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FI}IAL E)(AIIINATION
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MARKING SCHEME

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CONFIDENTNL
 2

QUESTION 1

Discovery of opportunity at the right time and place is always the cornerstone
of any
entrepreneurial success and technopreneurs need to be creative in discovering
new
opportunities (in terms of products, services or processes) either through
invention
or innovation.

a. Explain in the terms .creativity' and ,innovation,

Creativity (any 1)

Cleativrty can be definedas fhe production of new and usefulideas as well as the
ability to discover new ways of toking at problems and opportunities

Creativity is th9 abi!! fo use the imagination to develop new ideas, new things or new
so/uffons (Dort and Byers, 2005)

CreatMty is the generation of ideas that resuft in the improved efficiency

- .-' or
--
effecfiyeness of a system (Matherly and Goldsmith, lgbq.
(3 ma*s)
Innovation (any 1)

lnnovation rs fhe to appty creative so/ufions to problems and opportunities to

"Pllitr
enhance or to enrich people's lives

lnnovatkn is process by which entrepreneur coiert opportunities into marketableideas

(Howell & Higgins, Igg0)

lnnovation rs ftre specific instrument of entrepreneurs, thgmeans by which

they exptoit
change as an opportunity for a differenf business or a different ti*i""
ioiix"r, Igss)
(3 marks x 2 terms = 6 marks)
.
b' Explain the link between creativity, innovation and entrepreneurship
with special
reference to the discovery of opportunity.

Hement in creativity is needed at every sfage of the technopreneurial process.

creative rueas are needed to discovei an entrepreneurial obportuiity.-pii
ilwentions
are ff ore often than not the product of creative thinking of the iiienton Creativity
9re is
a[so needed for innovation to take place. tnnovative proii"i"
iii;t';;i;;;rt
creative ideas- Bringing new and innovative producti to the rartcewii6
from
"d
arco neea
some elements of creativity.

Creativity lnvention Innovation Entrepreneurship

-+ -+,
(4 marks)
 Al(L h'l-,J

Briefly describe the two (2) important aspects of creativity.

The two important aspecfs of creativity are the creative pr-ocess and people. For
creativity to be of any essence fhe process of creatMty'shoutd Oe ennaniia anA
nurtured and people of
lhe organization should be taughl ta think and act creativety.
Creative people are not born or genius people.

The creative process includes several phases such as knowledge accumulation,

i ncubation, id e a experience, eval u ation antd impl e mentation.

Creativity can be learngd through creativity techniques. People can be creative by

applying creativity techniques to solve problems or to find new oppoiinities,
Organizations musf provide fhe necessary support and environment to encourage
creative behavior.

(4 ma*s)
List four (4) blocks to creativity.

Searching for the only'one'right answer

Focusing on'being logicat'
Blindly following the rules
Constantly be i ng practicat
Viewing play as frivolous
Becoming overly specialized *. +
Avoiding ambiguity
Fearing looking foolfsh
Fearing mlsfakes and failure
Believing that "l'm not creative,

Any 4 of the above (1% marks x 4 = 6 marks)

[Total:20 ma*s]
 -

QUESTIbN 2

(a) What is a feasibility study?

A.feasibitity study is a,pretiminary study undertaken before the real work

sfarfs to ascertain the likelihood otme froiects success
of a project
(2 marks)

(b) State four (4) reasons why a feasibility study is considered a good business
practice.

Reasons for oonducting feasibility study (any 4 reasons):

t. Assesses the probability of business success

ii. Gives focus fo the project artd ouflines alternatives
m. Narrorys business altem atives
iv" surfaces new opportunities through the investigatfve process
rf. ldentiftes reasons for not to proceed
vi. probahitity of success by addressing and mitigating factors
Lnh.ances the early on
that oould affect the praiect
vii. quality information for preparing business p/an
lr-o.vid9s
viii. Helps in securing funding

(1% marksx4=6marks)

(c) Describe four (4) key areas for assessing the feasibility of a new
venture. For
each area, give two key questions that must be addressed.

Four key areas:

Market feasihility: to determine market opportunity and nsks.

Key questions (any 2):
. Who are the target markets for this product/service?
. Who are your main competitors?
' What is the current or proiected demand for the proposed product/seruice?

Technical feasibitity: to analyse the technical feasibitity of the product/seruice

that willsafisfy the expectatioits of potenuat customeril
Key questions (any 2):
' /s the location of your proposed business orproje ct tikely
to affect itssuccess?
' Are enough raw materials available of the c6nic,t
round yoduction?
qiaii*n"n ii"iiiii,v""n
. whattechnolqy and equipmenf does the proposedbusiness need?
. what type of workers and'skiils that your.
irosiiseo ousiness nqiiiz
 Organisational feasibility: to analyse the organizational capability and personnel
requirements.
Key questions (any 2):
". what organizational structure is the right one for the venture?
Who will serue on the board of directdrs?

.' Are ampetent, professional

What campensation and ownership plan is offered to the management team?
counselrequired

Flnancial feasibility: to anaryse financial feasibility and resources,

Key questions (any 2):
" What is the total amount of costs incuned in order to start the basiness?
" Whatare fhesources of frnancing?
wlfhe busines s bring in enougi revenue to cover operating expenses?
"
(1 markx4key areas =4marks)
(1 markxSkey guesfibns =Smarks)

fTotal20 marks]

QUESTION 3

(a) ldentify four (4) sources of financing for a technology-pased venture

Sources of finaneino (anv4 sourcesl

I Government's ftnancialass.sfance.' governmenifundingscnemes ftiends.

2"
s^elf, Family and Friends: personal sawngg family members and
a iJ grants.
3. Busfness angels: informalsource of erternal equrty; pr6viaed airiciyii iign ner
worth individuals
4" venture capital: formalsource of external equ$; provided by private and
governmenf s venture capital companies.
5. Banking and Development Ffnancial lnstitutions

{4 x.1% marks = 6)

{b} ldentifywhich *ages of financing are most appropriate forthe six basic
development stages of a new vei-ture: pre-stirt-ui-,Jtart-up,
growth, mature growth and exit ""iry
fr"rrth, rapid

Sfages of Business Development Stages of Funding

Pre-start-up Seed FinancinglFirst-Round Financing
Sfart-up Seed FinancinglFirst-Round Financing
Early grovtth Second-Roun d Financi ng
Rapid growth Se cond -Round Fi n a nci ng
Mature growth Third-Round Financing
Exit or haruesting Bridge Finance

{6 x 1% marks = 9)
{e} Name five (5) funding schemes and grants provided by the government to
assist
technology-based venture.

fundilo sc,hemls a4! olants p=rovided bv the aovernment to assist technoloov-

based venture hnv 5 schemesl.

1) Seed Venture Fund (MAVCAp)

2) DirectVenture Fund (MAVCAp)
3) Creatting and Developing Leading Entrepreneurs (Cradle) lnvestment programme

[ctP] (MAVCAP)
4) IJniversity Cradle lnvestment programme (U-Clp) (MAVCAI4)
5) The MSC Malaysia R&D Grant Scheme (MGS) (MDeC)
6) Technopreneur Pre-Seed Fund programme (MDeC)
7) Venture capitaltund (MTDC)
8) Technology Acquisition Fund (TAF) MflDC)
9) commercialisafibn of Research & Development Fund (?RDF)
10) Technology Acquisition Fund for Women \AF-W
11) Enterprise lnnovation Fund (EtF)
12) Technofund

6 (1 markx5schemes=5marks e A
[Tobl20 marksl

SUESTION 4

ln our globally-linked economy, new product development capabilities are

for successful competition.
the basis

(a) Explain the terms "product design" and ..product devetopment,,

Product des/gn
\ tle conceptual translation of a new product idea or concept. tt
includes design of the product and its architecture (phyiicat d;si;;i
(aesfhefibs) as well as fhe required parameters to safisfi
irti"ti, desrgn
the market needs
Product developmelt is the process by which entrepreneurs create the product
seruice that willbe so/d to customers
or

(2 % marks x 2 explanations = S marks)

 7

(b) Draw a flowchart which illustrates the actMties carried out in the produc{
development process.

(1 ma* x 5 activities =5 ma*s)

(c) Briefly explain five (5) types/classifications of ,neu/ produc{s.

. New-to-the world prducts

- The frstoffis kind (new inventions)
- Create new mtket
. New product lines (new to the firm)
- New to the company but not new to the marketplace
. Addition to existing lines
Subsefs to the new product lines €
- Perhaps targeted to different markef segmenfs
. lmprovemenfs and revisions fo exisfing products
- New products to replace existing products with cosmetic and functional
enhancements
. Cosf reductions
- Offer no new benefrts to the consumer other than possibly reduced price
- Provides enorrnous added-value to the firm (financial rewards too)
. Repositioning
- New applications to existing products
- More to do with consumer perception rather than technical development

(2 marks x any 5 of the above= 10 marks)

[Total20 ma*s]
QUESTION 5

(a) The business analyst, lgor Ansoff (1965), outlined some important strategies for
business'growth. ldentified and explain four (4) key stiategies of business
growth.

i. Market penetration: Increasing market share for a firm's products in its existing
markets. Seueral approaches help to achieve this, inctuding product improvement;
updating and bu il ding/im provi ng existing products.
ii" New product development: developing new products for existing markets.
fii- Market development: tiping and developing new markets f6r cunent product
Iines. Ihis is mosf suitabte when existing prodias require only minor modifications
to be suitable for new, overseas markets. lt also heips if th6 product tife cycle 'ts
similar in the different markets that the busrness serves. This iu
not always-be the
case.
iv" Diversification: developing new product markets outside the existing business. A
firm will pursue this strategy where new markefs are highty attractivi. To do so, it
may switch resources from some of its existing markets that it believes to be in
permanent decline.

(2% marks x 4 strategies- i0 marks)

(b) Briefly explain four (4) implications of business growth to the entrepreneurial
firm"

I mplication s of grovvth :

1" Grov'rth will stretch the venfure's resource s therefore have ta

develop resource
slack to cushion future shortcomings
2" Gro.yvth yav createpressure on humanresources. Emptoyee morale
and
ytotivation may be affected due to over stetch in wori or under pay. This witt
have negative impact.on.the firm's image, culture and productivity.
Glgph may require fie business fo be resfructured to facilitate management
efftciency.
o may lead fo resisfance to change
o the technopreneur: must have appropriate management styte and skitfulto
handle such sifuaffons.
4" Growth demand rnore of
.the technopreneur,s time. Thus the technopreneurs
must have the arts of delegation.

(2% marks x 4 implicafibns

= i0 marks)
[Total20 marks)
QUESTION 6

(a) What is intellectual property right?

lntellectual property refers to the creation of the mind: innovation, commercial or
artistic, or any unique name, symbol, togo or design used commercialty.

(3 marks)

(bi Define a patent and a trademark,

Patent
A patent is an exclusive right granted for
an invention, which is a product or a
process that provides a new way of
doing something, or offers a new
technical solution to a problem.
Trademark
A trademark is a sign that distinguishes
the goods and services of one trader
from those of another. A sign includes
words, logos, pictures, names, letters,
numbers or a combination of these.

(2 ma*s x 2 definitions =4 ma*s)

(e) Describe how patent right protects the technopreneu/s invention.

A patent gives the owner the exctusive right to stop others from manufacturing, using
and/or seling the owne/s invention in nfifaysia*{n"rt nLn"r consent or permission.

(3 marks)

(d) what are the basic rules for obtaining a:'patent right for an invention?

Rule 1: Pursue patent that are broad, or commercially significant, and offer a strong
position.

Rule 2: Prepare patent plan in detail.

Rule 3: Have your actions relate to your original patent plan.

Rule 4: Establish #,nfring"ment budget.

Rule 5: Evaluate the patent strategicalty

(2 ma*s x 5 rules = 10 marks)

[fotal20 marks]
 10

QUESTION 7

(al what is commercialization of research and development (R & D)?

Cammercialization of Research and Development refers simply to the process of

gaining a commercial return ftom the outcome of a Research andbevetopment project.

(4 marks)

{b} En. Azmi has successfully developed a new product through his R & D prolect.
Discuss the alternative approach that he may take to monopolize the economic
benefit of his R&D product.

After En. Azmi has successfully_developed the product, he should first acquire
ownership right in the form of lP. Once the researcher owned the right in the form of
patent right the researcher may commercialize the output of the R&D:

The researcher may gain benefit of his inteltectual properties by licensing or by

assignation agreement with established private sector.

Alternatively, the researcher turns themsetves into technopreneurs in the spin-off

company.

(8 ma*s)
{c} Discuss why patenting a new R&D product is considered a temporary monopoly
of commercial value of the patented produc{.

In the case of Malaysia the Patent Act 1983 granted the innovator an exclusive right to
utilize or sell the patented innovation for a period of 20 years. During tnii peri]A tne
researcher may have.ownership rights of the new product and miint motivate the
researcher to involve in the process of bringing the research product-to the market.
In
ffiis process fhe researchers might be veniring into a technat'ogy$ased iinture.

However, the economic challenge and reward for a continuous improvement

product, process or technology efficiency will encourage other researchers
in a
fo improve
on the product and destroy the monopotl enjoyed by tie earlier innovator.

(8 marks)

fTotal20 marks]
QUESTION 8

ln-exiting or ending a business ownership, technopreneurs may choose to adopt one

of the following exit strategies: retrenchment, diveitment, or harvest.

(a) Discuss briefly each of the exit strategies.

Retrenchment strateov
R'etrenchmenf is the act of regrouping through cost and assef reduction
to reverse the
declining sa/es and prafits experience by the venture. ln'pursuing fhis sfrafegy
unproductive assefs or business units would be reduce for cash -or cosf saviig
exercise.

Divestment statesv
Divestment or sometimes a/so term as divestifure is a strategy to end a business
gautiously by selling part of the venture for cash and reinvesteci in a more promising
business or used to iniect new capital for a more promising business within'ihe sam6
holdings or corporation.

Haruest stateov
Flarvest stategy is a stategy pursued by the venture in an effort fo cash out and
hanresf the profit. The technopreneur may adopt this strategy due the tecinopreneur's
intention to discontinue his ownership in the venture., ey pursuing the harvesting
skafegy they could sell out the venfure for cash at ma*et value.

(4 marksx 3 sfrafegies = 12 marks)

(b) What factors would influence technopreneurs to pursue retrenchment and

harvest strategies?

Eetrenc h me nt strateqv :
* When an organization has a clearly distinctive competence, but has failed to meet
its objectives and goals consistenily over time.
* when organization rb one of the weaker competitors in the industry.
u lWten organization plag,ued by inefficiency, low profit, poor employee morale
and
pressure from stockholders to improve performance.
" When organization has grown so /arge so quickly that major internal reorganization
is needed.

{4 marks)

Haruest stratesy (anv 4):

. Boredom and burnout

."
Lack of operating and growth capitat
No heirs to leave fhe busrness fo,
. Desire for liquidity,
" Aging and health problems,
" Oeslre to pursue other interests,

{4 marks)

{fotal20 marksl