Midterm Paper Fall 2020 (5th)

MGT303 - Entrepreneurship

Attempted By
Sarab Ali (18321519-029)
BSCS (Section A)

Teacher/Examiner
Mam Asba Arshad

Date & Time

Wednesday, November 19, 2020 (12:00 PM to 2:30)

Department of Computer Science Facility of C&IT

University of Gujrat (Hafiz Hayat Campus)
Q1 Answer
Ans: I will tell him to follow following characteristics:
1. Disciplined
These individuals are focused on making their businesses work, and eliminate any hindrances or
distractions to their goals. They have overarching strategies and outline the tactics to
accomplish them. Successful entrepreneurs are disciplined enough to take steps every day
toward the achievement of their objectives.

2. Confidence
The entrepreneur does not ask questions about whether they can succeed or whether they are
worthy of success. They are confident with the knowledge that they will make their businesses
succeed. They exude that confidence in everything they do.

3. Open Minded
Entrepreneurs realize that every event and situation is a business opportunity. Ideas are
constantly being generated about workflows and efficiency, people skills and potential new
businesses. They have the ability to look at everything around them and focus it toward their
goals.

4. Self-starter
Entrepreneurs know that if something needs to be done, they should start it themselves. They
set the parameters and make sure that projects follow that path. They are proactive, not
waiting for someone to give them permission.

5. Competitive
Many companies are formed because an entrepreneur knows that they can do a job better than
another. They need to win at the sports they play and need to win at the businesses that they
create. An entrepreneur will highlight their own company’s track record of success.

6. Creativity
One facet of creativity is being able to make connections between seemingly unrelated events
or situations. Entrepreneurs often come up with solutions which are the synthesis of other
items. They will repurpose products to market them to new industries.

7. Determination
Entrepreneurs are not thwarted by their defeats. They look at defeat as an opportunity for
success. They are determined to make all of their endeavors succeed, so will try and try again
until it does. Successful entrepreneurs do not believe that something cannot be done.

8. Strong people skills

The entrepreneur has strong communication skills to sell the product and motivate employees.
Most successful entrepreneurs know how to motivate their employees so the business grows
overall. They are very good at highlighting the benefits of any situation and coaching others to
their success.

9. Strong work ethic

The successful entrepreneur will often be the first person to arrive at the office and the last one
to leave. They will come in on their days off to make sure that an outcome meets their
expectations. Their mind is constantly on their work, whether they are in or out of the
workplace.

10. Passion
Passion is the most important trait of the successful entrepreneur. They genuinely love their
work. They are willing to put in those extra hours to make the business succeed because there
is a joy their business gives which goes beyond the money. The successful entrepreneur will
always be reading and researching ways to make the business better.

Q2 Answer
Haji Muhammad Ali
A small shop owner named his small business venture, cafe student from where he would sell
students of nearby schools biryani from home made recipes. Today, the same venture is one of
largest local food chains in Pakistan and is a household name, Student Biryani. Founded by Haji
Muhammad Ali in 1969, Student Biryani was prepared only in one tumbler (Deig) catering to
around 40 servings. Today, the company has hundreds of employees in scores of branches in
Pakistan as well as abroad. Sheer hard work, dedication to his business has made Student
Biryani a local as well as an international success today and it continues to grow even further
with more branches being established even outside Pakistan.
Characteristics:
 Taking Risks:

He started from a small shop and he take risk. He was not bothered from the result he takes
risks and finally after a long struggle he succeeded in mission and establish a large network.

 Passion:

He has found his passion. successful entrepreneurs are passionate. They feel deeply about their
product or service or mission. Passion is what will help you find motivation when you are
discouraged and it will drive your forward. Passion is fuel for successful entrepreneurship.

 Basic Money Management Skills and Knowledge:

We often think of successful entrepreneurs as “big picture” people who don’t worry so much
about managing the day to day. And it’s true that you might have an accountant or other team
members to help you manage the business. And he knows how to manage money.

Q3 Answer:
Expanding Mr. Ali’s Banquet hall business to Gujranwala:
ANALYZE CURRENT FINANCES:
Mr. Ali cannot successfully expand his business if his finances are not in order. Before taking the
plunge, he need to go over the financial health of your business with a fine tooth comb.
MARKET RESEARCH:
Of course, when trying to infiltrate a new area, Mr. Ali have to do some research. He have
assessed the financial health of his business, and it seems like he might be ready to go. Now he
need to consider where he’s expanding to.
SWOT:
A classic SWOT analysis can always come in handy. This is one of the cornerstones of any
market research for a new or an expanding business.
S => Strengths: Strengths of his business. What can he bring to the market and what advantages
he have over your competitors?
W => Weaknesses: What can he improve within his business/operations? What would his
competitors see as weakness? What should he avoid?
O => Opportunities: Are there any opportunities he can take advantage of? Any trends he can
jump on? Positive changes in government regulation that may be beneficial?
T =>Threats: Obstacles that he’ll need to overcome. What are your competitors doing better?
Small market segment? Cash flow problems?
Create a solid business plan:
Ali need to create a solid business plan to provide direction to your business in a foreign
country. Embarking on your business journey in a foreign country without a business plan will
be like driving with your eyes closed and expecting to reach your destination.
A perfectly written business plan includes a snapshot of your business, business overview,
operation plan, market analysis , competitive analysis, financial plan and business projections.
Q4 Answer
Identifying business ideas:
It’s one thing to be able to identify industries and businesses that are poised for major market
success. But entrepreneurship requires more than just finding an idea that can make a lot of
money.
For entrepreneurs to tap into the motivating power that drives lasting success, the ideas they
conceive must be powerful enough to change the world through major economic, social or
environmental impact.
One of the toughest parts of being an entrepreneur is finding the next opportunity to make it
big in business.
Invest in Multiple Businesses:
Most self-made billionaires are people who invested in many different business opportunities
at once instead of focusing on just one idea. While there are also plenty of business owners
who have focused on one idea and succeeded, it is harder to do this and if you fail, many more
of your resources are lost. For the first-time entrepreneur, instead of taking an idea from the
ground up, it may be more appealing to run other businesses and be a part of their inception,
limiting your risk without limiting your opportunity for profit.
Example: “Warren Buffett” is perhaps the smartest, most diversified entrepreneur of our time
and holds ownership in over 40 companies. This doesn't account for his personal stock picks,
investments, and other money-making endeavors. With a net worth of over $67 billion, it's a
safe bet to look at what Warren Buffett is doing to help shape some of your own business
practices.

Q5 Answer
Opportunities:
Successful entrepreneurs exploit entrepreneurial opportunities to establish their enterprises.
The food industry is a setting in which many such opportunities exist. To shed light on those
specific entrepreneurial opportunities, we combine a five-step model of the food value chain
ranging from agriculture to consumption with classic economic sources of entrepreneurial
opportunities, that is, changes in supply, changes in demand, exogenous shocks,or
informational asymmetries prevalent in the market. We proxy for entrepreneurial opportunities
by shedding light on where start-up investors assign their capital in the food value chain.
Effects of risk:
Risk attitudes have an impact on not only the decision to become an entrepreneur but also the
survival and failure rates of entrepreneurs. Whereas recent research underpins the theoretical
proposition of a positive correlation between risk attitudes and the decision to become an
entrepreneur, the effects on survival are not as straightforward. Psychological research posits
an inverse U-shaped relationship between risk attitudes and entrepreneurial survival. On the
basis of recent waves of the German Socio-Economic Panel (SOEP), we examine the extent to
which risk attitudes influence survival rates of entrepreneurs. The empirical results confirm that
persons whose risk attitudes are in the medium range survive significantly longer as
entrepreneurs than do persons with particularly low or high risks.

Q6 Answer:
Here’s how to practice entrepreneurial’s spirit :

Hire Carefully
When it comes to growing your company, you’re looking for entrepreneurial spirit—not
entrepreneurs. Hire the latter and, before you know it, you’ll be back to reviewing resumes. But
if you choose your questions carefully, you can discern whether a potential employee’s passion
can be harnessed for your company’s benefit, or if it will forever be directed towards his own
projects. Consider asking what concerns a candidate has regarding your company. The answer
will reveal how committed he is to making your business better, as well as how willing he might
be to offer feedback that challenges the status quo—a sure sign of an entrepreneurial spirit.
Empower Employees To Take Risks
That means creating an environment where it’s safe to fail. Simon Sinek, author of Start With
Why, offers the example of an aerial trapeze artist: provide a net and your performer will
attempt new, ever more challenging feats. To foster an entrepreneurial spirit in the workplace,
you need to ensure a similar net is in place. Never reject an idea out of the gate—instead,
thoughtfully discuss it. Even if the suggestion is eventually turned down, your employee will
understand why and be more likely to provide additional feedback in the future.
Trust Employees To Rise To The Challenge

When a suggestion makes sense, ensure the initiating employee is involved in the follow-
through. People feel a natural sense of ownership over their ideas and co-opting them will only
result in a future reluctance to share. Connect your employee with the necessary resources to
realize her suggestion and watch her entrepreneurial spirit take root.

Publicly Recognize Employees – Sometimes

Not everyone craves credit. It’s important to offer quieter employees a more suitable platform
to share their ideas—maybe even anonymously. Consider leaving a suggestion box in a quiet
corner of the office. While you’ll still want to acknowledge these contributions regularly, an
anxious employee can take heart knowing his name will not be attached to any idea he offers.
In time (and if you follow step two on this list!) quieter employees may become more
comfortable letting their entrepreneurial spirit show.
 Practice Transparency
Michael Kerr, president of Humour at Work, says it best: “If employees are being asked to think
like owners, then they need the same level of information that owners receive.” An open and
honest dialogue is key to letting an entrepreneurial spirit shine through. Hold nothing back, and
your employees won’t either.

In Conclusion

For employees with an entrepreneurial spirit, work is more than just their nine-to-five. It’s
something that provides real purpose, provided their contributions are supported and
appreciated. By encouraging innovation in your own organization, you’ll keep these employees
where you want them—on your team, and not the competition’s. In return, you’ll see higher
productivity and profits—and more importantly, you’ll get to come to work every day with
people as inspired, passionate, and creative as you are.

Difference Between Entrepreneurial Decision Making and Managerial Decision making:

Entrepreneurial decision making

 Definition: An entrepreneur is a person who creates something new and assumes the risks
and rewards associated with that innovation.
 Strategic Orientation: The entrepreneur’s strategic orientation depends on his or her
perception of the opportunity.
 Motive: The main motive of an entrepreneur is to start a venture by setting up an enterprise
 Status: An entrepreneur is the owner of the enterprise.
 Risk-bearing: An entrepreneur assumes all risks and uncertainty involved in running the
enterprise.
 Rewards: An entrepreneur gets profit as his reward for bearing risks.
 Innovation: An entrepreneur is an innovator.
 Qualifications needed: High achievement motive, creativity, foresight, risk-bearing ability and
so on.

Managerial decision making

 Definition: A manager is an employee of the entrepreneur who performs all managerial

functions for the entrepreneur’s enterprise.
 Strategic Orientation: When the use of planning systems is the strategic orientation, the
administrative domain is operant.
 Motive: The main motive of an entrepreneur is to render his service in an enterprise already
set up by someone else.
 Status: A manager is a servant in the enterprise owned by the entrepreneur.
 Risk-bearing: A manager does not bear any risk involved in the enterprise.
 Rewards: A manager gets a salary as his reward for rendering his service.
 Innovation: A manager converts the entrepreneur’s ideas into practice.
 Qualifications needed: Sound knowledge in management theory and practice.

Q7 Answer:
Yes I am agree with this statement.
Following factors describe why entrepreneur should take risks:

1. Risks can be calculated

When taking a major risk, it is important to calculate the potential results and have contingency
plans in place. While there are success stories of entrepreneurs taking the ‘ultimate’ risk, no risk
which could see your business go completely under is advised. General George Patton put this
perfectly when he said, “Take calculated risks. That is quite different from being rash”.

2. You’ll never know until you try

For the majority of entrepreneurs, a risk is a case of ‘what if’ and is seen as a means of
advancing their business in some way. No matter how calculated it is, you can never be sure
that a risk will pay off, however, there is only one way to find out. As Frederick Wilcox said,
“Progress always involves risks. You can’t steal second base and keep your foot on first”.

3. Risk helps to distinguish between leaders and followers

Generally speaking, entrepreneurs take risks as it allows them to distinguish themselves from
their competitors. In the competitive business environment that exists today, those who are
willing to risk position themselves as leaders, while others get left behind. If you take a minute
to think of a leader who you consider successful, chances are that they changed the way things
were done for the better, and put themselves on the line during the process. This does not
mean that all leaders take major risks on a regular basis, but it is safe to say that all leaders
have taken at least one risk in their career which has helped them achieve their current
position.

4. Without risk there is no innovation

Innovation cannot occur unless there is an element of risk to begin with. Whether it’s a new
product or a change to existing practices – these will both be considered a risk. T.S. Eliot said,
“Only those who will risk going too far can possibly find out how far it is possible to go”. When
innovating, the level of risk can be mitigated by ensuring that all possible calculations have
been made to evaluate whether it is the best option moving forward.

5. It is a chance to learn
Without risk, entrepreneurs will not experience failure and therefore will not learn from their
mistakes. Of course it is possible to learn from positive experiences too, however, failure
teaches us a very powerful lesson that tends to stay with us for life. In addition, taking risks
teaches us important skills such as how to calculate contingencies as well as strategic thinking
and planning.

Q8 Answer
Following are the categories of newness products as per manufacturer’s point:

1. New-to-the-world Products (really new Products)

The alternative expression for new-to-the-world products (really new products) already
indicates that this is what most people would define as a new product. These products are
inventions that create a whole new market. Examples: Polaroid camera, the iPod and iPad, the
laser printer and so on.

2. New-to-the-firm Products (new Product Lines)

Products that take a firm into a category new to it. The products are not new to the world, but
are new to the firm. The new product line raises the issue of the imitation product: a “me-too”.
Examples: P&G’s first shampoo or coffee, Hallmark gift items, AT&T’s Universal credit card and
so on.

3. Additions to existing Product Lines

These are simple line extensions, designed to flesh out the product line as offered to the firm’s
current markets. Examples: P&G’s Tide Liquid detergent, Bud Light, Special K line extensions
(drinks, snack bars, and cereals).

4. Improvements and Revisions to existing Products

Current products made better. Examples: P&G’s Ivory Soap and Tide power laundry detergent
have been revised numerous times throughout their history, and there are countless other
examples.

5. Repositionings

As we already discussed before, you may have an argument about whether repositions are
actually new products. Yet, they can be considered as new products, as the firm undertakes a
new products process. Repositionings are products that are retargeted for a new use or
application. Examples: Arm & Hammer baking soda repositioned as a drain or refrigerator
deodorant; aspirin repositioned as a safeguard against heart attacks. Also includes products
retargeted to new users or new target markets. Marlboro cigarettes were repositioned from a
woman’s cigarette to a man’s cigarette years ago.

6. Cost Reductions

Finally, cost reductions complete the six categories of new products. Cost reductions refer to
new products that simply replace existing products in the line, providing the customer similar
performance but at a lower cost. May be more of a “new product” in terms of design or
production than marketing.