Reference no: EM132535679

MNG91002 Entrepreneurship - Southern Cross University

Exam 1:

Part A - Sample Questions

In Part A of your final exam, each Problem will be worth 10 marks each. You will be asked to answer two of three available questions in Part A. Here are some example Part A questions (solutions appear on following pages).

Problem 1
A business may get involved in international trade via direct exporting, indirect exporting, or using the Internet. Which exporting method do you think is easiest? Which is the riskiest? Which requires the most knowledge about a foreign country? Explain your views.

Problem 2
How should failure be dealt with by entrepreneurs?

Problem 3
How does organisational culture serve to impede both the formulation and implementation of new strategies within an entrepreneurial firm?

Part B - Sample Case and Questions

In Part B, you will be presented with a short business case study. Read the case, and answer the questions associated with the case. Following is a sample case study.

Romulac Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the assembly of residential air conditioning units. There has been tremendous consolidation in Romulac's industry, to the point where only five suppliers of this particular component account for nearly 90 percent of worldwide industry sales. Paralleling this trend, its customers-composed of makers of branded residential air conditioning units like Carrier and Trane-have seen similar levels of consolidation in their own industry. Half of these firms produce all their components in-house, while the balance purchases them from specialised component manufacturers like Romulac. Romulac's business is extremely capital intensive, and their 40 percent share of the market allows them to also be the most profitable player in the industry. Strong competitors exist in Europe and Asia. Some of the larger Asian manufacturers have signaled an interest in more aggressively pursuing the lucrative international market. Romulac is presently considering a $400 million dollar investment in a new plant, which will create a component that is much quieter, more efficient, and is likely to satisfy future regulatory standards. While the core technology for the new component is very old, Romulac's engineering and design skills have allowed them to retain their low cost advantage, even though the component will represent a significant improvement over products currently provided by its competition.

Problem 4
Assume that you are a consultant and have been asked by the management at Romulac Inc. whether it should be a first mover with the new component technology. Romulac is leaning toward being a first mover (ie. moving ahead with the investment). As the consultant, Romulac has asked you to provide at least three reasons or benefits as to why Romulac should make the investment, thus being a first mover with the new technology? Explain your reasoning in full (bullet point answers are not acceptable).

Problem 5
Romulac Inc. have also ask that you develop an argument as to why Romulac should hold back and be a second mover with the new technology (ie. not to proceed with the investment, waiting to see if other competitors in the marketplace develop this new technology). Again, provide at least three reasons to Romulac, arguing that they might be better to wait. Explain your reasoning in full.

Exam 2:

Part A.

Problem 1
A business may get involved in international trade via direct exporting, indirect exporting, or using the Internet. Which exporting method do you think is easiest? Which is the riskiest? Which requires the most knowledge about a foreign country? Explain your views.
Some of the general concepts/points that we would usually see if students were asked this question:
• Of course student answers will vary, depending on their perspective and examples used.
• Generally speaking, indirect exporting would usually be easier than direct exporting because the business would not have to try to find foreign buyers - that is the job of the intermediary, the company working with your firm to export internationally.
• Some students may believe the Internet would be the easiest way to find foreign buyers.
• Indirect exporting would probably carry the smallest amount of risk because the intermediary (ie. The ‘middleman') would know the language and customs of the foreign country.
• Direct exporting would probably be the riskiest because it would be more expensive than exporting via the Internet.
• Indirect exporting would probably require the least knowledge because buying and selling would be handled by a intermediary/agent.
• The knowledge required for direct exporting would depend on whether the business owner travels to the foreign country or hires a special sales representative to call on foreign customers.
• Exporting via the Internet would require quite a bit of knowledge because the owner must know about the foreign country to design a web site and market a product.

Problem 2
How should failure be dealt with by entrepreneurs?

General concepts/points for discussion:

• The most effective entrepreneurs are realistic enough to expect difficulties and failures.
• If they can deal effectively with any grief that emanates from the failure then they will not become disappointed, discouraged, or depressed by a setback or failure.
• In adverse and difficult times, they will continue to look for opportunity. In this way entrepreneurs will believe that they learn more from their early failures to form the foundation of later successes.

Problem 3
How does organisational culture serve to impede both the formulation and implementation of new strategies within an entrepreneurial firm?

Some of the general concepts/points that we would usually see if students were asked this question:
• Culture is about a shared commitment to beliefs which encourage consistency in an organisation's behaviour.
• An important facet of any corporate culture is the development of a customer orientation.
• Culture, in some instances, does not encourage such an orientation. Culture tends to promote (at best) shifts in strategic positions, so if a customer orientation was imposed on the firm (by senior managers), it may take some time for it to ‘embed' into the firm's psyche.
• Culture can also ‘blind' managers to changing external conditions - they tend to stick to what worked in the past.
• In order to promote change and adaptation (particular with respect to changing consumer needs), managers and entrepreneurs should seek to ‘build in' flexibility and innovation as key elements of the organisation's culture.

Part B

As noted in this practice exam, you will be provided with a short case study in your final paper. The case will be quite ‘open' in that you'll be able to bring in quite of bit of knowledge you have gained this session. The example case here (on Romulac) helps to provide you with some scope as to what an exam case study might look like, and the detail required when addressing the case.