Bahir Dar University

Bahir Dar Institute of Technology

Faculty of Computing
Department of Software Engineering
Entrepreneurship Assignment

Abreham Ashebir

ID: 0801532

Submitted to: Mr. Wogiye

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1. What is franchise?
 A franchise is the license to make or sell a product under certain conditions granted by the
owner of these rights. In other words, a franchise is the right to produce a licensed product by
the owner of the license. In this contact, the franchisee pays the franchiser for the right to use
the licensed material.
 An authorization granted by a government or company to an individual or group enabling them
to carry out specified commercial activities, for example acting as an agent for a company's
products.
 A continuing relationship in which a franchisor provides a licensed privilege to the franchisee
to do business and offers assistance in organizing, training, merchandising, marketing and
managing in return for a monetary consideration. Franchising is a form of business by which
the owner (franchisor) of a product, service or method obtains distribution through affiliated
dealers (franchisees).

It is used to get well-known brand name for our small business. In addition to a well-known brand
name, buying a franchise offers many other advantages that aren't available to the entrepreneur
starting a business from scratch. Perhaps the most significant is that you get a proven system of
operation and training in how to use it. New franchisees can avoid a lot of the mistakes startup
entrepreneurs typically make because the franchisor has already perfected daily operations through
trial and error.

Pros and Cons of Franchises

There are many advantages to investing in a franchise, and there are also drawbacks. Widely
recognized benefits to buying a franchise include a ready-made business operation. A franchise
comes with a built-in business formula including products, services, even employee uniforms and
well-established brand recognition such as that of McDonald’s. Depending on the franchise, the
franchisor company may offer support in training and financial planning, or even with approved
suppliers. Whether this is a formula for success is no guarantee.

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Disadvantages include heavy start-up costs as well as ongoing royalty costs. To take the
McDonald’s example further, the estimated total amount of money it costs to start a McDonald’s
franchise ranges from $1 million to $2.2 million.

2. What is franchisee?
 A franchisee is a small business owner who operates a franchise. The franchisee has
purchased the right to use an existing business's trademarks, associated brands, and other
proprietary knowledge to market and sell the same brand, and uphold the same standards
as the first business. Franchisees become owners and independent operators of third-party
retail outlets called franchises.
 A franchisee is a person or company that is granted a license to do business under the
franchisor's trademark, trade name, and business model, by the franchisor.
The franchisee purchases a franchise from the franchisor. The franchisee must follow
certain rules and guidelines already established by the franchisor, and in most cases, the
franchisee must pay an ongoing franchise royalty fee to the franchisor.

A franchisee has four major responsibilities for the success of the system in which they are granted
a franchise:

1. To protect the franchised brand by operating the franchise in strict compliance with
system operating standards.
2. To build a strong and loyal customer base by offering only approved products and
services and by providing superior customer service.
3. To ensure that all employees are properly trained and the franchise is properly staffed
at all times.
4. To advertise and promote the franchise and its approved products and services
according to the guidelines provided by the franchisor.

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3. What is the role of entrepreneurship for one country?

Entrepreneurs occupy a central position in a market economy. For it's the entrepreneurs who serve
as the spark plug in the economy's engine, activating and stimulating all economic activity. The
economic success of nations worldwide is the result of encouraging and rewarding the
entrepreneurial instinct.
A society is prosperous only to the degree to which it rewards and encourages entrepreneurial
activity because it is the entrepreneurs and their activities that are the critical determinant of the
level of success, prosperity, growth and opportunity in any economy. The most dynamic societies
in the world are the ones that have the most entrepreneurs, plus the economic and legal structure
to encourage and motivate entrepreneurs to greater activities.
Entrepreneurship plays an influential role in the economic growth and standard of living of the
country. As a startup founder or small business owner, you may think that you are simply working
hard to build your own business and provide for yourself and your family. But you are actually
doing a whole lot more for your local community, state, region, and the country as a whole. Here
are the top 7 important roles an entrepreneur plays in the economic development of a country.

1. Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest their
own resources and attract capital (in the form of debt, equity, etc.) from investors, lenders and the
public. This mobilizes public wealth and allows people to benefit from the success of entrepreneurs
and growing businesses. This kind of pooled capital that results in wealth creation and distribution
is one of the basic imperatives and goals of economic development.

2. Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to job seekers.
The simple translation is that when you become an entrepreneur, there is one less job seeker in the
economy, and then you provide employment for multiple other job seekers. This kind of job
creation by new and existing businesses is again is one of the basic goals of economic
development. This is why the Govt. of India has launched initiatives such as StartupIndia to
promote and support new startups, and also others like the Make in India initiative to attract foreign

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companies and their FDI into the Indian economy. All this in turn creates a lot of job opportunities,
and is helping in augmenting our standards to a global level.

3. Balanced Regional Development: Entrepreneurs setting up new businesses and industrial units
help with regional development by locating in less developed and backward areas. The growth of
industries and business in these areas leads to infrastructure improvements like better roads and
rail links, airports, stable electricity and water supply, schools, hospitals, shopping malls and other
public and private services that would not otherwise be available.

Every new business that locates in a less developed area will create both direct and indirect jobs,
helping lift regional economies in many different ways. The combined spending by all the new
employees of the new businesses and the supporting jobs in other businesses adds to the local and
regional economic output. Both central and state governments promote this kind of regional
development by providing registered MSME businesses various benefits and concessions.

4. GDP and Per Capita Income: India’s MSME sector, comprised of 36 million units that provide
employment for more than 80 million people, now accounts for over 37% of the country’s GDP.
Each new addition to these 36 million units makes use of even more resources like land, labor and
capital to develop products and services that add to the national income, national product and per
capita income of the country. This growth in GDP and per capita income is again one of the
essential goals of economic development.

5. Standard of Living: Increase in the standard of living of people in a community is yet another
key goal of economic development. Entrepreneurs again play a key role in increasing the standard
of living in a community. They do this not just by creating jobs, but also by developing and
adopting innovations that lead to improvements in the quality of life of their employees, customers,
and other stakeholders in the community. For example, automation that reduces production costs
and enables faster production will make a business unit more productive, while also providing its
customers with the same goods at lower prices.

6. Exports: Any growing business will eventually want to get started with exports to expand their
business to foreign markets. This is an important ingredient of economic development since it

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provides access to bigger markets, and leads to currency inflows and access to the latest cutting-
edge technologies and processes being used in more developed foreign markets. Another key
benefit is that this expansion that leads to more stable business revenue during economic
downturns in the local economy.

7. Community Development: Economic development doesn’t always translate into community

development. Community development requires infrastructure for education and training,
healthcare, and other public services. For example, you need highly educated and skilled workers
in a community to attract new businesses. If there are educational institutions, technical training
schools and internship opportunities, that will help build the pool of educated and skilled workers.

A good example of how this kind of community development can be promoted is Azim Hashim
Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores for promoting education
through the Azim Premji Foundation. This foundation works with more than 350,000 schools in
eight states across India.

So, there is a very important role for entrepreneurs to spark economic development by starting new
businesses, creating jobs, and contributing to improvement in various key goals such as GDP,
exports, standard of living, skills development and community development.

4. Discus briefly how owner of sunshine construction (Ethiopia), Cement factory

(Dangote) and Microsoft (Bill Gates) become in the market.

Microsoft is an American multinational computer technology corporation whose history started

in the middle of 1975. Formed by Harvard College dropout, Bill Gates and his childhood friend
Paul Allen, Microsoft has now become the biggest software company. It is also one of the most
valuable companies in the world.

How did Microsoft become successful?

Microsoft is engaged in developing, licensing and supporting a range of software products and
services catering to different requirements. In 2000 Steve Ballmer was appointed the new CEO of
Microsoft. Bill Gates had met Steve Ballmer at Harvard University before he left. Although there
was some concern over Ballmer’s ability, Microsoft retained its top spot in both business and
personal computer markets. Microsoft’s primary strengths and most of its profits were obtained

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from the business side. Although the company recognized that they had a major presence in
consumer markets as technology advances.

The successful Altair deal back in January 1975 inspired Bill Gates and Paul Allen to form
Microsoft. Their revenues for 1975 total of $16,000. Microsoft's big break was in 1980, when a
partnership was formed with IBM which resulted in Microsoft providing a crucial operating
system, DOS, for IBM PCs. This meant that for every IBM Computer sold a royalty was paid to
Microsoft. In 1990, Gates showed the future plan for Microsoft with the introduction of Windows
3.0. 60 million copies of Windows had been sold now which effectively made Microsoft the sole
keeper of the PC software standard.
Microsoft before 1990 was predominantly a supplier to the hardware manufacturers. That was their
target market. As technology advanced and personal computers become so popular, the bulk of
Microsoft’s revenue was generated from sales to consumers. It was the first software company to
reach $1 Billion in revenues. As more and more versions of Microsoft Windows were launched,
Microsoft captured a higher market share the world’s PC (around 90%).
Microsoft also entered the gaming and mobile phone market and was successful in capturing a
large market share. The Windows Mobile OS is used by numerous sellers including HTC, LG,
Samsung and LG. In 2001 Microsoft released the Xbox followed by Xbox Live in 2002. Both
releases were very successful which placed Microsoft second in the video gaming market. The
Xbox 360, released in 2005 was a very powerful gaming console while facing strong competition.
Microsoft had to cut the prices of their gaming consoles to gain a higher market share due to
competition. This was a successful move; the Xbox 360 was the most used game console in
American homes.
Microsoft acquired Skype in 2011 for $8.5 Billion; this was the largest acquisition in Microsoft’s
history. Microsoft acquired Skype to compete with Apple’s Facetime and Google’s Voice.
Microsoft planned to add Skype to its products such as Outlook, Xbox and Windows smartphones.

Microsoft has also recently moved into cloud computing with Windows Azure platform which was
announced in 2008. The Windows Azure platform lets consumers build computing infrastructure

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in the “cloud” and offer it to its users. In 2011, Office 365, a cloud version of Office business
software suite was released which included applications such as Word and Excel.

Another popular product, Microsoft's SQL Server 2012, featured many enhancements to previous
versions. This included Always On which provided options to improve the database availability
and easy cloud set up and compatibility. Features also included performance and programmability
enhancements. DSP provide support for all versions and features of Microsoft SQL Servers, across
a wide variety of windows platforms.
The Dangote Cement plant in Obajana, Kogi, is the largest in Sub-Saharan Africa with
10.25mmtpa capacity across three lines and a further 3mmtpa capacity currently being built. In
2012, the firm opened a $1 billion cement plant in Ibese, Ogun. The facility is capable of producing
6 million metric tonnes of cement per year, raising the company's total production by 40 percent
at the time.[6] The plant was installed by the Chinese construction and engineering firm Sinoma,
and represents one of the largest non-oil investments in Nigeria. The company's plant
in Gboko, Benue has 3mmtpa capacity with an upgrade to 4mmtpa planned in 2013.
Globally, market and non-market forces influence business decisions. In economies with weak
institutions, however, the importance of non-market factors are usually elevated. This discourages
long-term planning and investments by many businesses. It shows how the above dynamics
created opportunity for an indigenous cement company, Dangote Cement Plc, to displace long-
established cement multinationals and become the dominant player in the Nigerian cement
industry.
The company achieved this by exploiting its close relationship with the government to champion
a ‘backward integration policy’ for the industry. The result was that in less than 12 years Nigeria
moved from being heavily dependent on imported cement to become the leader in cement
production in Africa. Although it is often cheaper to manufacture than import cement in the
country, cement multinationals have been unwilling to undertake the capital investment necessary
to exploit this opportunity.
Sunshine Construction PLC is a company that was established in 1984, as a sole proprietorship
and later in 1993 transformed into a private limited Company. For the last 33 years,

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the company had a successful engagement mainly in the building construction, road construction,
and real estate development sectors.
Sunshine has a solid reputation for completing projects on time, within budget and with a standard
quality. It has attracted the attention of so many governmental and non-governmental institutions
for its high quality construction work and performance both in road and building construction line.
It is currently executing both in building construction and road construction infrastructure projects
at various levels of the country. Some of the major road construction sites of Sunshine construction
PLC are:
 Yabelo-teltele
 Aluha-diko
 Fincha-lemlem-berha
 Zeway butajra road construction
 Mukaturi alem ketema
Some of the major building constraction sites of Sunshine Construction Company PLC are:
 Sunshine complex
 Ethiopian leather and leather products
 Civil service dormitory
 Kiros market center
 Sululta deport

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