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MID TERM CASE STUDY

Entrepreneurship (Universiti Utara Malaysia)

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SECTION A: MINI CASE STUDY (55 MARKS)

INSTRUCTION:
Answer ALL questions in the space provided.

Mini Case 1: Awang's Dilemma

Awang was a real craftsman when it came to being a machinist. Awang had learned almost all
that he knew from Daud, his first and only employer. Awang was married and had three young
children. He was 33 years old and had worked for Daud ever since he finished his tour in the
Army. In 12 years, Awang had polished his skills under the watchful and critical eye of Daud.
Daud was quick to recognize Awang's talent for the trade. Awang had a positive attitude about
learning and displayed a drive for perfection that Daud admired.

Daud's Machine Shop was a successful small business. Its success was based mostly on the
reputation for quality that had been established over its 42 years in operation. Daud had come to
this country with his new wife, Salmah, when he was in his late twenties. Now the business was
a success, but Daud remembered the early years when he and Salmah had to struggle. Daud
wanted the business to continue to produce the highest quality craftsman products possible. On a
Friday evening, he called Awang into his office at closing time, poured him a cup of half-day-old
coffee, and began to talk with him about the future.

"Awang, Salmah and I are getting old and I want to retire. It has been 42 years of fun but these
old hands need a rest. In short, Salmah and I would like you to buy the business. We both feel
that your heart is in this craft and that you would always retain the quality that we have stood
for." Awang was taken back by the offer. He, of course, knew Daud was getting older, but had
no idea Daud would retire. Awang and his wife, Timah, had only RM4,200 in the bank. Most of
Awang's salary went for the normal costs of rearing three children. Daud knew Awang did not
have the money to buy the business in cash, but he was willing to take a portion of the profits for
the next 15 years and a modest initial investment from Awang.

Awang had, for the past four years, made most of the technical decisions in the shop. Awang
knew the customers and was well respected by the employees. He had never been involved in the
business side of the operation. He was a high school graduate but had never taken business
courses. Awang was told by Daud that even after deducting the percentage of the profits he
would owe under the sales agreement, he would be able to almost double his annual earnings.
Awang would have to take on all the business functions himself because Timah had no business
training either.

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QUESTION 1 (15 MARKS)

A. Which entrepreneurial characteristics does Awang have that may be important to his
success?
(5 marks)

B. Which characteristics could lead to Awang’s failure?

(5 marks)

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C. What steps should Bill take to avoid the pitfalls common to a small business?
(5 marks)

Mini-Case 2: Doing "good" but not doing the "right" thing

Ali and Nor are spouses and partners in a business called "Segalanya Bendera." They made and
sold a variety of national flags in various shapes. About 40 percent of their total revenues came
from a single wholesale retailer, GM Kuala Lumpur, the largest wholesale plaza in Malaysia.
When Ali and Nor started their company, their son's classmate's father was a senior buyer at GM.
The buyer, Yusuf, encouraged Ali and Nor to submit a bid to GM and he helped the couple
establish the relationship that led to subsequent recurring sales at the retailer. Yusuf's wife, Sarah
was the head of the school's PIBG and in charge for fund raising. Without Yusuf's asking, Ali
and Nor started contributing significant sums of money to the PIBG. Yusuf never discouraged
them from contributing. In a cost cutting move, Yusuf was laid off from GM and in his place,
Bakar became the buyer who interacted with Ali and Nor. Bakar hinted to them that there were
other vendors willing to supply flags at a lower price but that if they would contribute to the
rebuilding of his (Bakar) community's softball park, they would continue to sell their product at
GM.

QUESTION 2 (10 MARKS)

A. Did Ali and Nor act ethically in contributing to the school's PIBG?
(3
marks)

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B. If they agree to pay for the community park in exchange for business from Bakar, would
Ali and Nor have acted ethically?
(3
marks)

C. Contributing to a PIBG and donating to build a community park are civic actions. Could
Ali and Nor NOT be considered good actions because they indicate social responsibility?

(4 marks)

Mini Case 3: Protecting Your Intellectual Property

Ahmad, Hassan, and Rahmat were childhood friends who had always talked about starting a
business together after college graduation. Ahmad had the financial background and startup
capital to contribute and Hassan and Rahmat had the technical knowledge they believed would
give them the competitive advantage needed to become an industry leader.

During their early college years, Hassan and Rahmat developed a new and innovative way to
manufacture computer components. When they shared their idea with Ahmad, he was able to
draw up a detailed business plan to present to potential investors when the three were ready to
launch their venture. They had been very careful not to disclose anything about their innovative
idea to other colleagues or any of their friends and were anxious to get started.

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After selecting the company name "Millennium Computers" the three friends come to you for
advice on intellectual property rights.
QUESTION 3 (15 MARKS)

A. To protect their innovative process for manufacturing computer components from

unauthorized use, which type of intellectual property should the threesome apply for?
Identify the office to which they should apply and outline the steps involved in the
process.
(5
marks)

B. Should they consider protecting or registering their company name? Which intellectual
property would cover this concern? Could they use the name without registering it?

(5 marks)

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C. Since the primary weapon to protect intellectual property is the legal system, what would
you advise the friends if they have to protect intellectual property sometime in the future
by threatening a lawsuit?
(5
marks)

Mini-Case 9-1: Marketing a Nonprofit - Virtual Opportunities

Kelab Pemuda Ihsan is a local youth organization supported solely by the donations of
individuals and the local church community. Its co-founders, Hamid and Nasrul, are considering
launching a Web site to promote upcoming events and raise money for a new gym. Their good
friend Omar has volunteered to develop a Web site, which they feel will help promote their
efforts.

QUESTION 4 (15 MARKS)

A. How might a Web site benefit the youth club? Discuss with examples.
(5 marks)

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B. Which other type of activities should New Wave Chance implement to support the
success of the new Web site?
(4 marks)

C. The building fund manager, Mr. Grover, has been overwhelmed by the generosity of the
community and numerous requests to donate supplies. Describe how the Web site may be
able to help him organize the donation requests and determine the type and quality of the
building supplies needed?
(6 marks)

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SECTION B: THEORETICAL APPLICATIONS (45 MARKS)

INSTRUCTION:
Answer ALL questions in the space provided. For multiple choice questions, CIRCLE the right
answer.

QUESTION 1 (4 MARKS)
A. Linda and Johan, both corporate attorneys in Kuala Lumpur City, have grown tired of
their lengthy daily commute, the stress of their jobs, and the overbearing policies of their
employers. They have decided to leave their six-figure jobs and together open a guide
service in Sabah. Melinda and John are examples of ________.
A) corporate castoffs and corporate dropouts
B) corporate dropouts and copreneurs
C) corporate castoffs and copreneurs
D) copreneurs and serial entrepreneurs
(2 marks)

B. Azman has come to you for advice on starting a business venture. He wants to know the
best way to gain the experience he will need. You suggest that he ________.
A) read a small business book
B) seek knowledge and experience in the field he wishes to enter
C) determine his weaknesses and return to school for a term or two
D) just jump in and learn as he goes
(2 marks)

QUESTION 2 (2 MARKS)
Which of the following is NOT something that a small business owner should do to manage a
culturally diverse workforce successfully?
A) Learn to recognize and correct other's biases and stereotypes.
B) Avoid making invalid assumptions.
C) Concentrate on communication.
D) Continue to adjust your company to your workers.

QUESTION 3 (4 MARKS)
A. Mind mapping is a useful tool for jump-starting creativity. It includes ALL of the
following EXCEPT ________.
A) sketching a picture to symbolize the problem or area of focus in the center of a sheet of
paper
B) writing down every idea that comes into your mind, connecting each idea to the central
picture
C) allowing your mind to rest for a few minutes before integrating the ideas
D) forcing creativity when ideas start to trickle

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(2 marks)

B. The technique of ________ uses THREE (3) columns that allow the entrepreneur to
weigh both the advantages and the disadvantages of a particular decision and work to
maximize the variables that support it while minimizing those that work against it.
A) force-field analysis
B) TRIZ
C) brainstorming
D) mind mapping
(2 marks)

QUESTION 4 (17 MARKS)

A. Printed newspapers have seen their readership rates decline as new generations of
potential readers turn to their iPads and smartphones for sources of news. This is an
example of ________.
A) threat of substitutes
B) bargaining power of buyers
C) bargaining power of suppliers
D) rivalry among existing firms
(2 marks)

B. How does Porter's five forces model help analyze an industry?

(5 marks)

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C. You have been asked to explain how rivalry among companies competing in the industry
affects the attractiveness of the industry. How would you explain it?
(5 marks)

D. How does the threat of substitutes affect an industry's structure?

(5 marks)

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QUESTION 5 (4 MARKS)
A. Your local grocery store uses a pricing technique known as ________ on a weekly basis,
in which they mark down the price of several popular items, sometimes well below their
normal price, in an effort to increase customer traffic and to boost sales of other items.
A) odd pricing
B) leader pricing
C) price lining
D) suggested retail pricing
(2 marks)

B. A customer who purchases a television from Sen Heng Electric and pays for it in 36
monthly payments is most likely using ________ credit.
A) trade
B) charge account
C) installment
D) debit card
(2 marks)

QUESTION 6 (14 MARKS)

A. Your friend Jake owns a business that is achieving phenomenal growth. Explain why it is
said that: "Fast-growing companies are most likely to experience cash shortages."

(5 marks)

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B. The profits your small business is generating are high; however, you never seem to have
enough cash to pay your bills on time. Are cash and profit the same thing? Why or why
not?

(5 marks)

C. Jane is arguing with Joan about how much cash their small retail outlet needs as they
prepare their cash budget. Jane feels that with the Christmas season coming, their busiest
time, they need more cash available while Joan feels they do not because their sales
volume will be up significantly. Jane and Joan are discussing which step of the cash
budgeting process?
A) Determining an adequate minimum cash balance
B) Forecasting sales
C) Forecasting cash receipts
D) Forecasting cash disbursements
(2 marks)

D. Patel Industries recently filled an order from one of its customers, Oxmoor Gardens, a
small garden supply store. Oxmoor's owner recently received an invoice from Patel for
RM1,278.64 with selling terms of "2/10, Net 30." Therefore, ________.
A) the selling terms indicate that Oxmoor must pay 2 percent of the invoice by the 10th day
of the month with the balance due in 30 days
B) the selling terms are offering Oxmoor a 2 percent discount if the bill is paid within 10
days; otherwise the full amount of the invoice is due in 30 days
C) the selling terms indicate that the full amount of the invoice is due within 30 days and
Oxmoor will be subject to a 2 percent finance charge for every 10 days that the bill is past
due
D) the selling terms indicate that Oxmoor has not yet qualified for a quantity discount and
must pay the full amount of the invoice within 30 days.
(2 marks)

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END OF QUESTIONS

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