumer goods during the period of temporary shortage to overcome the difficulties of the general consumers and (e) to supply dietary items to those Government Department like Social Welfare DepartmentJNGOs which are engaged in the service of down-trodden, handicapped, old and destitute on reasonable rates. 1.Give three features of consumer cooperative society. 2.Which principle is followed by it in decision making? 3.How does it utilize its profits? 4.Identity two values that cooperative society communicates to the society.

Super markets are large retailing business units selling variety of consumer goods under one roof. They operated on low margin and have self-service facility. Generally these are located in shopping centers. Goods are kept in such a way that consumer can see all that is available and choose what he wants. They take a trolley, pick up what they like, put it in the trolley, go to cash counter, pay, and take their goods after showing bill to the guard. These generally operate like departmental stores but unlike departmental stores, they do not provide services like free home delivery, credit facilities, etc. they generally also not hire any sales staff to promote sales. 1. Discuss three features of super markets. 2. Differentiate between super market and departmental store.

Sanjeev and Rajeev are two friends. They are arguing on channel of distribution. Sanjeev claims that wholesalers are of no use and must be eliminated from chain of distribution. But Rajeev opines that wholesalers playa significant role in distribution. He claims that wholesaler provides many facilities to manufacturers and retailers. Rajeev is not convinced. He feels that middlemen only add to cost and hence goods should reach from manufacturer t final consumer directly. 1.Who of the two is right in your opinion and why? 2. Mention two services that wholesalers provide to manufacturers. 3. Mention two services that wholesalers provide to manufacturers.

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• CBSE Class 11 Business Studies Chapter 10 – Internal Trade Class 11 Notes

Internal Trade Class 11 Revision Notes

In this Chapter, we will be discussing internal trade class 11 notes. We will be beginning by explaining the term Trade. Then, we will study its classification. Furthermore, we will study different types of internal trade in detail. Firstly, we will study about internal trade and its various types. Thus, we will be discussing the term wholesale-trade. We will learn about the services provided by wholesalers to manufacturers and retailers. Then, we will study the services provided by retailers to manufacturers, wholesalers, and consumers. Furthermore, we will study the different types of retailing trade. Also, we will discuss Departmental Stores, chain stores or multiple shops. We will learn the differences between Departmental Stores and Multiple Shops.

Moreover, we will acquire knowledge about Mail-Order Houses, its advantages and limitations. Furthermore, we will study about consumer cooperative store. Moreover, we will learn about supermarkets, their advantages, and their limitations. At the end of the Chapter, we will learn the usefulness of Vending machines.

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Sub-topics under Internal Trade:

• Internal Trade and Wholesale Trade : Here, we will study about internal trade and its type. Firstly, we will discuss the wholesale trade and services provided by wholesalers.
• Retail Trade : Here, we will acquire knowledge of the retail trade. Also, we will discuss the services of retailers. Furthermore, about the different types of retailing trade.
• Types of Retailing Trade : Here, we will study the different types of retailing trade i.e. itinerant retailers and fixed shop retailers in detail.
• Fixed Shop – Large Retailers and Chain Stores or Multiple Shops :  Here, we will study about Fixed Shop – Large Retailers and Chain Stores or Multiple Shops.
• Mail-Order Houses, Consumer Cooperative Stores, and Supermarkets :  Here, we will discuss the meaning, advantages and limitations of the mentioned terms.
• Role of Indian Chambers of Commerce and Industry in Promotion of Internal Trade : Here, we will study the Role of Indian Chambers of Commerce and Industry in the promotion of Internal Trade.

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CBSE Class 11 Business Studies Revision Notes

• CBSE Class 11 Business Studies Chapter 4 – Business Services Class 11 Notes
• CBSE Class 11 Business Studies Chapter 3 – Private, Public and Global Enterprises Class 11 Notes
• CBSE Class 11 Business Studies Chapter 11 – International Business Class 11 Notes
• CBSE Class 11 Business Studies Chapter 9 – Small Business Class 11 Notes
• CBSE Class 11 Business Studies Chapter 8 – Sources of Business Class 11 Notes
• CBSE Class 11 Business Studies Chapter 7 – Formation of a Company Class 11 Notes
• CBSE Class 11 Business Studies Chapter 6 – Social Responsibilities of Business and Business Ethics Class 11 Notes

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• Important Questions for CBSE Class 11 Business Studies Chapter 10 - Internal Trade

CBSE Class 11 Business Studies Chapter-10 Important Questions - Free PDF Download

Free PDF download of Important Questions with Answers for CBSE Class 11 Business Studies Chapter 10 - Internal Trade prepared by expert Business Studies teachers from latest edition of CBSE(NCERT) books. Register for Online tuition on Vedantu.com to score more marks in CBSE examination.

Study Important Questions for Class 11 Business Studies Chapter-10 Internal Trade

Very short answer questions (1 or 2 marks).

1. Differentiate between street trader and street shops

Ans: The differences between street trader and street shops are as follows:

2. What do you mean by a Cheap jack type of retail trade?

Ans: Retailers who operate temporary independent stores and continually move their firm from one location to the next, depending on the area's potential. They sell consumer goods as well as services such as watches, shoes, and bucket repair.

3. State any two advantages of supermarkets.

Ans:  Two advantages of supermarkets are-

Keep a large variety of goods in various patterns, colors, and sizes so that purchasers can make better choices. 

All sales are made in cash, and thus no bad debts exist.

4. Define Internal Trade

Ans: Internal trade refers to the buying and selling of goods and services within a country's borders. Internal Trade has the following characteristics such as:

Buying and selling takes occur in the home country, 

Payments made or received in the home country 

Only a few formalities for traders to complete.

5. List the two broad categories of trade.

Ans: Internal trade can be divided into two distinct categories: 

Wholesale trade 

Retail trade.

6. Which shops deal in specific line products?

Ans: Specialized stores deal in specific line products. Rather than selling a variety of products from multiple categories, these retail shops focus on selling a certain line of a product. Specialty stores are typically located in a central location where a big number of clients can be drawn, and they offer a diverse assortment of goods to customers.

7. Give two examples of chain stores

Ans: Walmart and Body Shop.

8. Mail order Houses provide a lot of convenience to the customers, yet they are not very popular. Why? Give one reason.

Ans: Ordering via mail Houses offer a lot of convenience to customers, but they aren't extremely popular because they need a lot of money to spend on product promotion, moreover due to chances of fraud by traders, the consumers are apprehensive regarding this method.

9. What are Vending Machines? Which type of goods are suitable for vending machines?

Ans: In many nations, coin-operated vending machines are handy for selling a variety of things such as hot beverages, platform tickets, milk, soft drinks, chocolates, newspapers, and so on. Vending machines are excellent for selling pre-packaged brands of low-cost products with high turnover and consistent size and weight. The initial cost of installing a vending machine, as well as the ongoing costs of maintenance and repair, are, nevertheless, rather significant.

10. Distinguish between a wholesaler and retailer. Give only one point of difference

Ans: The point of difference between wholesaler and retailer is given below:

Short Answer Questions (3 or 4 Marks)

11. Sandeep& Sons, Delhi orders pearl jewellery from Nasir Bros, Hyderabad. They enter into a contract and make certain that the payment will be made only on receiving the goods at Delhi in their Shop. Identify the term of trade in the above example

Ans: This example is a Cash-On-Delivery (COD) type of trade.

12. Discuss services of retailers to manufacturers and wholesalers.

Ans: The services of retailers to manufacturers and wholesalers are:

Help in the distribution of goods: Retailers assist in the dissemination of manufacturers products by making them available to end-users who may be dispersed across a vast geographic area. As a result, they supply place utility.

Personal selling: Retailers relieve producers of this work and considerably assist them in the process of actualizing product sales by engaging in personal selling efforts.

Enabling large-scale operations: Allows them to function at a somewhat large scale, allowing them to focus totally on their other tasks.

Collecting market information: Retailers are a significant source of market data about customer tastes, interests, and attitudes, which can help marketers make critical marketing decisions.

Help in promotion: Manufacturers and distributors must engage in a variety of promotional activities in order to improve product sales. Retailers take part in these activities and encourage product sales.

13. Identify the type of itinerant trader from the following: 

a) Traders who open their shop on a fixed day.

Ans: Market vendors/traders: Small retailers that open their stores at different locations on specific days or dates are known as market vendors/traders. They primarily serve people from lower socioeconomic backgrounds and specialize in low-cost consumer goods. 

b) Petty retailers who have temporary independent shops. 

Ans: Cheap Jacks : Retailers with temporary independent businesses in a business district are known as cheap jacks. They continually move from one location to the next, depending on the area's potential. They sell consumer goods as well as services such as a watch, shoe, and bucket repair.

c) Traders commonly found in populated areas.

Ans: Street Traders: Street traders are the ones who sell consumer items of everyday utility, such as stationery, eatables, readymade clothing, newspapers, and magazines, and are usually found in places where a large floating population congregate, such as around railway stations and bus stops.

14. Jyoti has shifted residence to a new settlement colony. There are no retail shops nearby. What difficulties will Jyoti face in the above case?

Ans: Jyoti's challenges in the aforesaid circumstances are listed below: 

She will be deprived of the convenience of having items available whenever she needs them. 

She will not be informed about new products that are introduced to the market. 

She will have to hoard goods, sometimes at higher prices in the absence of retail shops.

She will face inconvenience because she would have to travel a long distance for everything. 

She’ll not be able to take advantage of the credit facility, as generally retail shops provide such facilities.

She will not have access to a wide range of products under one roof.

She will not be able to take advantage of after-sale services such as home delivery. 

15. Identify the types of retailers in the following statements: 

(a) Rohan displays his goods on bus-stands or pavements. 

Ans: Street traders: They are the retailers who sell consumer items of everyday utility, such as stationery, eatables, readymade clothing, newspapers, and magazines, and are usually found in places where a large floating population congregate, such as around railway stations and bus stops.

(b) Mangal sells goods from one street to another, from one locality to another.

Ans: Peddlers and hawkers: They are little producers or petty traders that sell their items at consumers' doorsteps while travelling from place to place on a bicycle, a hand cart, a cycle-rickshaw, or on their heads. They primarily trade in uncommon and low-value items.

(c) Rajkumar sells only school uniforms.

Ans: Specialty stores: These retail establishments specialize in the sale of a specific line of a product rather than selling a variety of products of various categories. Specialty stores are typically located at a central location where a big number of clients can be drawn, and they offer a diverse assortment of goods to customers.

(d) Deepanshu deals only in second-hand books.

Ans: Second-hand goods stores: These stores sell used or second-hand goods such as books, clothes, autos, furniture, and other household items. These shops selling used goods may be in the form of a stall with very little structure like a table or a temporary platform to display the books or they may have reasonably good infrastructure, as in the case of those selling furniture, used cars, scooters, or motorcycles, which are located at street crossings or in busy streets.

16. A manufacturing Co. opens shops at different locations in India. He sells goods on cash only. The shops have identical decorations. The prices of goods are fixed. In this way they eliminate unnecessary middlemen thus benefiting the consumers.

(a) Identify the type of shop referred to.

Ans: Multiple store or a chain store. There are a lot of chain stores with comparable appearances that have sprouted up in various locations across the country. These various stores usually sell standardized and branded consumer goods with a high turnover of sales. These stores are owned by the same company and use the same merchandising tactics, as well as the same products and displays.

(b) Elaborate characteristics of such shops

Ans: The following are the characteristics of chain stores:

The goods are dispatched to each of these shops from the head office, which is located in a reasonably populous area where a significant number of clients may be approached. 

The shop is under the direct supervision of a Branch Manager, who is responsible for its day-to-day management. 

The head office is in charge of creating policies and ensuring that they are executed.

The prices of goods in such shops are fixed, and all sales are conducted in cash.

17. Vishal buys goods in larger quantities and sells them to small businessmen. 

(a) Which type of trader is Vishal? 

Ans: Vishal works as a wholesaler. A wholesaler buys the product in bulk from the manufacturer and sell it to the retailer/businessman. Because it acts as an intermediary between manufacturers and retailers, the wholesaler is an important link in the distribution network. The retail stage of distribution is where items are transmitted from the hands of small businessmen to the hands of consumers.

(b) State services to consumers of Retailers.

Ans:  Services to consumers are as follows:

Regular availability of products: Maintain consistent availability of numerous products from various manufacturers. This allows buyers to purchase things as and when they are required.

New product information: Retailers convey crucial information to customers about the arrival, distinctive characteristics, and other aspects of new products by arranging for effective product display and through their personal selling efforts.

Convenience in buying: They offer tiny quantities of goods in close proximity to residential areas and are open for long periods of time. Hence, the customers appreciate the ease and convenience with which they can purchase things.

Wide selection: Maintain a diverse inventory of products from various producers. Customers can choose from a large range of products with varied styles, colors and designs as a result of this.

After-sales services: Provides after-sales services such as home delivery, spare part supply, and customer assistance.

Provide credit facilities: Allow regular customers to apply for credit. As a result, the latter can increase their consumption.

18. Mention differences between departmental store and multiple shops.

Ans: The differences between departmental store and multiple shops are:

19. Explain the features of Departmental store

Ans: The features of a departmental store are:

Type of Customers:   Provide the best possible service to consumers in the upper section of society for whom pricing is secondary. 

Location: In the heart of a city, in a central location that caters to a big number of customers. 

Organization: Due to the vast size of these establishments, they are usually organized as a joint-stock company with a board of directors. 

Services: A departmental store incorporates both retail and warehouse services. 

Purchase and sale mechanism: They have centralized purchasing systems and sales are decentralized in several departments.

20. Enumerate the limitation of Multiple shops.

Ans: Limitations of Multiple shops are:

Limited choice: They do not sell products made by other companies. As a result, consumers have a limited choice of goods. 

Heavy reliance on top level management:  They have to rely on the top level for all advice, which takes away their ability to use their creative abilities to satisfy customers. 

Lack of effort: Employees' lack of effort can often lead to indifference and a lack of personal touch. 

Losses: Because of enormous stocks sitting unsold at the central depot, management may have to bear significant losses.

21. Explain two features, merits, and limitations of supermarket

Ans: Features 

Generally carries a full range of food and grocery items, as well as non-food convenience items.

Under one roof, they may find a variety of things to meet their needs.

Merits 

There are no bad debts because sales are made on a cash basis.

The advantages of large-scale buying and selling include decreased operating costs.

 Limitations 

Because the principle of self-service is followed, purchasers' purchasing power is limited.

 As a result, they do not receive any personal attention.

Long Answer Questions (5 or 6 Marks)

22. Discuss the services of a wholesaler to the manufacturer and retailer.

Ans: Services to Manufacturers

Large-scale production facilitation: Wholesalers receive modest orders from a variety of shops and pass them on to manufacturers.

Taking chances: Wholesale merchants deal in commodities in their own name, take delivery, and store goods purchased in huge amounts in their warehouses; they face a variety of dangers, including price drops, theft, pilferage, spoilage, and fire.

Assistance with finances: They almost always pay in cash for the products they acquire. Sometimes they also advance money to the producers for large orders, so the manufacturers do not need to keep their capital in stockpiles.

Expert advice: Because wholesalers have direct contact with retailers, they may provide expert advice to manufacturers on a variety of topics, including customer tastes and preferences, market conditions, competitive activity, and the features that buyers like.

Assistance with the marketing function: Wholesalers relieves manufacturers of many marketing responsibilities, allowing them to focus on their core business. They handle the distribution of commodities to a number of retailers, who then sell them to a huge number of customers dispersed over the country.

Facilitate production continuity: Wholesalers ensure production continuity by purchasing items as they are produced and holding them until they are needed by retailers or customers.

Storage: Wholesalers receive items when they are manufactured in factories and store them in their godowns/warehouses, thus saving time.

Services to Retailers

Availability of goods: Relieves retailers of the effort of collecting goods from numerous manufacturers and keeping large inventories of the same 

Marketing support : The wholesalers aid the retailers by performing various marketing duties and providing support. The retailers earn good profit since it helps them increase demand for various new products.

Credit: Wholesaler credit is usually extended to their frequent customers. As a result, retailers can run their businesses with a modest amount of operating capital.

Specialized knowledge: Wholesalers specialize in a single product line and are well-versed in the industry; they pass on the benefits of their specialized knowledge to retailers.

Risk sharing: By purchasing items in smaller quantities, businesses can minimize risks such as storage, pilferage, obsolescence, price reductions, and demand variations.

23. Why are consumer cooperative stores considered to be less expensive? What are their relative advantages over other large scale retailers?

Ans: A consumer cooperative store is a business that is owned, operated, and controlled entirely by consumers. The goal of such stores is to reduce the number of intermediaries who raise the cost of production and, as a result, provide better service to members. 

Cooperative stores typically purchase large quantities of goods directly from manufacturers or wholesalers and resell them to consumers at low costs. The profits made by consumer cooperative stores over the course of a year are used to pay out bonuses to members and to build up general reserves and general welfare funds or similar funds for the members' social and educational benefits. This is why consumer cooperative stores are thought to be a good idea, and are less expensive.

The following are some of the benefits of consumer cooperative stores versus large-scale retailers: 

Simple and easy to form: A consumer cooperative society is simple to create, and members' liability in a cooperative store is limited to the amount of capital they invest.

Assists the retailers: Relieves retailers of the effort of collecting goods from numerous manufacturers and keeping large inventories of the same.

Democratic formation: It is run democratically. Each member has one vote, regardless of how many shares he or she owns. 

No middlemen: The elimination of middlemen leads to cheaper prices for members' consumption items.

Cash sales: The majority of items sold in consumer cooperative stores are paid for in cash.

Convenient location: Consumer cooperative stores are typically located in public settings where members and others can easily purchase the goods.

24. Discuss the features of fixed shop retailers? Explain different types of fixed shop small retailers?

Ans : Fixed shop retailers are retail stores that have a constant location where they offer their products. As a result, they do not relocate from one location to another to service their consumers.

Characteristics:

More resources and the ability to operate on a wide scale.

Deal with a variety of items, including both consumer durables and nondurables.

High customer trust exists.

There are four types of Fixed Shop Small Retailers:

General stores 

These stores stock a wide range of products necessary to meet the day-to-day needs of customers in the surrounding areas. They stay open for long periods of time at convenient times and frequently offer credit to some of their regular customers.

Specialty store

Shops that specialize These retail establishments specialize in the sale of a specific line of a product rather than selling a variety of products of various categories. Specialty stores are typically located in a central location where a big number of clients can be drawn, and they offer a diverse assortment of goods to customers.

Street stall holders

Vendors on the street. They cater to roving clients and specialize in low-cost items such as hosiery, toys, cigarettes, soft drinks, and so on. They receive their goods from both local and wholesale sources. Because a stall's total size is so small, it can only hold a minimal amount of merchandise.

Second-hand good shops

A store that sells used products These stores sell used or used items such as books, clothing, autos, furniture, and other household items. Second-hand stores may be set up in the form of a stand with very little structure, a table or a makeshift structure, near street crossings or in busy streets.

25. Discuss the features of Mail order houses? State their merits and limitations?

Ans:  Mail order houses are retail establishments that sell their merchandise via mail. In this sort of trading, there is usually no direct personal contact between customers and sellers. 

Reaching the potential customers : To obtain orders, potential consumers are contacted by newspaper or magazine advertisements, circulars, catalogs, samples and bills, and price lists mailed to them. 

Careful Inspection: When the orders are received, they are carefully inspected for compliance with the purchasers' specifications, which are carried out through the post office.

Payment options: There may be a variety of payment options available, such as cash payment, demand draft etc. 

Suitability: Only goods that can be:

graded and standardized, 

easily transported at a low cost, 

have ready market demand, 

available in large quantities throughout the year, 

involve the least amount of market competition, 

described through pictures and other means are suitable for this type of trading.

Merits of Mail order House

Less finances required: It may be established with a small amount of money.

Eliminates middlemen: It eliminates the need for unnecessary middlemen between buyers and sellers. 

No bad debts : They do not provide credit to its consumers, thus there is no risk of bad debt.

Market potential: Big market potential because mail can reach a large number of people across the country. 

Delivery: The goods are delivered at the customer’s place, and hence the customers need not go out to purchase the goods

Limitations of Mail order House

No personal contact: There is no personal contact between buyers and sellers under the mail order selling system, which increases the chances of misunderstanding and mistrust 

Investment on product promotion: There is a lot of money spent on product promotion.

Services: There is no after-sales service, which is crucial for customer satisfaction

No credit facility: They don't provide credit facilities that discourage the customers from buying goods through this medium.

Chances of fraud: The chances of fraud exists in such a medium. At times dishonest traders defraud customers by making false claims about products or failing to honour commitments.

26. Uma, a village girl, comes to Delhi to visit her relatives. She goes with her cousin to a shop, which is centrally located. She becomes astonished by the varieties of goods which are sold here. 

(a) Identify this type of shop. 

Ans: A departmental store is a large store that sells a wide range of products organized into well-defined sections, to meet almost every customer's demand under one roof. It is divided into several departments, each of which focuses on a single type of product.

(b) Quoting lines from the above paragraph describe two characteristics of the shop. 

Ans: The following are the characteristics of departmental stores:

Central Location: These are located at a central place in the heart of a city which caters to a large number of customers.

Quotation: “She goes with her cousin to a shop, which is centrally located.”

Wide range of products under one roof: Departmental stores are known for multifarious products and services with varied styles, colours, designs all available under one roof.

Quotation: “She becomes astonished by the varieties of goods which are sold here.”

(c) Explain advantages of such shops.

Ans: The following are some of the benefits of department stores: 

They draw a huge number of clients due to their central location.

Provides a vast range of items under one roof 

Aims to provide maximum services to clients 

Organized on a very big scale, allowing them to reap the benefits of large-scale operations, notably in terms of purchasing goods 

They spend a lot of money on advertising and other promotional efforts to assist them to increase their sales.

27. Nirmala orders a mixer on the basis of an advertisement in a newspaper specifying the features, price, delivery terms. It specified that the terms of payment will be VPP only. 

(i) Identify this type of retail business. 

Ans : Mail order houses are retail establishments that offer their wares via mail. In this sort of business, there is usually no direct human contact between the buyers and sellers. Potential consumers are approached for orders through newspaper or magazine advertisements, circulars, catalogs, samples and bills, and price lists mailed to them. When the orders arrive, they are thoroughly inspected for compliance with the purchasers' demands, which are then carried out through the post office. The goods could be sent using Value Paid Post (VPP). The goods are shipped via post and are only delivered to customers on making this agreement.

(ii) Explain two advantages and two limitations of them

Ans: Advantages

Disadvantages:

28. A London based manufacturing co. manufacturing washing machines wish to add 2 new products in India namely AC’s and Refrigerators. Out of a lot of 10 applicants the co. chose two wholesale firms (headed by females) whose proposals were very competitive and attractive. The wholesaler firm of AC’s hired the services of a (differently able retailer) Hari at competitive prices to sell AC’s in Delhi, Hari informs his wholesaler firm's head that the consumers of Delhi wish that their houses are cold when they reach their homes in the scorching heat of Delhi. 

(a) Explain three services rendered by retailers to wholesalers or manufacturers. 

Ans: Three services rendered by retailers to wholesalers or manufacturers are as follows:

Help in the distribution of goods

Assist in the dissemination of their products by making them available to end-users who may be dispersed across a vast geographic area. As a result, they supply place usefulness.

Personal selling

Retailers relieve producers of this work and considerably assist them in the process of actualizing product sales by engaging in personal selling efforts.

Enabling large scale operations

Allows them to function at a somewhat large scale, allowing them to focus totally on their other tasks.

(b) Identify two values which are being adhered to in the above paragraph

Ans: The following are the values that are upheld: 

Women's Empowerment: The company chose two wholesale enterprises (both led by women) whose proposals were extremely competitive and appealing, resulting in women's empowerment. 

Social Concern: The AC wholesaler firm enlisted the help of Hari, a (differently able retailer).

29. Briefly explain the role of Chamber of Commerce and Industry in promoting internal trade?

Ans: Role of Chamber of Commerce in promoting internal trade is as follows:

Interstate movement of goods

The Chambers of Commerce and Industry assist in a variety of operations related to the interstate movement of products, including car registration, surface transportation policies, and highway and road building.

Octroi and other local levies

These are collected from people entering the state or municipal bonds. The Chambers of Commerce make every effort to ensure that their regulations do not obstruct smooth transportation or local trade.

Harmonization of sales tax structure and Value Added Tax

The sales tax is a significant source of revenue for the state. For promoting trade balance, a sensible sales tax structure and uniform rates among states are critical.

Weights and Measures and prevention of duplication brands

Weights and measures laws, as well as brand protection laws, are required to defend the interests of both consumers and traders. These must be carefully enforced.

Promotion of Agro based products

The chamber of commerce frequently interacts with various agro based associations, consumer cooperatives, farming associations etc., and assists them in selling and promoting their products.

Excise duty

The central government's primary source of revenue is the excise tax, which is levied throughout all states. The excise policy has a significant impact on the pricing system.

Promoting sound infrastructure

The Chambers of Commerce and Industry meet with government departments to discuss infrastructure investments.

Labour legislation

Labor policy that is straightforward and flexible is beneficial to industries that want to maximize productivity and create jobs. The government and the Chambers of Commerce and Industry are continually focusing on such issues.

CBSE Class 11 Business Studies Important Questions

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Internal Trade Notes for Class 11 Business Studies (PDF)

Internal Trade Notes for Class 11 Business Studies are here. You can download the Internal Trade Notes PDF to study all the topics in this chapter. Moreover the class 11 Business Studies notes include chapter summary, definitions, examples, and key pointers for Internal Trade . Thus if you are studying 11th class Business Studies, then the  Internal Trade notes  will help you easily understand the topic and ace it.

Internal Trade Notes for Class 11 Business Studies

Internal Trade is a critical part in the study of Business Studies . In India, it is taught in 11th class. Therefore the class 11 Notes for Business Studies topic Internal Trade have been compiled by teachers and field experts. They explain the complete chapter of Internal Trade in one-shot . Whether you are studying the topic Internal Trade to complete your 11th class syllabus, or for any competitive exam like JEE, NEET, UPSC, you can simply refer these notes to complete the chapter in one-shot!

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Internal Trade Notes for Class 11 Business Studies PDF

The PDF of Internal Trade class 11 notes is as follows. You can view the document here and also download it to use it anytime for future reference whenever you want to brush up your concepts of Business Studies.

Class 11 Notes for Business Studies – All Chapters

If you are studying Internal Trade, then chances are that you will study the other chapters in class 11 Business Studies. Therefore we have listed all the notes here in one place, as follows.

• Business Services Notes
• Emerging Modes of Business Notes
• Evolution and Fundamentals of Business Notes
• Forms of Business Organization Notes
• Internal Trade Notes
• International Business Notes
• Private Public and Global Enterprises Notes
• Small Business and Enterprises Notes
• Social Responsibilities of Business and Business Ethics Notes
• Sources of Business Finance Notes

Class 11 Notes for All Subjects

• Class 11  Accountancy  Notes
• Class 11  Biology  Notes
• Class 11  Business Studies  Notes
• Class 11  Chemistry  Notes
• Class 11  Economics  Notes
• Class 11  English  Notes
• Class 11  Geography  Notes
• Class 11  History  Notes
• Class 11  Maths  Notes
• Class 11  Physical Education  Notes
• Class 11  Political Science  Notes
• Class 11  Sociology  Notes
• Class 11  Hindi  Notes

NCERT Solutions for Class 11 Business Studies Internal Trade

The Internal Trade notes here help you solve the questions and answers . Also, you can complete the class 11 Internal Trade worksheet using the same. In addition you will also tackle CBSE Class 11 Business Studies Important Questions with these class 11 notes .

However if you still need help, then you can use the NCERT Solutions for Class 11 Business Studies Internal Trade to get all the answers. Internal Trade solutions contain questions, answers, and steps to solve all questions.

Notes for All Classes

Internal Trade Notes for Class 11 Business Studies – An Overview

Class 11 internal trade notes for all boards.

You can use the class 11 Business Studies notes of Internal Trade for all boards.

The education boards in India for which Internal Trade notes are relevant are – CBSE, CISCE, AHSEC, CHSE Odisha, CGBSE, HBSE, HPBOSE, PUE Karnataka, MSBSHSE, PSEB, RBSE, TBSE, UPMSP, UBSE, BIEAP, BSEB, GBSHSE, GSEB, JAC, JKBOSE, KBPE, MBOSE, MBSE, MPBSE, NBSE, DGE TN, TSBIE, COHSEM, WBCHSE .

Therefore you can refer to these notes as CBSE, CISCE, AHSEC, CHSE Odisha, CGBSE, HBSE, HPBOSE, PUE Karnataka, MSBSHSE, PSEB, RBSE, TBSE, UPMSP, UBSE, BIEAP, BSEB, GBSHSE, GSEB, JAC, JKBOSE, KBPE, MBOSE, MBSE, MPBSE, NBSE, DGE TN, TSBIE, COHSEM, WBCHSE notes for class Class 11 / Class 11th / XI / HS 1st Year / HSC / 1st PUC / Inter / HS / HSSLC Business Studies for the topic Internal Trade.

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11th Class Business Studies Internal Trade Question Bank

Done internal trade (higher) total questions - 20.

question_answer 1) What difficulties will be faced by the manufacturers if wholesalers are eliminated from the chain?

question_answer 2) "The chambers interact with the government at different levels to reorient or put in place policies which reduce trade hindrances." Comment.

question_answer 3) What difficulties will be faced by the consumers if retailers are eliminated from the chain?

question_answer 4) Explain important terms used in context of internal trade.

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Internal Trade class 11 Notes Business Studies

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 Internal Trade class 11 Notes Business Studies

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CBSE Class 11 Business Studies Revision Notes Chapter 9 Internal Trade class 11 Notes Business Studies

1. Internal Trade When buying and selling of goods and services takes place within the geographical limits of a country. It is known as internal trade.

The main features of internal trade are (i) The buying and selling of goods and services takes place within a country. (ii) The payment are made and received in the home country only. (iii) There are no or very few formalities to be completed by the traders.

2. Types of Internal Trade Internal trade can be classified into two categories.

(i ) Wholesale Trade It refers to the trade in which goods are sold in large quantities. The person who carries on wholesale trade is known as wholesaler.

A wholesaler provides many valuable services to the manufacturer as well as the retailer.

(a) Services to Manufacturer

• Facilitating large scale production
• Bearing risk
• Financial assistance
• Expert advice
• Help in marketing function
• Facilitate production continuity

(b) Services to Retailer

• Availability of goods
• Marketing support
• Grant of credit
• Specialised knowledge
• Risk sharing

(ii) Retail Trade Retail trade refers to sale of goods in small lots to the final consumers. A retailer buys goods from a wholesaler and sells them to the consumer.

(a) Services to Consumers

• Ready or quick supply
• Wide variety
• Guiding consumers
• Demonstration and after sale services
• Home delivery
• Convenient location
• Credit facility

(b) Services to Wholesaler and Manufacturer

• Ready market
• Providing information
• Risk bearing
• Distribution of goods to distant places

3. Classification of Retailers

Retailers can be classified on the following basis (i) Size (ii) Product mix (iii) Pricing (iv) Service level (v) Form of ownership

4. Types of Retail Trade Keeping in mind all the above criteria, that is size product mix, pricing and service level, the retail trade can be classified in to the following categories (i) Itinerants retailers (ii) Fixed shop retailers

5 . Itinerants Itinerants refers to retailers who have no fixed place of sale. They move from one place to another in search of customers.

6. Types of Itinerants

(i) Hawkers and Peddlers Hawkers and Peddlers moves from street to street in search of customers. The main features of hawkers and peddlers are (a) They sell a variety of goods such as fruits, vegetables, toys etc. (b) They deal with non-branded and local items. (c) They supply the goods at the door step of the customer.

(ii ) Periodic Market Trader These traders sell their goods on fixed days in different market places. Their weekly market are fixed The main features of periodic market traders (a) They sell their goods in the weekly market. (b) They deal in low price and low quality goods. (c) These traders also set up shops on the occasion of Diwali, Christmas, etc.

(iii) Street Traders These retailers display their articles on busy street corners, pavements, bus stands etc. The main features of street traders are (a) They generally operate near public places such as railway stations. (b) They deal in a variety of goods such as towels, things of daily use mirrors etc.

(iv) Cheap Jacks They display their goods in hired shops or intents for a temporary period in different localities. The main features of cheap jacks are (a) They hire small shops. (b) They shift from locality depending upon the prospectus of business. (c) They deal in low price, household articles.

7 . Fixed Retailers The retailer having a fixed place of sale are known as fixed shop retailers. Fixed shop retailers can be further classified into two categories (i) Small scale fixed retail shops (ii) Large scale fixed retail shops

8. Small Scale Fixed Retailer (i) General Stores General stores are small shops located in residential areas. The main features of general stores are (a) They have a large variety in each line of product. (b) They provides free home delivery, credit facility.

(ii) Single Line Stores Single line stores are small shops which deal with one line of products. The main features of single line stores are (a) These stores deal with one line of products. (b) These stores deal in a variety of goods in that line of product.

(iii) Specialty Stores These stores deal in a particular type of product under one product line only. The main features of specialty stores are (a) These stores are specialized in one product only. (b) They keep all the brands of that product.

(iv) Street Shops These shops are situated at street crossings, They are also known as street stalls The main features of street shops are (a) These shops have a limited space. (b) These retailers display their goods on tables, stands etc.

(v) Second Hand Goods Shops These shops deal with second-hand goods or used articles such as books. The main features of second- hand good shop (a) These shops sell used goods. (b) The goods are generally priced low because these are used goods.

(vi ) Seconds Shops There are the shops to sell goods which are not produced according to the required specification. The main features of second-hand goods shop (a) These shops deal in the products which have some manufacturing defect. (b) Goods are sold at a heavily discounted price.

9. Large Scale Retailers Large scale retailers deal in a large stock of goods and purchase goods in bulk. Features of large scale retailers are. (i) They require a huge investment. (ii) They have large size show rooms to sell goods.

The most common forms or types of large scale retailers are (a) Departmental stores (b) Multiple shops or chain stores (c) Mail order retailing (d) Consumer co-operative stores (e) Super markets (f) Franchise

10. Departmental Stores A departmental store is a large retail showroom having a number of departments under one roof each department specialised in one line of product.

(i) Advantages (a) Convenient shopping (b) Central location (c) Economies of scale (d) Elimination of middleman

(ii) Limitations (a) High operating cost (b) Lack of personal attention (c) High price (d) Not located in residential colonies (e) Huge capital

11. Multiple Shops Multiple shops refer to a number of identical retail shops located in different parts of the city.

(i) Advantages (a) Economies of scale (b) Standardised products (c) Public confidence (d) Division of risk (e) No, bad debts

(ii) Limitations (a) Limited variety (b) Lack of personal touch (c) Inflexibility (d) Divided attention (e) No facilities

12. Mail Order Retailing In mail order retailing seller contact the potential buyers through advertisements and mail publicity

(i) Advantages (a) Limited capital (b) Convenience (c) Wider market (d) No, bad debts (e) Elimination of middleman

(ii) Limitations (a) No personal contact (b) No personal inspection (c) Limited variety (d) Postal delay (e) Heavy advertising cost

13. Consumer Co-operative Store It can be defined as “A voluntary association of persons based on co-operative principles by buying in common and selling in common”.

(i) Advantages (a) Reasonable prices (b) Low operating cost (c) Cash sales (d) Economies of scale (e) Benefits from government

(ii) Limitations (a) Limited capital (b) Inefficient management (c) Lack of incentives (d) Lack of storage facilities

14 . Super Markets Super market are organised by co-operative societies as well as by private traders.

(i) Advantages (a) Wide choice (b) Low price (c) No, bad debts (d) Convenience in shopping

(ii) Limitations (a) No credit (b) Lack of personal touch (c) High cost (d) Miss handling of goods (e) Limited scope

15. Vending Machines A vending machine is a new form of direct retailing. It is a machine operated by coins or tokens. The buyer inserts a coin or token in the machine and receive a specific quantity of product from the machine.

(i) Advantages (a) Buying round the clock is possible. (b) The customer gets fresh supply of goods. (c) No, requirement of salesman.

(ii) Limitations (a) Initial investment to install the machine is quite high. (b) Machine requires regular repair and maintenance. (c) Coins of exact shape and size are required to operate the machine.

Main Documents Used In Internal Trade The following are the main documents used in the Internal trade. 1. Invoice – In case of credit purchases, a statement is supplied by the seller of goods in which he gives particulars of goods purchased by buyer such as quantity, quality, rate, total value, sales tax, trade discount, etc. It is also called a Bill or Memo. Buyer gets information all about the amount he has to pay to the seller from Invoice only.

2. Pro-Forma Invoice – The statement (or forwarding letter) containing the details of goods consigned from consigner to consignee is known as aPro-forma Invoice. It gives the particulars as regards quantity, quality, price and expenses incurred on the goods consigned. In case of consignment, consignee is an agent of consigner who is supposed to sell goods on behalf of consigner and this statement/proforma invoice is only for his information. It is also known as interim invoice.

3. Debit Note – It refers to a letter or note which is sent by the buyer to the seller stating that his (seller’s) account has been debited by the amount mentioned in note on account of goods returned herewith. It states the quantity, rate, value and the reasons for the return of goods.

4. Credit Note – It refers to a letter or note which is sent by the seller to the buyer stating that his account has been credited by the mentioned amount on account of acceptance of his claim about the goods returned by him.

5. Lorry Receipt – It refers to a receipt issued by the Transport Company for goods accepted by it for sending from one place to another. It is also known as Transport Receipt (TR) and Bilty.

6. Railway Receipt – It refers to a receipt issued by the Railways for goods accepted for sending from one station to another.

Terms of Trade The following are the main terms used in the trade. 1. Cash on delivery (COD) : It refers to a type of transaction in which payment for goods or services is made at the time of delivery. If the buyer is unable to make payment when the goods or services are delivered, then it will be returned to the seller.

2. Free on Board or Free on Rail (FoB or FOR) : It refers to a contract between the seller and the buyer in which all the expenses up to the point of delivery to a carrier (it may be a ship, rail, lorry, etc.) are to be borne by seller.

3. Cost, Insurance and Freight (CFF) : It is the price of goods which includes not only the cost of goods but also the insurance and freight charges payable on goods up to destination port.

4 E&OE (Errors and Omissions Excepted) : It refers to that term which is used in trade documents to say that mistakes and things that have been forgotten should be taken into account. This term is used in an attempt to reduce legal liability for incorrect or incomplete information supplied in a document such as price list, invoice, cash memo, quotation etc.

ROLE OF CHAMBERS OF COMMERCE AND INDUSTRY IN PROMOTION OF INTERNAL TRADE A chamber of commerce is a voluntary association of businessmen belonging to different traders and industries. Even professional experts like chartered accountants, financers and other engaged in business in a particular locality, religion or country can also become the members of chamber of commerce. Its main objective is to promote the general business interests of all the members and to faster the growth of commerce and industry in a particular locality, religion or country. Following are the main functions of chamber of commerce and Industry. (1) Conducting research and collecting statistics and other information about business and economy. (2) Providing technical, legal, and other useful information and advice to its members. (3) Publishing books, magazines and journal of business interest. (4) Making arrangement for education an training of members. Some chambers even conduct commercial examinations and award diplomas. (5) Arranging industrial exhibitions, trade fairs etc. in order to promote trade. (6) Advising the government in matters concerning industrial and economic development of the region. (7) Issuing certificate of origin to exporters (8) Representation of business interest and grievances before the government. (9) Providing a forum for discussing the common problems of business community. (10) Acting as arbitrators for solving problems and disputes among the members.

 Internal Trade class 11 Notes

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NCERT Solutions for Class 11 Business Studies Chapter 11 - International Business

NCERT Solutions are an exceptionally helpful study resource for students to prepare well for the CBSE Class 11 Business Studies examinations. This study resource provides students with thorough knowledge of the topics covered, and the solutions collated by the subject-matter experts are easily understandable. Students can download the NCERT Solutions for Class 11 Business Studies Chapter 11 – International Business in the link below in PDF and practise offline as well.

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Short Questions for NCERT Business Studies Solutions Class 11 Chapter 11

1. Differentiate between International trade and International business.

2. Discuss any three advantages of international business.

The advantages of international business are listed below:

1. International business acts as a source of earning foreign exchange reserves for the nations, which can be utilised in importing technology, petroleum and capital goods.

2. International business helps the development of both importing and exporting countries.

3. It provides a platform for the countries and producers to sell their produce to a base of international consumers. In this way, it increases employment opportunities for the people of those nations.

3. What is the major reason underlying trade between nations?

The following reasons encourage trade between nations:

1. Each country is blessed with different types of natural resources which may not be available or very scarcely available in other nations. Trading helps to make such items available to all nations.

2. Having an abundance of a resource, a country becomes specialised in that particular resource and one that can be produced locally with the available resources.

3. The cost of production and the productivity of labour will vary among countries, so it is easier to export goods that can be produced in surplus with the available expertise and import goods that a nation won’t be able to produce.

4. Why is it said that licensing is an easier way to expand globally?

Licensing is a comparatively easy way to expand globally due to the following reasons:

1. The amount of investment that needs to be made by the licensor is negligible hence it is a less expensive mode that can be adopted for entering international markets.

2. License is managed by the licensee, and thus there is less risk of government intervention in conducting operations.

3. Licensee will have good knowledge of the local market and hence will be helpful for the licensor to conduct marketing successfully.

5. Differentiate between contract manufacturing and setting up wholly owned production subsidiaries abroad.

6. Discuss the formalities involved in getting an export licence.

The following formalities are required in order to get an export license:

1. Opening a bank account with any bank that is authorised by the Reserve Bank of India and getting a registered account number.

2. Obtain an IEC (Import Export Code) from the DGFT (Directorate General for Foreign Trade) or the regional authority dealing with import-export licensing.

3. Get registered with the appropriate export promotion council and obtain a membership cum registration certificate.

4. Get registered with the ECGC (Export Credit and Guarantee Corporation) to protect itself from any type of payment risk.

7. Why is it necessary to get registered with an export promotion council?

Registering a firm with an export promotion council helps in the following ways:

1. For obtaining registration cum membership certificate

2. To reap the benefits available to the export firms by the government

3. The export promotion council will carry out promotional activities to create demand for domestic products in the international market.

4. Get support for promoting its products.

8. Why is it necessary for an export firm to go in for a pre-shipment inspection?

The pre-shipment inspection is necessary due to the following reasons:

1. It ensures that only good-quality items are exported.

2. Products get exported by a competent agency as chosen by the government.

3. Government has made it mandatory to check for export goods based on the Export Quality Control and Inspection Act 1963 and designated some agencies to carry out the task.

4. It is necessary to obtain an inspection certificate from the Export Inspection Agency for goods that are exported.

9. What is a bill of lading? How does it differ from the bill of entry?

A bill of lading differs from a bill of entry in its functionality, i.e. a bill of entry is a document that is supplied by customs and needs to be filled by the importer as soon as the goods are received. Meanwhile, a bill of lading is provided by the shipping company, and it is required at the time of the export transaction. A bill of entry contains details about the goods and the destination where it is going.

10. Explain the meaning of the mate’s receipt

A receipt that is issued by the commanding officer of the ship at the time cargo is landed on board is called a mate’s receipt. It contains the details about the vessel name, shipment date, package description, numbers and the condition of the cargo.

11. What is a letter of credit? Why does an exporter need this document?

A letter of credit is issued by the importer’s bank, and it is a guarantee to honour the payment of export bills to the bank of the exporter up to a certain amount. It is important for the exporter to get this document as this ensures that the mode of payment is protected by security and hence is a secure way to settle transactions that are international in nature.

12. Discuss the process involved in securing payment for exports.

The following steps are involved in securing payment for exports:

1. The exporter informs the importer about the shipment once it has been shipped.

2. Exporter sends important documents such as bill of lading, invoice copy, insurance policy, and letter of credit. These items are required by the importer at the time of claiming the goods on arrival and getting clearance from customs.

3. These documents are sent through the exporter’s bank along with an instruction that these should be delivered to an importer only when the importer accepts the bill of exchange.

4. The exporter bank receives the payment through the importer’s bank, and the amount is credited to the exporter’s account.

5. Immediate payment can also be received if the exporter submits the documents signing a letter of indemnity.

6. Once payment is received for exports, the exporter needs to obtain a certificate of payment from the bank. It contains all necessary documents stating that the export consignment has been presented to the import of payment and payment is received according to exchange control regulations.

Long Questions for NCERT Business Studies Solutions Class 11 Chapter 11

1. “International business is more than international trade”. Comment.

The following points will show how International business is more than international trade:

1. International business has a wider scope than international trade.

2. International trade consists of the import and export of goods and is an important part of international business, while international business encompasses many other departments.

3. International business includes services like travel, tourism, finance, banking, warehousing, insurance etc. It also consists of foreign investment and the production of goods and services overseas.

4. International trade is done on the basis of exporting goods, while international business is done by licensing, joint venture, wholly owned subsidiaries etc.

2. What benefits do firms derive by entering into international business?

Firms derive the following benefits by entering international business:

1. Firms can earn high profits by selling a product to international markets that have a low price in the domestic market than international market rates.

2. Better growth prospects for goods that are saturated in the domestic market.

3. By expanding to international markets, a firm can utilise its full capacity to produce goods and drive profits by taking advantage of economies of scale.

4. Businesses can beat the high domestic competition by exploring international markets.

5. Tap into long-term growth by expanding into international markets.

3. In what ways is exporting a better way of entering into international markets than setting up wholly owned subsidiaries abroad?

Exporting is considered a better option than setting up subsidiaries because of the following reasons:

1. Managing an export business is relatively easy as compared to managing wholly-owned subsidiaries.

2. It needs less investment as compared to subsidiaries

3. Exporting is less risky as no equity investment is required, whereas, in the case of subsidiaries, 100% equity is borne by the company. Hence, it is responsible for all the losses in case of failure.

4. Exporting has a lower degree of political risk as compared to wholly owned subsidiaries.

4. Rekha Garments has received an order to export 2000 men’s trousers to Swift Imports Ltd., located in Australia. Discuss the procedure that Rekha Garments would need to go through to execute the export order.

Rekha Garments will have to follow the procedure given below to execute the export order:

1. Rekha must inquire about the importer’s creditworthiness, in this case, Swift Imports Limited. She can also ask for a letter of credit to be provided by the importer’s bank.

2. After conducting the check, she needs to register Rekha Garments to obtain an IEC so as to receive an export license.

3. Need to obtain the pre-shipment finance from the importer’s bank so as to get raw material for production and packaging.

4. Prepare garments as per the specification of the importer. Start working after receiving pre-shipment finance from the bank.

5. Obtain a certificate of inspection from an export inspection agency or any similar authority.

6. Obtain excise clearance from the Excise Commissioner. Issue of clearance subjected to the satisfaction of the Excise Commissioner.

7. Obtain a certificate of origin which states the country where goods are produced.

8. Apply to a shipping company to get shipping space. All essential details, such as types of goods, port name and shipment date mentioned.

9. Goods get properly packed and labelled with all the essential information

10. Insure the goods against risks and obtain customs clearance.

11. Goods loaded into the ship and issued a mate’s receipt.

12. Issuing of the bill of lading on receipt of freight as a token of acceptance

13. After shipping goods, the exporter prepares an invoice, which includes the goods sent and the amount paid by the importer.

14. Exporter sends a set of documents to the banker that needs to be given to the importer on acceptance of the bill of exchange. On receiving it, Swift Imports will instruct its bank to transfer money to the exporter’s bank account.

15. The exporter collects a bank certificate of payment, producing the necessary documents and bill of exchange presented to the importer for payment, and the payment has been received according to exchange control regulations.

5. Your firm is planning to import textile machinery from Canada. Describe the procedure involved in importing.

Importing textile machinery from Canada requires the following procedures:

1. Importer should obtain IEC (Import Export Code) by applying to the Regional Import-export Licensing Authority. It is necessary to complete the import procedure.

2. Importer needs to obtain a Registration cum Membership Certificate (RCMC) which is issued by Import Promotional Council and Import Development Authority.

3. Importer needs to issue a letter of credit in favour of the exporter from the bank and instructs about documents that need to be collected from the exporter before making the payment.

4. Exporter ships goods as per the specifications communicated by the importer, and on reaching, the importer country ship captain informs the Dock Officer about imported goods and submits this to customs to obtain customs clearance.

5. Customs officer examines the bill of entry and passes it to the appraiser officer, who verifies the details and the bill is returned to the importer to collect customs duty.

6. Identify various organisations that have been set up in the country by the government to promote the country’s foreign trade.

The following organisations were set up to promote foreign trade:

1. Export Inspection Council: Established by the Government of India under Section 3 of the Export Quality Control and Inspection Act 1963. Its aim is to promote exports through quality control and pre-shipment inspection.

2. Indian Institute of Foreign Trade: It was set up under Societies Registration Act in 1963, and it is an autonomous body which is responsible for managing the country’s foreign trade. It provides training in international trade.

3. Indian Institute of Packaging: Setup in 1966 by the combined effort of the Ministry of Commerce, the Indian packaging industry and other allied industries. It serves the packaging needs of exporters and domestic manufacturers.

4. Department of Commerce: It is the apex body of the Ministry of Commerce that deals with the formulation of policies related to foreign trade and import-export policies.

5. Export Promotion Council: It is aimed at promoting exports of particular products and is registered under the Companies Act.

6. Indian Trade Promotion Organisation: Formed in 1992 under the Companies Act, 1956. It maintains close interactions among traders, government and industry and organises trade fairs involving domestic and international goods.

7. What is IMF? Discuss its various objectives and functions.

IMF, or International Monetary Fund, was established in 1945, and it is headquartered in Washington, DC. The purpose of setting up IMF was to set up a system of the orderly monetary system. Its aim is to facilitate a system of international payments and checking adjustments in exchange rates for all currencies.

1. Promoting International Monetary Cooperation among member countries.

2. Promoting the growth of employment and income and also promoting balanced growth of international trade.

3. Promoting exchange stability so as to maintain orderly exchange arrangements among member countries.

4. Facilitating international payments among member countries.

1. Providing short-term credit to member countries.

2. To determine the value of a country’s currency and alter it to bring an orderly arrangement among member countries.

3. Maintain exchange rate stability.

4. Become a lending institution of foreign currency.

8. Write a detailed note on the features, structure, objectives and functioning of WTO.

WTO, or World Trade Organisation, was established in the year 1995. It was a successor to the GATT (General Agreement on Tariffs and Trade), based in Geneva. It deals with the trading of goods and services as well as Intellectual Property rights.

The features of WTO are as follows:

1. Trade of goods and services.

2. Decisions of WTO taken by member nations based on consensus.

The objectives of WTO are as follows:

1. Reducing tariff and non-tariff barriers imposed on the country.

2. Facilitates sustainable development by using optimum resources.

3. Improve the standard of living for members of foreign countries.

The functions of WTO are as follows:

1. Act as a dispute settlement body.

2. Provides an environment where member countries are encouraged to discuss their grievances.

3. Establishing a common code of conduct to eliminate trade discrimination.

Concepts covered in this chapter are listed below:

The important topics to be focused on in the Chapter 11 of NCERT Class 11 Solutions Business Studies are mentioned bwlo –

• International business
• Nature of international business
• International business vs domestic business
• Scope of international business
• Benefits of international business
• Mode of entering into international business
• Joint venture
• India’s place in world business
• India’s foreign investment
• India’s export and import of goods
• India’s export and import of services
• Exporting and importing

Class 11 Business Studies of NCERT Solutions Chapter 11 provides a wide range of illustrative examples, which helps the students to comprehend and learn quickly. The above-mentioned are the NCERT Solutions as per the Class 11 CBSE syllabus. For more solutions and study materials of NCERT Solutions Class 11 Business studies , visit BYJU’S or download BYJU’S – The Learning App for more information.

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