Entrepreneurship and Enterprise Development Final Exam Biruk Tesfa

Maryland International College
School of Graduate Studies

Entrepreneurship and Enterprise Development
Final Exam
Name: Biruk Tesfa

ID No. 022/20
January 16, 2021

Adiss Abeba Ethiopia
PART ONE: Discuss the Following Questions to the
Point on the Separate Answer Sheet Provided in View
of the Theories Discussed in this Course
1. Identify an exemplary entrepreneur in Ethiopia and discuss the

following questions:
I choose Samrawit Fikru, founder and CEO of Hybrid Designs, the company
behind the internet and phone-based ride-hailing service RIDE.
a) What kind of entrepreneur he/she is?
She is Innovators because she comes up with new ideas and turns it into
viable businesses.
b) What entrepreneurial characteristics does he/she have?
She has a lot of entrepreneurial characteristics that are

 Need for Achievement
 Total Commitment
 Self-confidence
 Vision
 Risk-taking
 Decision-making
c) What do you think motives him/her to engage in entrepreneurial
activity?
I think in Ethiopia there is a big transportation problem students will late,

teachers will late, doctors will late…every employee will late so is she try to
think to solve this problem then she engage with it.
d) Is the entrepreneur innovative or creative? Please explain and

illustrate your answer.
She is innovative because she comes up with new ideas and turns it into
viable businesses.
e) What do you think is the contribution of his/her venture?
She slove the transportation problem in Ethiopia but no all transportation

problems but at least she tries to make it easy to find transport whenever we
need it.
2. Why should an entrepreneur develop a business plan? Briefly

discuss the major components of a business plan? Describe the
three tests that an entrepreneur needs to pass in order to obtain
external financing from potential lenders and investors.
 Why should an entrepreneur develop a business plan?
Writing a well-thought-out and organized business plan dramatically

increases our odds of succeeding as an entrepreneur. A good business plan
can help:
 Determine whether our business has a chance of making a good profit
 Provide an estimate of our start-up costs, and how much you'll need to
invest or finance
 Convince investors and lenders to fund our business
 Provide a revenue estimate (by defining our market -- who our
customers will be -- and the percentage of the market we can expect to
reach)
 Make money from the start by devising an effective marketing strategy
 Compete in the marketplace (through an analysis of what our
competition lacks), and
 Anticipate potential problems so we can solve them before they
become disasters.
 The major components of a business plan
 Executive Summary
Our executive summary should appear first in our business plan. It should
summarize what we expect our business to accomplish. Since it’s meant to
highlight what we intend to discuss in the rest of the plan
 Company Description
The next section that should appear in our business plan is a company
description. It’s best to include key information about our business, our goals,
and the customers we plan to serve. Our company description should also
discuss how our business will stand out from others in the industry and how
the products and services we’re providing will be helpful to our target
audience.
 Market Analysis
Our market analysis will show that we know the ins and outs of the industry
and the specific market we’re planning to enter. In that section, we’ll need to
use data and statistics to talk about where the market has been, where it’s
expected to go, and how our company will fit into it.
 Competitive Analysis
We’ll need to show that we know their strengths and weaknesses and we
know how our business will stack up. If any issues could prevent us from
jumping into the market, like high upfront costs, it’s best to say so. This
information will go in our market analysis section.
 Description of Management and Organization

Following our market analysis, our business plan will outline the way that
our organization will be set up. we’ll introduce our company managers and
summarize their skills and primary job responsibilities. If we want to, we can
create a diagram that maps out our chain of command.
 Breakdown of Your Products and Services

If we didn’t incorporate enough facts about our products and services into
our company description (since that section is meant to be an overview), it
might be a good idea to include extra information about them in a separate
section. Whoever’s reading this portion of our business plan should know
exactly what you’re planning to create and sell, how long our products are
supposed to last and how they’ll meet an existing need.
 Marketing Plan
In our business plan, it’s important to describe how we intend to get our
products and services in front of potential clients. That’s what marketing is all
about. As we pinpoint the steps we’re going to take to promote our products,
we’ll need to mention the budget we’ll need to implement our strategies.
 Financial Projections
We’ll reveal the financial goals and expectations that we’ve set based on
market research. We’ll report our anticipated revenue for the first 12 months
and our annual projected earnings for the second, third, fourth, and fifth
years of business.
 Three tests that an entrepreneur needs to pass in order to obtain external

financing from potential lenders and investors
 Reality Test
We must prove that a market for our product or service does exist. Focuses on
industry attractiveness, market competitors, potential customers, market size,
degree of competition, and similar factors. These factors point to the potential
for strong demand for the business idea.
 Competitive Test
Evaluate our company’s relative position to its key competitors. How do our
company’s strengths and weaknesses compare to those of the competition?
 Value Test
We must prove to potential lenders and investors that our business offers a
high probability of repayment or an attractive rate of return.
3. Mr. Nigusu commissioner of the Job Creation Commission of
Ethiopia is worried about the nations job creation capacity and
the success of the established enterprises and want to consult
you on how to improve enterprises success. Marketing is
considered as one of the main challenges for enterprises success
in Ethiopia. Did you agree? If so what do you think is the critical
problem and what will be your recommendation for the
commissionaire to resolve the problem?
 Critical problems in marketing

 Not knowing how to explain the product or service we want to sell
 Not finding our market segment
 Lack of commercial department
 Problems with the price of your product
 Lack of coordination between the marketing and sales departments
 Lack of Brand Image, Professional Reputation, Personal Branding
 Not having a good online presence
 Recommendation for the commissionaire to resolve the problem
 Give training for the entrepreneurs about how to market

product/service
 Also, give mindset training for the entrepreneurs
 Give financial support
o Prepare loan with a low-interest rate
o Give them priority
4. Briefly discuss the meaning and importance of succession
planning in entrepreneurship?
 Meaning of business plan in entrepreneurship
A business plan is a written document that describes in detail how a business

usually a startup defines its objectives and how it is to go about achieving its
goals. A business plan lays out a written roadmap for the firm from
marketing, financial, and operational standpoints. Business plans are
important documents used to attract investment before a company has
established a proven track record. They are also a good way for companies to
keep themselves on target going forward.
 Importance of business plan in entrepreneurship
 To raise money for our business
Potential investors or lenders want a written business plan before they give us
money. A mere description of our business concept is not enough. Instead,
ensure we have a thorough business and financial plan that demonstrates the
likelihood of success and how much we will need for our business to be
successful in the long-term.
 To make sound decisions
As an entrepreneur, having a business plan helps you define and focus on

your business ideas and strategies
 Help us identify any potential weaknesses
Having a business plan helps us identify potential pitfalls in our idea. We can
also share the plan with others who can give us their opinions and advice.
Identify experts and professionals who are in a position to give us invaluable
advice and share our plan with them.
 To communicate our ideas with stakeholders
A business plan is a communication tool that we can use to secure investment

capital from financial institutions or lenders. We can also use it to convince
people to work for our enterprise, to secure credit from suppliers, and to
attract potential customers.
Part TWO: Read the case thoroughly and Answer the
Question that Follow
Case type: Industry Analysis
1. To understand the industry profitability and attractiveness

entrepreneurs need to undertake the Michael Porter’s Five forces
industry analysis. Accordingly, perform the textile industry
analysis mentioned above in view of the Five forces model.
 PORTER'S FIVE FORCES IN TEXTILE INDUSTRY
 The threat of new entrants
Companies have a recognized brand and a customer base. To achieve attract

and retain customers, new businesses would have to enter with strong and
more attractive products.
 The threat of substitutes products

o Products with short life cycles
o Products with a trend towards improved quality and price
o Products with high-profit margins
In fact, due to the internalization of production in low-cost countries marks

increasingly compete aggressively on price improving the quality of their
products
 Suppliers
Various suppliers of raw materials and input with a slight difference in

quality and price, so the industry doesn’t have the biggest problems in
negotiating with them.
 Buyers
If the buyers buy in large volumes of the company, they can get more
benefits.
 The intensity of the rivalry among competitors

o Economies of scale
o Consumers are always looking for the latest products with the best
value
o Strong internal rivalry in this sector
 Digitalization
o Processes taking technologies like cloud computing, big data, the
internet of things, the sensing and intelligent robotics
o A large number of new technologies
o Digitization has shown that is a key to growth in productivity
improvements, for use as an opportunity to create new markets factor
 Globalization
o The textile industry has developed internationally
o Multiple trade agreements
o Facilitate export and import
o More countries at a lower price
 Deregulation
o Legal responsibilities
o Create proper conditions for job security
o Effective security measures work long term
2. Based on the textile industry analysis, is the textile industry
attractive to enter? Provide your professional justification based on

the Five forces model you reviewed in Q#1 above.
 From the above analysis of the textile industry for me it is attractive to enter
because the business is international so we can get big customers, the buyers
know that if they get lager volume of our product they can get a benefit, there
are various suppliers of raw material, the industry is very digitilized this make
the work simple and if we can create more attractive styles we can get more
revenue, so it is very attractive to enter.

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Maryland International College

School of Graduate Studies

Name: Biruk Tesfa

January 16, 2021

1. Identify an exemplary entrepreneur in Ethiopia and discuss the

a) What kind of entrepreneur he/she is?

b) What entrepreneurial characteristics does he/she have?

She has a lot of entrepreneurial characteristics that are

I think in Ethiopia there is a big transportation problem students will late,

d) Is the entrepreneur innovative or creative? Please explain and

e) What do you think is the contribution of his/her venture?

She slove the transportation problem in Ethiopia but no all transportation

2. Why should an entrepreneur develop a business plan? Briefly

 Why should an entrepreneur develop a business plan?

Writing a well-thought-out and organized business plan dramatically

 The major components of a business plan

 Description of Management and Organization

 Breakdown of Your Products and Services

 Three tests that an entrepreneur needs to pass in order to obtain external

 Critical problems in marketing

 Recommendation for the commissionaire to resolve the problem

 Give training for the entrepreneurs about how to market

 Meaning of business plan in entrepreneurship

A business plan is a written document that describes in detail how a business

 Importance of business plan in entrepreneurship

 To raise money for our business

 To make sound decisions

As an entrepreneur, having a business plan helps you define and focus on

 To communicate our ideas with stakeholders

A business plan is a communication tool that we can use to secure investment

1. To understand the industry profitability and attractiveness

 PORTER'S FIVE FORCES IN TEXTILE INDUSTRY

 The threat of new entrants

Companies have a recognized brand and a customer base. To achieve attract

 The threat of substitutes products

In fact, due to the internalization of production in low-cost countries marks

Various suppliers of raw materials and input with a slight difference in

 The intensity of the rivalry among competitors

attractive to enter? Provide your professional justification based on

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