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Sample Examination Paper

QUESTION

Jones had saved a considerable sum of money for the last few years working as a manager and he
feels that it is time for him to start a business of his own. He considers setting up a partnership
business. He consults a close friend and persuades him to invest in his new venture. Looking at
the opportunities and his working experience and business knowledge, he lacks confidence and
after looking at the various types of business, he decides that a franchise business would be good
to start to gain some experience rather than forming a partnership business with his friend. Many
of his friends advise him to go alone and start a sole proprietorship business. He is in a confused
state as to what do..

a) What advantages do you think Jones would derive if he is to set up a partnership
business? (10marks)
b) Would you recommend to Jones to take up a franchise? (10 marks)
c) Sole proprietorship business has many advantages and therefore would you advice Jones
to set up one instead of a partnership business? (10 marks)
d) If Jones were to purchase an existing business rather than setting up one on his own, what
are the benefits that he would derive from such decision? (10 marks)

ANSWER
a. Partnership
Advantages
Share in hours of work to manage the business
Share losses of business
Able to get ideas from other partners
Able to have different expertise to manage business
Abe to have more capital
***Any other relevant points
b. Franchise
Advantages
Less capital required
Branded product
Franchisor to give training etc and set up the business
Less risky as customers and markets are clearly established
Good for entrepreneurs who lack experience
Established procedures and systems guide to manage business
As products and raw materials or menus are provided by franchisor
- Economies of scale in purchase and advertising cost are passed down to franchisee
***Any other relevant points

c. Sole Proprietorship:
Advantages
Ease of formation
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Complete control (one decision maker)
Smaller capital and start up cost
***Any other relevant points
Disadvantages:
Unlimited liability and risk
Limited capital
Limited viewpoint, skills and resources
***Any other relevant points



Student needs to recommend any form of the business venture that is suitable based on Jones
situation and supported by appropriate arguments based on the scenario.

Purchasing business
Advantages
Less planning and time required to set up business
Existing customer base
Existing suppliers
Established business name
Existing systems, equipment etc
Existing infrastructure

QUESTION

Stephen has been looking at several business sites to ensure that a suitable premise strategically
ideal for his furniture manufacture business could be found. He needs to make sure that raw
materials are sourced as close to the proximity and the customers are able to assess the premises
without much problem Stephen needs to consider many other factors as well. What factors has
Stephen to consider? (Total 30 marks)

ANSWER

Well explained all criteria for business premises locations based on furniture
manufacturing business such as:
Customer traffic area
Not near traffic lights
Easy assess for entry and exit to premises
Near to transport such a railways, roads etc
Near to highways etc
Near to suppliers
Easy access to utilities such as electricity, water etc
Easy disposal of waste
Premises local authority approvals on prevention of water, air and sound
pollution etc
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loading and unloading bay for receiving and sending goods
***Other relevant points

QUESTION

It is said that a good business plan consist of marketing plan as an integral part. The concept of a
marketing plan is to set a direction the business needs to take. You know the role the marketing
plan plays in the process of a business plan as well as promotion mix that back up the marketing
plan. You are working for a marketing organization and your Managing Director request you to
design and show how the three components assist the business to carve out a strategy.
(Total 30 marks)

ANSWER

Basic structure of business plan outlined and contents explained such as
Executive Summary
Company Background
External Environment Analysis
PEST Analysis
Industry Analysis
Competitor Analysis
Internal Environment Analysis
SWOT
Marketing Plan
Operational Plan
Human Resource Plan
Risks & Contingencies
Financial Plan
Supporting Documents
Marketing Mix Strategies
Marketing description
Product strategies
Price strategies
Place strategies
Promotion strategies
- Promotion
- Personal selling
- Advertising
- Campaigns etc

A good answer should show the link between the three areas and how the strategy is decided and
how the promotion strategies are fitted into the business plan to enable business to make profit




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QUESTION

Your friend, Mohd Ali has asked you to recommend good competitive strategies to be
successful for his business. He wants to understand competence and core competence and
distinctive capabilities based on a study of the external and internal business environment. This
would also mean that a good value chain is formulated to ensure success. What would be your
recommendations? (Total 30 marks)


ANSWER

External Business Environment PESTLE, Porters Five Forces and Competitor Analysis &
Internal business environment Technology, HR. Systems and Infrastructure Carry out SWOT
and look at what are the strengths and build competence etc to match with need of external
environment
Competence to have the necessary skills, technical expertise etc: Core competence to be able
to build some augmented products with value added and distinctive capabilities able to acquire
special skills to differentiate products superior and unique compared to the competitors Value
chain enhancement based on competence to add value to customers mentioned


QUESTION

In one brainstorming session, there were many entrepreneurs and each of them generated new
ideas to manage their businesses. You were asked to propose some sources of innovative ideas.
How would you using the external and internal business environment suggest innovative ideas
for a business, (Total 30 marks)

ANSWER

Sources of Innovative Ideas
Trends A paradigm shift in trends with major population
Unexpected occurrence unanticipated or unplanned surprise that turns out to be new
ways of doing things
Incongruities Gap that exists between expectations and realty
Process needs- new inventions to solve a problem
Industry and Market Changes- industry growth and inventions needed to changing
customer needs
Demographic Changes- Changes in demographics such as age, retirees etc needing
change to demand of customers due to demographic change
Perceptual Changes Perceived changes to lifestyles eg health consciousness
Knowledge Based Concepts New methods, new thinking and new knowledge etc that
leads to creation or development of something new
Examples given

End of Paper
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