MID TERM ASSESSMENT SPRING 2021

Student’s Name: Noor Nabi Shaikh Registration Number 1711125

Program: BBA Class/Section: 8-A

Course Name: Entrepreneurship Course Code BA3502

Instructor’s Name: Faiza Ali Shahani Instructor’s email Faiza.shahani@hyd.szabist.edu.pk

Total Marks: 15 Marks Obtained:

Comment: (This Section is for Faculty Use)

Mention Date & 9-04-2010 Mention 09-04-2021

Time of Sharing: 2:30Pm Submission Date:

Mention 04:00PM
Submission Time:

File Type Allowed for submission: (MS Word, MS Excel, pdf, Images, Hand written)

IMPORTANT instructions:
 Read all the questions carefully and then solve in this file, if needed.
 Marks of each question are mentioned at the end of each question. Faculty Signature
 Solved Assignment must be emailed to the respective faculty by the due date and time, Late Receiving
will be marked Absent and Zero in Recap Sheet.
 The answer file must be attached in the email.
 Regardless of file type (image or document), email must include attachment for faculty to check.
 Non-submissions of the assignments will be considered as absent for the Final Term and will be marked “0”
on ZABDESK Recap Sheet.
 While checking of the Assignment, SZABIST Plagiarism policy is to be followed.
 Group assignments are not allowed.
_____________________________________________________________________________

Entrepreneurs never know when a business idea will come to them. Gerald Shvartsman came up
with the idea for his wicker and outdoor furniture business, Source Outdoor, in 2009 when he went
shopping at several Miami, Florida, stores for outdoor furniture for the balcony of his apartment.
Shocked by the high prices of couches, wicker chairs, and chaise lounges, Shvartsman decided to
open a business that imported low-cost, high-end outdoor furniture. He found a low-cost supplier
in China and placed an order. When the four containers arrived, Shvartsman unloaded them
himself and then switched roles, becoming his company’s oneman sales force and calling on every
furniture store within a 60-mile radius. Within a few months, every store that he had visited had
some of Source Outdoor’s furniture in their showrooms or were selling from his company’s
catalog. To expand his company’s reach, Shvartsman began selling through local interior designers
and decorators and to hotel and condominium owners at discounts of 50 percent of the normal
retail price. After working with one online furniture retailer, he began filling orders (by drop
shipping) for other online retailers. Like the brick-and-mortar retail stores he supplied, Shvartsman
offered online furniture retailers discounts of 60 percent off retail prices. In addition, six or seven
times each year, Shvartsman would haul a truckload of his overstocked merchandise and sell it
directly to the public at a large Florida home show. Most of the sales to the public were at full
retail price, generating impressive profit margins of more than 300 percent. By 2011, Source
Outdoor’s sales had reached $4.4 million; in 2013, they doubled to $9 million. As Source
Outdoor’s sales volume increased, Shvartsman began to notice that his manufacturer in China was
shipping aluminum chairs and tables that had flaws, such as discolored metal coatings,
mismatched fabrics on cushions, and weak metal supports. Because he had built his company on
the premise of selling high-end, quality furniture at moderate prices, he knew that the quality
problems could threaten Source Outdoor’s reputation and success. Shvartsman decided that the
best way to address the quality problems with his supplier was to manufacture those items himself.
He cleared out a section of the company’s warehouse, purchased $60,000 worth of equipment,
including metal lathes for forming curved table legs and other parts, welding torches, grinders, and
an oven for warming vinyl. Soon Source Outdoor was making much of the same furniture in his
converted Miami warehouse that he had been importing from China but the quality of the products
was much higher. In addition, Shvartsman could now fill orders much faster (shipments from
China took months to arrive) and could offer custom designed finishes and cushions, a feature that
was appealing to many of his interior designers, decorators, and retail furniture store customers.
Although Shvartsman wants to expand the percentage of his company’s products made in-house,
he realizes that he will have to continue to import items that are labor-intensive, such as
handcrafted woven wicker furniture, from China and other countries with low labor costs. One
day, Shvartsman received a call from one of his best retail customers who complained about
Source Outdoor selling directly to customers at the Florida home show. The store owner said
Source Outdoor was taking potential sales from his store and all of the other nearby stores to
which Shvartsman sold. He realized that similar calls from other retail customers were likely to
come and began weighing his options. The home show sales were important to his company and
generated impressive profit margins. So far, he had encountered none of the retail stores he
supplied at the home show. Shvartsman was able to move slow-selling merchandise at attractive
margins, but was doing so worth alienating his primary customer base, the retail furniture stores
that carried his company’s products?
Question no1: Use the business model canvas to illustrate Shvartsman’s business model. Do you
notice any areas that require strengthening?

Question no.2: One franchisee says franchising works because the franchisor gets its franchisees
going, nurtures them, and, at times, shoves them. However, the franchisor cannot make its
franchisees successful. Success depends on how committed one is to finding the right franchise for
himself or herself, on what each franchisee brings to the business, and on how hard he or she is
prepared to work. Do you agree? Explain. [4marks]

Question no.3: You have planned to organize a big event in your city at the lowest cost
possible. Use any three creativity-enhancing techniques described in the chapter to develop
potential solutions that would allow you to organize a successful event. [6marks]

Designed for: Designed by: Date: :

 09/04
Business Model Canvas Source Outdoor Noor Nabi
/2021

Key Partners Key Activities Value Propositions Customer Customer

Relationships Segments

 Importer  Selling  Lower cost  Florida  Heavily

from Outdoor than home B2C
china. furniture. competitors. show.
 Local
 Marketing  Customized  Online
interior
 Manufacturi designs. advertisi
 Better ng designer
ng (later)
 Accounting designs s,
 logistics than decorat
 Drop- competitors. ors and
shipping  Maintaining hotel
high quality owners.
Key Resources Channels
 Provided
 Gerald online  Direct
shvatsman sellers selling
 Equipment discounts.. (calling
like: every
 Welding furniture
torch, store in
grinders, 60-mile
oven for radius)
warming
vinyl, etc.
 Online
 Hotel
selling.
owner’s
associations
.
 Drop
shipping.

Cost Structure Revenue Streams

 Manufacturing costs/production  Online sales.

costs.  Trade-show sales
 Taxes  Drop-shipping
 Importing costs.  Catalog sales.

Q2:
Answer:
Franchising is like a purchasing a success package from the world-class leading brands. But that
does not give certificate to rest easy and not work hard. As in order to make even a franchise
successful a franchisee must work hard with dedication and devotion. A franchisee must
understand the structure of the existing business model of the organization and learn the art of
cooperation. The franchisee will only work hard, if he/she has the franchise of the brand that they
are passionate about. A franchisee must be fast learner and have good interpersonal skills because
he/she will have to lead a group of un-trained/ new people. Good communication skills will help
the franchisee to communicate effectively with his/her employees and help them grow. And not all
franchisors are the same, franchisee must investigate how long the franchisor has been in business
and what is the average success rate of the franchises they have established. And whether working
with this franchisor will be a pleasant experience or not. A franchisee must figure out all these
things before stepping the world of franchising. After all this planning, a franchisee must also have
an exit strategy, because “start with the end in mind” (Stephen covey). Finally, it is seen a
franchisee must work hard in order to be successful.

Q3:
Answer
Force-field analysis:
Driving Forces Score Proposal Score Restraining Forces

Lack of musical 4 5 Law n order situation

shows in the city

Exposure of local and 5 2 Lack of appropriate

national talent Marketing

Revenue Earning 4 3 Cheerful crowd

potential

Socializing 4 4 Appropriate venue

Excitement for 4 A Big event with 4 Neighborhood complain

Entertainment lowest possible
cost.
Low ticket price 5 (A musical 5 Potential high cost
concert).

Decision:
Organize a
TOTAL 26 Musical concert. -23 TOTAL