Mid-Term Test Semester III / Year 2013

COURSE COURSE CODE TIME DEPARTMENT LECTURER

: ENTREPRENUERSHIP : TMGT2013 : 1 Hour : BUSINESS MANAGEMENT : JACQUELINE QUEK

Students ID Batch No

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Notes to candidates: 1) The question paper consists of 6 pages including this cover sheet. 2) Answer All Questions on your answer scripts 3) Return the question paper together with your answers after the examination.

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Section A: Multiple-Choice Questions Instructions: Circle the most appropriate answer. 1. Three primary reasons that people become entrepreneurs and start their own firms are: a) pursue their own ideas, realize financial rewards, and eliminate risk in their lives b) do what they were "born" to do, be their own boss, and capture more of the spotlight c) take big risks, be their own boss, and do what they were "born" to do d) be their own boss, pursue their own ideas, and realize financial rewards e) capture more of the spotlight, pursue their own ideas, and take big risks 2. Terrence Chee recently launched a medical research centre. He is very excited about the business because he strongly believes that the products his firm is working on will make a positive differences in peoples' lives. Terrence's excitement results from which of the following characteristics of entrepreneurs? a) passion for the business b) tenacity despite failure c) desire to be his own boss d) desire to be on the cutting edge of technological change e) desire to gain financial rewards 3. Poi-John and Iris launched a firm several years ago and have been particularly successful in introducing new products to the marketplace. One thing that both of them are particularly good at is the ability to fashion a solid business idea into a viable business This ability is most closely related to which of the following characteristics of successful entrepreneurs? a) passion for the business b) execution intelligence c) tenacity despite failure d) product/market focus e) a desire for recognition 4. According to entrepreneurship theory, entrepreneurs are ________ risk takers. a) forceful b) moderate c) high d) low e) aggressive 5. CSK Cafe is a coffee-shop that has been owned by Jayson Poon for the past nine years. The shop offers a menu that is typical for coffee-shops around town, and affords Jayson a level of income that is similar that what he would earn in a conventional job. CSK Caf is an example of a: a) salary-substitute firm b) entrepreneurial firm c) standard-of-living firm d) lifestyle firm e) everyday-life firm

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6. Hui Shin is starting a fashion boutique in KSL City. She wants to open her store during the time period in which a business like hers can realistically enter the new market. Hui Shin is trying to open her business while the ____ is open. a) safe harbor b) window of opportunity c) portal of entry d) doorway of opportunity e) safety zone 7. Which of the following is correct regarding opportunities and ideas? a) An opportunity and an idea are essentially the same thing. b) An idea almost always meets the criteria of an opportunity. c) An opportunity is a thought, an impression, or a notion. d) An idea is a favorable set of circumstances that creates a need for a new product, service, or business. e) It's important to discern whether a particular idea meets the tests of an opportunity. 8. The three ways to identify an opportunity include: a) observing trends, solving a problem, and finding gaps in the marketplace b) studying industry trade journals, talking to consumers, and solving a problem c) observing trends, conducting brainstorming sessions, and studying industry trade journals d) observing trends, talking to consumers, and finding gaps in the marketplace e) reading books, solving a problem, and findings gaps in the marketplace 9. Bright-Gum is an Asian company that produces chewing gum. The idea behind Bright-Gum is to produce a chewing gum that includes ingredients that improve concentration and memory. What was Bright-Gums initial target market? a) electronic game enthusiasts b) extreme sports enthusiasts c) college students d) athletics e) business professionals 10. According to entrepreneurship theory, which is the proper sequence of events in developing successful business ideas? a) opportunity recognition, feasibility analysis, development of a business plan b) feasibility analysis, opportunity recognition, development of a business plan c) development of a business plan, opportunity recognition, feasibility analysis d) feasibility analysis, development of a business plan, opportunity recognition e) development of a business plan, feasibility analysis, opportunity recognition

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11. Primary research is: a) original research and is collected by the entrepreneur b) research that is already collected and is available online c) research that is stored in an official government depository d) research that is collected by an impartial third party e) research that is collected by an industry trade association 12. Which of the Porter's five-forces is most closely associated with the concept "barrier to entry"? a) bargaining power of suppliers b) rivalry among existing firms c) threat of new entrants d) bargaining power of buyers e) threat of substitutes 13. The two primary issues to consider in organizational feasibility analysis are: a) target market attractiveness and financial rate of return b) management prowess and resource sufficiency c) capital requirements and industry attractiveness d) concept testing and financial rate of return e) industry attractiveness and overall attractiveness of the investment 14. The document that does the best job of introducing potential investors and other stakeholders with the business opportunity the firm is pursuing and how it plans to pursue it is the: a) business plan b) feasibility analysis c) opportunity analysis d) industry analysis e) marketing plan 15. There are three types of business plans: a) functional business plan, full business plan, feasibility plan b) summary business plan, contingency plan, full business plan c) functional business plan, contingency plan, full business plan d) opportunity plan, feasibility plan, full business plan e) summary business plan, full business plan, operational business plan 16. A ____, which is typically 25 to 35 pages long, works best for new ventures who are at the point where they need funding or financing. a) tactical business plan b) deliberate business plan c) summary business plan d) full business plan e) operational business plan

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17. Which of the Porter's five-forces is most closely associated with the concept "barrier to entry"? a) bargaining power of suppliers b) rivalry among existing firms c) threat of new entrants d) bargaining power of buyers e) threat of substitutes 18. The price of prescription medicine is high, partly because when someone is sick there is no real alternative to buying medicine if they want to get better. Which of Porter's five forces explains how this aspect of the prescription medicine industry helps keep profitability high? a) rivalry among existing firms b) threat of new entrants c) threat of substitutes d) bargaining power of buyers e) bargaining power of suppliers 19. Which of Porter's Five-Forces is most directly influenced by the following factors: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs? a) threat of new entrants b) rivalry among existing firms c) threat of substitutes d) bargaining power of buyers e) bargaining power of suppliers 20. Supplier concentration, switching costs, attractiveness of substitutes, and threat of forward integration are factors that have a direct impact on: a) threat of new entrants b) bargaining power of buyers c) rivalry among existing firms d) threat of substitutes e) bargaining power of suppliers (20 questions x 1 mark each = 20 marks) Section B: Answer (T) = True or (F) = False to the following statements:No. 1. 2. 3. Statement T or F A feasibility plan is a written narrative that describes what a new business plans to accomplish and how it plans to accomplish it. For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm. A business plan can usually be completed in one to three days.

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4. 5. There are two primary audiences for a firm's business plan: a firm's employees and investors and other external stakeholders. According to entrepreneurship theory, the marketing plan portion of a business plan is arguably the most important section of the plan. A competitor analysis is a detailed evaluation of a firm's competitors. The two trends that are most important to focus on in an industry analysis are business trends and environmental trends. The five competitive forces model is a framework for understanding the structure of an industry In most industries, the major determinant of industry profitability is the level of competition among the firms already competing in the industry. The three types of competitors a business will face are direct competitors, indirect competitors, and future competitors. (10 questions x 1 mark each = 10 marks) Section C (Essay questions) Choose two (2) out of 3 questions. All questions carry equal marks Question 1 What is industry analysis? Why is it important for a new venture to complete a thorough analysis of the industry it is entering? (5 marks) Question 2 What is competitive intelligence? What are some of the ways that a firm can ethically obtain information about its competitors? (5 marks) Question 3 What is a business plan? Experienced entrepreneurs often refer to business plans as "living, breathing documents." What is meant by this characterization of business plans? (5 marks)

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Summation of marks: Section A :20 Section B :10 Section C :10 Total : 40 marks Reduction Ratio: 20%

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