Question

a. Briefly discuss any four principles that Entrepreneurs adopt in creating their own Good Luck.

b. Define demand and supply and evaluate their four implications regarding price.

c. ‘To make choices we have to answer three fundamental questions’. Briefly discuss.

d. With examples, differentiate between industrial and commercial business.

e. Discuss any six functions of a business model.

Answer 1

a) Four principles are -Bird in hand principle ie start with the means.They work from competence ,expertise and they target opportunities according to the market size or expected returns . Next is Affordable loss principle ie focusing on the risk.Entrepreneurs are risk takers and they choose actions in order to learn about their business opportunities . They adapt on the basis of what they learn.Another is Patch work quilt principle ie form partnership.Entrepreneurs face a number of problems while trying to bring innovative solution to the market.Expert entrepreneurs find people who share their vision . This might also involve partnership with organizations.Last is Pilot in the plane principle iecontrol the future.Entrepreneurs have faith in their ability to control future.

b) Demand refers to the desire to purchase a commodity backed by willingness to pay and ability to pay.Supply is the amount of resources that producers are willing and able to provide to the market place.The implications of demand and supply regarding price are -when supply exceeds demand for a good prices fall, when demand exceeds supply prices rise,if there is increase in supply but demand remains unchanged prices tend to fall,if there is a decrease in supply and demand remains unchangedprices tend to rise.

c) The 3 questions are what goods and services should be produced,how will the goods and services be produced and who will receive the  goods and services produced.

d)'Industrial' refers to any business dealing with manufactured goods while 'Commercial' refers to any business which is done with the main goal of gaining profit.Egs of Commercial business are hotels, motels departmental stores etc.Eg of industrial business is construction of factories.

e)6 functions of business model are -Articulating the value proposition ie the value that is created for users by offering. Next is identifying the business segments ie identification of users to whom the offering is useful. Next determining the structure of the value chain that the firm requires to create and distribute the offering.Next specifying the revenue generation mechanism for the firm and estimating the structure of cost and profit potential of producing the offering. Next Within the value network .describing the position of the firm and forming link between suppliers and customers,and lastly formulating the competitive strategy..