COMSATS University Islamabad

LAHORE CAMPUS
Defence Road, Off Raiwind Road, Lahore.

DEPARTMENT OF MANAGEMENT SCIENCES

Terminal Examination

Course Title: Entrepreneurship Course Code: MGT403

Resource Person Muhammad Umar Farooq Semester Fall 2020

Maximum Maximum
Program / Batch FA17BBA,BAF 50 4 hrs
Marks Time

Student’s Name: Reg. No.

Important Instructions / Guidelines:

 Answer all questions. Its an open book paper, you can take help from any source
 Exemplify where applicable. Please follow the word limit. Plagiarism not allowed.
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Question 1: (10 Marks, Max 450 words)
Why do you think that writing a business plan is so important for new ventures? Would the entrepreneur be
better off spending more time selling his or her product rather than investing so much time in writing a
business plan?
Answer

When starting off a business, writing a detailed business plan is the first thing someone should do. This
is because the business plan serves as means to look at the goals and aims of the business in a strategic
manner and chances of failure of business are reduced as most inconsistencies are traced way before the
can actually cause a problem in the operation of a business.

First of all, detailed business plan helps entrepreneurs to avoid big mistakes such as;

 Lack of Market need: The product that the company is selling doesn’t have any buyers.
 Lack of Capital: the operations of the business require more money than the business already
has.
 Tough Competitors: The profitability of a business becomes very low in a very tough market,
and new companies often sink.
 Inconsistent pricing: If the pricing of the products is too high or too low, both issues can be the
reasons for the downfall of a business
All of these issues can be easily catered for if they have been considered before investment has been
started.

Secondly, most businesses are created because of a vision and passion. Not because the owner wanted
immediate profits. They had a revolutionary idea that they wanted to make a reality. Passion can be a

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great source of motivation, but the success of a business depends greatly on the bank of information that
they have about the market. Planning is necessary if a vision has to be made into a reality. A very
important part of business planning is Market Research. Market research gives you very important
information on which your customers are, who are your rivals in the market and what industry would
that product belong to. These can be very important breakthroughs for an entrepreneur who is starting up
with their business.

Thirdly, a business plan becomes important means for investors to understand whether or not they
should fund your business. Investment is a very important factor for small businesses that are just
starting off. And in such a competitive climate, investors do not just invest on words, they need
assurance of the fact that their investment would not go to waste. A detailed business plan allows
entrepreneurs to argue the feasibility of their business based on actual data are more likely to receive
funding.

Therefore, it is understandable that selling and marketing a product are the actual factors that keep a
business in the market, but if you are trying to do that on a product that is not properly built for the
market or has inconsistencies, the business will eventually fail. Therefore, a business plan is worth
investing time because ultimately it can determine the success of the business.

(449 words)

Question 2: (10 Marks, Max 450 words)

Find three example of firms that pioneered a new product in a new market and were able to achieve long run
success based on that entry. Give reasons.

Answer

1. The first example of a company making a new product and being successful in it is Lamborghini.
Lamborghini was initially a truck and tractor manufacturing company and started making sports
cars to rival Enzo Ferrari. The story of the creation of the Lamborghini is very famous. The
owner of a tractor company name Ferrucio Lamborghini bought a Ferrari and was not satisfied
with the transmission of the car. Upon talking to Enzo Ferrari, he was insulted and Ferrucio then
decided that he would beat Ferrari at his own game. The line of cars is extremely successful as
not only did they make the world’s fastest car soon after their launch beating Ferrari, even today
they are regarded as one of the best car manufacturers in the market. The success of Lamborghini
was based on them being able to produce the world’s fastest car and later making the first hyper-
car of the world. The products they make are considered a luxury and cannot be afforded by even
the middle class.

2. Another major example of an amazingly successful firm that launched a new product in a new
market is Google. Google was initially just a search engine based on the Alta-Vista platform. But

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 Google expanded into the smartphone market by launching their Smartphone operating system
named Android. The operating system is so successful that it is the only successful rivaling
operating system to Apple’s IOS. And Android phones are arguably equivalent or better than
phones that run on IOS. Android OS expanded so much that it is being used in applications that
go above and beyond even smartphones.
3. Armani is an example of a firm that has been very successful is their attempt to present a new
product in a new market. Initially, Armani was an Italy based fashion firm that dealt in men and
women apparel. But in 2010 Armani extended into the unrelated field of hotels, they launched
their first hotel in Burj-Khalifa. The hotels are very well known and bring a lot of revenue to the
Armani firm. Furthermore they have contracted with Lodha to build luxury grade homes and are
going to expand into that market too. The hype is very much and they are sure to succeed with
their ventures in that direction as well. The success of Armani is because of the top quality they
provide. They only use the premium materials to give a sense of top-notch luxury to their clients
and as a result are as successful as they are today.

(420 words)
Question 3: (10 Marks, Max 450 words)
Which are the three current fastest growing companies in Lahore? What opportunities and strategies
they have pursued to achieve this level of growth. Explain
Answer

The first is e2e supply chain management. As we know that a supply chain is one of the most important
parts of a business and most new businesses do not have the resources to run their personal supply chain
and cannot manage to ship off their products to buyers easily. Without a strong supply chain a business
may not be able to meet their goals of selling the products or even producing them, and all of these
things are extremely costly and companies that are trying to save costs in the modern climate cannot
manage to spend excessively in this area. Therefore e2e supply chain management aims to help
customers improve their overall supply chain efficiency with flexible global, transportation and
distribution services, supported by our experienced team of dedicated employees and web solutions.
They treat all their customers with extreme value and have deep understanding of their businesses as to
undergo their supply chain needs. They have done a number of large scale projects, the most recent
being the Punjab Government Laptop Project which was a game changer for laptop ownerships in
Pakistan.

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Second are the Sofizar SEO services. In the modern day of information technology, businesses cannot
thrive alone on traditional methods of location based and on spot sale and purchase. The dawn of
technology had brought about a huge change in market communication and internet has become a huge
platform for it. New businesses have to rank their pages by search engine optimization to make sure that
they can be easily detected by their customers and are not left out in the dark. And even this area has
become highly competitive. Therefore, Sofizar provides services of digital marketing and has highly
professional search engine and social media optimization experts. They provide top search engine results
for local businesses so that their presence can be seen. They provide paid strategies for advertising and
can get your websites visible to searchers within days.

Thirdly, we have Tradekey. Tradekey is a company that owns tradekey.com that is one of the largest
international marketplaces for electronics in the world. This is known for both exporting and importing
in the international market. Buyers, sellers, importers and exporters are all connected around the globe
through this website and it spans over 240 countries. Based on its unique services, powerful search
engine, efficiency, cost effectiveness, trade matching and product promoting tools, it is one of a kind.

(403 words)
Question 4: (10 Marks, Max 450 words)
What impact does entrepreneurship have on your political, economic, and legal environment. support your
answer with arguments.
Answer

 First of all, the impact of entrepreneurship on the economic environment is very critical.
Entrepreneurship creates opportunities of innovation in the market of a country. Innovation
brings efficiency in terms of revenue and performance in a product that ultimately benefits the
economy with sustainable products. Entrepreneurship creates job opportunities and helps fight
unemployment in that way. This helps generate income for oneself and others, generally
improving the economic situation of a country. It increases competition in a market and as a
result it improves the overall pricing of products in a market as it mitigates monopolies in a
market. It also allows for the creation of novel products that may become very popular and
become major exports and help the economy in that way.

 The political environment is also greatly impacted by the entrepreneurial activities of a country.
As entrepreneurship has a great impact on the economy, the economic environment of a country,

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 they influence the policies and decision making of the government. A good economic
environment is directly related to a good political environment. Inflation rates decrease greatly.
As the rate of inflation decreases, the buying power of the people in the country increases so
even the people earning low wage can afford basic necessities that are required to keep a
household running. In a good economic environment the governments tend to be more
prosperous and allow the imports of more products from other countries. The policies become
more lenient towards businesses and taxes on the citizens tend to decrease. Furthermore, the
currency of the country starts gaining value in comparison to the other countries due to lower
inflation rates and people from other countries prefer trade and political relations with a country
that has economic strength. This allows for better allies in the international political world and
better reputation of the country as well. There is a general sense of peace in the political
environment of a country.

 The legal environment becomes much more allowing towards business activities. Governments
tend to make laws that encourage the opening of businesses and allow loans for businesses to
operate. Law making comes more towards protection in the business world than to restrict the
activities. When the political environment of a country improves, the legal environment is
affected directly, discount rates on bank loans increase allowing for easier loans and more
investments in business opportunities. Also the law enforcement of the country improves and
crime rates decrease as the legal environment strengthens and justice prevails.

(413 words)

Question 5: (10 Marks, Max 450 words)

“University: A Great Place to Launch a Business venture”, you being the consultant, are appointed to help
students understand the normal obstacles of starting a business along with other barriers University
entrepreneurs may face? Please discuss their barriers and obstacles and a way to ensure the maximum
number of startups at University level.

Answer

Today, the world of business is growing as fast as technology is allowing it to. Today there are
approximately 150 million startups and every year 50 million new ones launch. On each day, 137,000
startups launch, these numbers are astounding, but not every startup is bound to succeed. The very

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extremes of these numbers are in themselves a major cause of trouble for new startups. The top
problems startups faces are;
1. Competition is one of the most major obstacles faced by any startup. The giants in the market are
in tough rivalry already and the survival of any new startup becomes very difficult as they try to
compare their products, prices and services in contrast to the giants in the market. This all
increases manifold when it comes to online market.
2. Unrealistic expectations are one of the most major downfalls of startups. Startups sometimes
experience a booming success and in the heat of the moment forget that such a success has to be
maintained as well. to be successful in the corporate world a business has to be sustainable and
sustainability comes from consistent efforts.
3. In the business world, due to the extreme competition, startups cannot thrive on themselves.
Partnerships are key when it comes to maximizing profits and providing value to customers. But
in the modern world where the business world is so saturated, it is extremely difficult for newly
starting businesses to finding trustworthy partners.
4. Financial management is an important factor determining the success of a startup. As the
business model grows, so do costs and sometimes the prices cannot be maintained without
having to face loss. Therefore financial management is a very important factor in determining the
success of a business.
5. Cyber security is a major concern in the modern market. With the dawn of technology, new
forms of criminal acts have surfaced creating room for very unfortunate circumstances. Rate of
cybercrimes has increased dramatically over the past few years and new businesses are prone to
online security threats.
6. Last but not the least, for a new business, winning the trust of customers is the greatest challenge
of them all. How do you get a buyer that is already buying from someone who has been in the
market before you to buy from you? This is by far the greatest concern of any startup in the
current climate.
All of these problems that have been stated are not unavoidable. The best way to make sure that none of
these problems become so great that the startup has to fail is to do proper business planning and market
research. This allows a business to strategically avoid any of the problems above.
(449 words)

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