B205B Focus Topic – Final Exam – 1st semester 2019-2020 Prepared By AFA Version 2

B205B Final Exam Focus Topics

The final exam of B205B Consists of four questions, no case study will be involved in the exam
Final exam will cover the material of block 03 week 4, block 4 weeks 1 to 4, and block 5 week 1. Please
inform your students that they are required to study and are responsible of the whole material. In addition,
to the slides we provide for them (which are just aiding tools). The following topics are just of a major
concern in the exam
Block 4 week 1
Meaning and definition of entrepreneurial marketing (EM) and administrative marketing (AM)
EM main characteristics
Explain 4P’s of AM AND 4P’s OF EM
Block 4 weeks 2.3.4
-Explain the financial statements and their components, why they are produced, their relation to each other
- make calculations on the balance sheet
Block 5 week 1
The nature of values
The ten motivational types of values
Block 3 week 4
Family vs. Stock market businesses, best way to run a business, reviewing the evidence

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 B205B Focus Topic – Final Exam – 1st semester 2019-2020 Prepared By AFA Version 2

Block 4 week 1
PART1: Meaning and definition of entrepreneurial marketing (EM) and administrative marketing (AM) or
CTM.
PART2: EM main characteristics
PART3: Explain 4P’s of AM AND 4P’s OF EM
PART 1

Entrepreneurial marketing (EM) is used to describe the marketing used by small ventures, often at early
growth phase. It should be noted that this approaches to marketing are not the sole preserve of small firms,
and the term can be applied to larger firms that adopt innovative marketing approaches. However, as firms
grow and mature their approach to marketing tends to become highly structured and routinized and less
innovative.

Although difficult to characterize precisely, entrepreneurial marketing (EM) has been described as informal,
dynamic, responsive to customer needs and often simple in its design and execution. Marketing is often
undertaken by the owner of the business, who is likely to be a generalist, rather than a marketing expert and
will typically be undertaken part-time alongside other activities. These features suggest a more seamless
and integrated approach to marketing in small ventures than is often evident in administrative marketing.

Marketing in small firms is often assessed in the context of larger firms, and has been judged reactive, short-
term and non-strategic. Similarly, small firms are often considered to be unaware of market trends as they
do not undertake formal market research. However, it is the lack of long-term and fixed plans that allows
entrepreneurial marketing to be responsive and flexible.

Part2

Relationship with customers: One key characteristic of entrepreneurial marketing is that the entrepreneur
or the entrepreneurial teams are often very close to their customers, interacting with them directly. They
are therefore able to understand customer needs and, given the increased flexibility associated with small
businesses can often respond rapidly to these needs. It is this closeness to the customer that prevents the
need for formal market research. Larger firms are often more distant from their customers and staff
interacting with customers are distinct from those developing or making products or services. A key process
for interacting with customers or other stakeholders is networking. Hence networking has been identified as
a key process in entrepreneurial marketing.

Access to resources’

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Whilst access to resources is important for all types of marketing, entrepreneurial marketing in particular is
seen as ‘based on the resources available at the moment’. The acquisition of certain resources may be
difficult. Entrepreneurs will shape their marketing strategies according to the resources they have at hand or
can readily acquire, rather than base their business and marketing strategy solely on customer needs.
Similar to administrative marketing, entrepreneurial marketing also seeks to meet the desires, needs and
motives of both the entrepreneur as well as the customer. The starting place for an entrepreneurial firm and
therefore entrepreneurial marketing activity is and must be the entrepreneur’.

PART 3

Traditional marketing is often associated with the ‘4 Ps’ – product, price, place, promotion.

'Product' is a tangible object or an intangible one for sale. Examples of tangible objects are gasoline and
pens, and of course, real estate as well. Intangible products are service-based like transportation, hotel
accommodations or insurance.

'Price' is the amount that a product is asking in the market. It is determined by a number of factors including
market positioning, market share, competition, cost, product identity and the customer's perceived value. A
business may increase or decrease the price of product if the product is in demand or in competition.

'Place' refers to the location where a product can be purchased or the target market of the product. It also
refers to the channel where the product is available for sale. Therefore, it is often referred to as the
distribution channel.

'Promotion' is all the communications that a marketer may use in the marketplace. It has five distinct
elements: personal selling, advertising, sales promotion, direct marketing, and public relations.

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 B205B Focus Topic – Final Exam – 1st semester 2019-2020 Prepared By AFA Version 2

While these all play a role in entrepreneurial ventures; a set of five different Ps has been identified as most
important in entrepreneurial context. These are people, purposes, practices, process, and passion. The 5 Ps
of entrepreneurial marketing (EM) include:

Dimension 1- People: This relates to the people in the entrepreneurial team – or to an individual
entrepreneur. Given the central role of individuals in entrepreneurial marketing – the traits, styles and
competencies of individuals are much more important than in the structured approach of administrative
marketing.

Dimension 2 -Purposes: The entrepreneurial venture will often has arisen from a customer need identified
by the entrepreneur – and which they feel strongly about. The venture is also strongly influenced by the
values and motivations of the founders and key members of staff. Entrepreneurial marketing seeks to meet
the desires, needs and motives of both the entrepreneur as well as the customer.

Dimension 3 -Practices: Entrepreneurial marketing tends to be informal, dynamic, responsive to customer

needs and often simple in its design and execution. Some entrepreneurs may not recognize they are
engaging in entrepreneurial marketing, rather they are just doing what is needed to engage with customers
and other stakeholders. However, it is this very informality and contingency that characterizes
entrepreneurial marketing.

Dimension 4 – Process: Networking and developing a web of relationships have been identified as key to
entrepreneurial marketing. Through these networks entrepreneurs and entrepreneurial teams can access
vital, timely and inexpensive market information that they can use to shape their products and services.

Martin (2009) suggests a fifth ‘P’ for entrepreneurial marketing – Dimension 5- ‘Passion’. She observes that
passion is important for entrepreneurs, sustaining them through the ups and downs associated with new
ventures. As she says, ‘passion sustains entrepreneurs through the uncertainties of daily decisions, the thrill
of new innovations and the challenges and setbacks that line the road to successes.

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Block 4 weeks 2.3.4

QUESTION: Profitable trading is what most business is all about. Therefore, at regular intervals, a firm
needs to prepare a number of financial statements.
 Briefly define the three types of financial statements used by businesses and discuss the balance
sheet in more details.
Most limited companies and larger professional partnerships produce, at least annually, three financial
statements that summarize and present financial information in a manner that has become fairly
standardized in the finance and accounting world.

The three financial statements generally produced are the following:

1. Income statement – previously known in the UK as the ‘profit and loss account’, and sometimes
known elsewhere in the world as the ‘statement of financial performance’. The income statement
covers a period of time (a month, quarter or financial year). It shows the net profit/net income of a
company during a specific period of time.

2. Cash flow statement: Like the income statement, a cash flow statement covers a period of time. It
also, again like the income statement, acts as a bridge between two balance sheets. While the
income statement explains the increase (or decrease) in the net worth of a business by showing how
a profit (or loss) is generated from sales and costs, the cash flow statement explains the change in
cash resources of a business by showing how cash has been generated and consumed under
various headings.

3. Balance sheet – sometimes known as the ‘statement of financial position’. A balance sheet is a list
of the financial resources (usually called ‘assets’) and the financial obligations (‘liabilities’) of a
business at a particular moment in time. It thus provides the ‘net worth’ of a business – the total
value of the assets less the total of any liabilities.

 The balance sheet in details

The balance sheet answers various questions about a business. What is it worth? Can the business pay its
bills? Failing to understand a balance sheet may lead to failing to keep control of cash resources – in other
words, finding it difficult to pay bills or the salary of employees. In the worst cases, a business can be broke
cannot pay bills that are now due – and in that event the business is liable to be ‘shutdown and its assets
sold off to its creditors. All of this sounds normal, but the balance sheet does much more for the business
manager than simply calculating the net worth of a business. It provides information on the state of the

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business’s financial health – its ability to pay its liabilities as they fall due, and flexibility in the face economic
challenges. The owners of a business and investors will use the balance sheet to calculate the risk attached
to their investment, and the likely reward that will arise given any specific level of profit earned. The balance
sheet can be described as ‘snapshot’ of a business’s financial affairs. Like a snapshot, a balance sheet gives
some information about what happened before the moment captured but nothing about what happened
later, and that is a useful metaphor for the use of a balance sheet in business. This is true of all financial
statements; they are all backward looking. While the income statement and cash flow cover a period of time
and the balance sheet covers a specific moment in time.

Halfords Balance Sheet as of 30 March 2016

US $ US $
Thousands Thousands
Assets
Non-current assets 442
Current assets 205
Total assets 647
Liabilities
Current liabilities 178
Non-Current liabilities 182
Total Liabilities 360
Total Assets – Total Liabilities =
Net assets
647-360 = 287
Equity = Net assets
Total equity
= 287
Capital Employed =
Total Equity + Non-current
Capital Employed
liabilities
287+ 182 = 469

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By looking at the above balance sheet answer the following questions:

 Define non-current assets, current assets, current liabilities, non-current liabilities, and capital
employed.
 Calculate the value of net assets & total equity, and capital employed.
 What can be learned from the company’s balance sheet?
Answer:

Non-current assets can be defined as (US$ 442,000) the long term investments made by the business in
property and equipment. Also included are intangible assets that represent invisible value, for example,
reputation or patents.

Current assets (US$ 205,000), reflect the assets which flow through the business as sales are made. The
usual items are stock, debtors and cash.

The current liabilities (US$ 178,000) are debts that must be paid in less than a year these often relate to
goods bought on credit.

The non-current liabilities (US$ 182,000) are mainly long-term loans.

Capital employed is a measure of the long terms resources in use by the business.

Net assets are simply the excess of assets over liabilities (US$ 647,000 minus US$ 360,000= US$ 287,000).

This surplus is also called total equity (also US $ 287,000).

Capital employed consists of the total equity plus non-current liabilities (loans).

For the company, this is US $ 287,000 + US $ 182,000 = US $ 469,000

Careful reading of the company’s balance sheet can be clear. The difference between current assets and
current liabilities which is also called net current assets or working capital indicates the range to which the
business has everyday funding to keep trading. The Balance Sheet relate profit to the value of resources
used in its generation. The total value of resources must ‘Balance’ with the sources of finance.

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Block 5 week 1
Part1: The nature of values
Part2: The ten motivational types of values
PART1 - The nature of values

(1) Values and beliefs are connected, When values are activated, they become infused with feeling. People
for whom independence is an important value become effected if their independence is threatened, feel
despair when they are helpless to protect it, and are happy when they can enjoy it. (Example: If you lose the
trust from your leader or colleagues it will make you unhappy.)

(2) Values refer to Desirable (Attractive) goals that motivate action. People for whom social order, justice,
and helpfulness are important values are motivated to achive these goals. (Example: Justice people could
act if they faced unfair situation.)

(3) Values transcend (Exceed) specific actions and situations. Submission and honesty values, (Example,
may be relevant in the workplace or school, in business or politics, with friends or strangers. These
features identify values from norms and attitudes that usually refer to specific actions, objects, or situations.

(4) Values serve as standards or criteria: Values guide the selection or evaluation of actions, policies,
people, and events. People decide what is good or bad, justified, worth doing or avoiding, based on
possible results for their values. But the impact of values in everyday decisions is rarely aware. Values enter
awareness when the actions or judgments one is considering have conflicting implications for different
values. (Example, voting in parliament elections)

(5) Values are ordered by importance (Priorities) relative to each other. People’s values form an ordered
system of priorities that prefer them as individuals. Do they attribute more importance to achievement or
justice, to novelty or tradition? This hierarchical feature also differentiates values from norms. (For Example;
family comes first as a top priority).

(6) The relative importance of multiple values guides action: Any behavior typically has implications for
more than one value. Values influence action when they are relevant in the context. (For example: The
person who always prays in the mosque gives a good impression and has good values toward others.
People will see him as straight person.)

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PART2: The Ten Motivational Types of Values: The values that individuals hold can help us to understand
and better manage the behavior of people in the workplace, as their values are considered to be a basic
motivator of individual and social behavior. Understanding the importance one assigns to values, as well as
personality traits can help in explaining how ethical behavior is understood and guided in the workplace.
The Ten Motivational values:

1- Self-Direction: this value derives from the need for control, mastery, autonomy and independence. Its
defining goals are considered to be independent thought and action-choosing, exploring (e.g.
Creativity, freedom, choosing own goals, curious, independent, self-respect, intelligent, privacy).

2- Stimulation: this value derives from the need for variety and challenge. In order to maintain an optimal,
positive, rather than threatening. Its defining goals are considered to be excitement and novelty (e.g.
Motivations and challenges).
3- Hedonism: this value derives from the need for pleasure and satisfaction. Its defining goals are
considered to be pleasure or sensuous satisfaction for oneself.
4- Achievement: this value derives from the need for success and recognition. Its defining goals personal
success through demonstrating competence according to social standards.
5- Power: this value derives from the need for dominance and control. To justify this fact of social life and
to motivate group members to accept it, groups must treat power as a value. Its defining goals are
considered to be social status and prestige (e.g. authority ,wealth and social power).
6- Security: this value derives from the need for security and a sense of belonging. Its defining goals are
considered to be safety, harmony and stability of society (e.g.family security, national security and
sense of belonging).

7- Tradition: this value derives from the need for obedience to abstract ideas and symbols. Its defining
goals are considered to be respect and commitment. Tradition values demand responsiveness to
immutable expectations from the past.
8- Conformity: this value derives from the need for respect others and self-discipline. Its defining goals are
considered to be restraint of harmful actions to others (e.g. not to harm others and honoring parents
and elders).

9- Benevolence: this value derives from the need for belonging. Its defining goals are considered to be
protecting the well-being of those who are considered to be in frequent personal contact. This value
emphasizes voluntary concern for others’ welfare (e.g. Families, friends).

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10- Universalism: this value derives from the need for survival of individuals and groups .Its defining goals
are considered to be protecting the well-being of all others and nature. People may also realize that
failure to protect the natural environment will lead to the destruction of the resources on which life
depends.

Block 3 week 4
Family vs. Stock market businesses, best way to run a business, reviewing the evidence

Family owned business, based on the share of voting and/or cash-flow rights held by family members.
However, no consensus exists across studies with regard to the voting rights. There must be two or more
individuals with the same last name listed as owners.

Family Entrepreneurship: are the entrepreneurs who lead the business because of their caliber and worth.
Family business makes up more than 60% of all companies in Europe. The range from sole proprietors to
large imitational enterprises. There are some Advantages in family entrepreneurship; Flexibility and
stability, Long term outlook, decreased cost and common values. On the other hand, there are some
Disadvantage as well Family conflicts, Favoritism, Succession planning, Lack of skills or experience.

For example; most family firms, including Marks and Spencer, eventually diluted control as they equalized
share voting rights and returned time and again to the stock market for new injections of capital. Family
members often don’t have the funds to take up rights issue after rights issue.

Stock market entrepreneurship: Publicly listed companies, is a company whose ownership is organized via
shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets.
There are some Advantages in stock market entrepreneurship Minority ownership, placing a value on your
business and creating a market for the company’s shares. On the other hand there are some disadvantages
as well time consuming, the need for transparency and responsibilities to shareholders.

For example: Walmart was family entrepreneurship then became stock market entrepreneurship.

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