Bmgt 214/414: Business Entrepreneurship 2009 Question Paper
Bmgt 214/414: Business Entrepreneurship 2009
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2009
KABARAK UNIVERSITY
UNIVERSITY EXAMINATIONS
2009/2010 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE, &
BACHELOR OF COMPUTER SCIENCE
COURSE CODE: BMGT 214/414
COURSE TITLE: BUSINESS ENTREPRENEURSHIP
INSTRUCTIONS.
This exam lasts for 2 Hours. Answer Questions 1 and 2 which are compulsory and any
other 2 Questions. In total, a candidate is to answer 4 questions which will carry 70% of
the total examination marks.
QUESTION 1. Read the following cases and respond to the questions that follow.
CASE.
You have spent a lot of time thinking about a business idea for your new venture, and
you have come up with what you think is a good one- to produce a laptop computer
with a built-in MP3 player. You think that this is a really great idea. All of your
friends in your Hostel think that it would be really cool to have an MP3 player of this
type. That way, when they are in the Library working on their term papers, they could
listen through their headphones to music that they download from the internet. So
why is your entrepreneurship professor telling you that this is not a very good idea for
founding a new firm ?
Your business idea is an incremental improvement on a product that existing firms
already produce. Sure it is a good idea, and people would buy the laptop if it were
made. The problem is that your new company is not the right company to make it.
When existing firms produce a product, like laptop Computers, they develop skills
and capabilities that make them better at producing and selling a product. This is the
idea behind the learning curve( a relationship that measures the per- unit performance
at production as a function of the cumulative number of units produced).
Companies like Dell and Apple, that already make laptops know a whole lot more
than you do about how to make and sell those computers. Your idea for putting an
MP3 player in a laptop is only a small improvement over their laptops. If Dell and
Apple wanted to compete with you all they would have to do would be to figure out
how to put an MP3 player into their existing laptops. On the other hand, to compete
with them, you would have to figure out how to make a laptop computer. What you
would have to do would be a lot harder that what they have to do, and they have more
resources that you to do it. The fact that their innovation is incremental, combined
with the experience that they have developed, puts you in a disadvantage.
But what if your business idea was to put a device under the skin of a person so that
they could download music from the internet and then listen to it whenever they
went? Okay, this might be a little too science that fiction for today, but suppose you
could do it. Because no one else has figured out how to do this yet, the new
technology would not just be an incremental improvement on an existing product or
service. It would be a radical change. No one is in the business of making devices for
downloading and listening to music or making computers, has any experience with
the type of device that you are thinking of making. So they are not a head of you on a
learning curve. As a result, you would stand a chance of creating a valuable company
to exploit this type of business idea.
(a) What would you say is the main entrepreneurial lesson in this scenario? (5 marks)
(b) Based on the case, what is incremental innovation? (5 marks)
(c) Based on the case, what would you say is the basis of comparative competitive
advantage of established firms like Dell and Apple in exploiting most opportunities
unlike the case of newcomers? (5 marks)
(d) Would you say that producing a laptop computer with a built-in MP3 player is an
entrepreneurial activity ?, justify your answer ( 2marks)
(e) Differentiate between innovation and invention and give examples from the case
study. (9 marks)
QUESTION 2
Less than five minutes. That is the amount of time your Business plan has in the
hands of many potential investors before they decide “ thumbs up” or “ thumbs
down” on it. In other words, they evaluate a document that may have taken you
weeks or even months to prepare in just two moments. For this reason, it is absolutely
imperative that you avoid errors that will doom your plan to the rejection file no
matter how good other sections of it may be. Identify and explain the “ seven deadly
sins” of new venture business plans ( 14 marks)
QUESTION 3. Assume that you have decided to enter into a partnership with two
friends. You will do most of the work. One of your friends will put up most of the
capital. The other friend will not do much work or put up much capital, but he is
widely known and will be able to bring plenty of customers to the partnership. Draw
up a suitable partnership agreement (15 marks)
QUESTION 4.
Although Kenyans are aggressive in starting Micro and Small Enterprises, it appears
that most of them have stagnated and thus failed to grow. Identify and explain the key
contributory factors to this situation and advise on the way forward (15 marks)
QUESTION 5.
Most of the Micro and small Enterprises that are being started in Kenya today are
organised as sole proprietorships. Why is this considered to be more appropriate by
the majority of the Entrepreneurs and what are the inherent disadvantages associated
with this form of business organization ?( 15 marks)
QUESTION 6.
Entrepreneurship has been viewed as a process. Justify this view by briefly but clearly
explaining the key steps involved in the process (15 marks)
QUESTION 7.
Briefly but concisely, explain the contributions of Entrepreneurship in the Economic
development of a country like Kenya (15 marks)
QUESTION 8
(a) In the views of Peter Senge (1990), what are the vital dimensions in building
learning organization? (10 marks)
(b) According to Bob Garratt (1990), what is the role of directors of an organization
towards encouraging a learning organization and overcoming learning blocks?
(5mks)
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