Question

Provide detailed and comprehensive information to support your answer. Where applicable, use examples to support your answers.

1. Describe three potential rewards of becoming an entrepreneur that appeal to you.

2. Explain 3 reasons why a start-up organization would have a written business plan.

3. Why is it a good idea to figure out your Economics of One Unit?

4. Explain why marketing is considered the business function that should drive all a business's decisions.

5. Analyze the buying process that leads customers to your product or service.

Answer 1

1. The three potential rewards of becoming an entrepreneur that appeal to me are :

a. Higher returns on investments – I strongly believe that becoming an entrepreneur would yield higher returns on investments. For example, if in my venture I am able to make more profits than just working for a company, then it is a potential reward for me to be motivated for sustainability in entrepreneurship.

b. Greater control on the operations- Becoming an entrepreneur would enable me to have freedom of judgment and greater control on the entire operations of the business. Entrepreneurship would enable me to have greater control over my business operations thus enabling me to have freedom on judgment in business decisions unlike a regular job.

c. Sense of achievement- I am always passionate about the sense of achievement and job satisfaction that I receive through entrepreneurship. I am passionate about achieving more in my life and entrepreneurship provides me a sense of achievement. Once the goals are achieved, I would set a higher goal to achieve in my endeavor of entrepreneurship.

2. Writing a business plan is essential for a start-up business because it helps the entrepreneurs to assess if the new start-up was successful in the competitive environment. A clear step-by-step needs to be mapped in the business plan for start-ups for effective business development. A comprehensive analysis of the market enables an entrepreneur to draft strategies accordingly to adapt to the intensively competitive market. This also helps the entrepreneurs to understand the competition in the industry. Finally, the funds required for the operations and source of funding detailed in the business plan helps the start-up to function without any interferences. Thus, a good written business plan helps entrepreneurs to have clear-cut goals through their vision and mission statements.

3. Economics of One Unit (EOU) is the method that helps the entrepreneurs to assess if a particular business model is profitable by calculating the different units. If one single unit of the product or service yields profit, then the business model is successful and profitable. For example, if Sam is selling pizza in his store, then he needs to calculate the price of one pizza to assess if he is profitable. If his selling price yields him profit, then the business is profitable. This assessment enables him to determine if Sam can continue the same business model or change it.

4. Marketing is the business function that should drive all business’ decisions because it the process of identifying customers and assessing the needs to define the product or service portfolio that the business desires to sell. It is only through marketing that potential customers are identified and the competitor analysis is made to understand the competitiveness in the business. It opens door to possible opportunities in the business environment. Since marketing helps to address all aspects of increasing the customer base (and retaining existing customers), it is important that businesses has effective marketing plan for long-term sustainability in the industry.

5. Customer buying process or the buying decision process involves 5 steps, namely-

a. Problem identification/Need recognition- The first step in the buying decision process is identifying the problem or the needs of the customers. The need might be based on internal triggers such as hunger or external stimuli such as advertisements.

b. Information search – Once the customer’s identifies the problem and determines his/her needs, the next step is searching for relevant information about the product or service. The sources of information search are social media, print or visual information.

c. Evaluation of alternatives- Once the customer has obtained all the information, the customer evaluates the alternative options to select the product or service that meets the best of the requirements.

d. Purchase decision- This is the stage that the customer decides to buy the product. However, it might be interrupted due to two factors, namely- negative feedback from customers (negative word of mouth) and the level of motivation that the potential has to accept the feedback. If the potential customer has least motivation level, then a small trigger on the negative feedback might interrupt the customer’s buying decision.

e. Post-purchase behavior- Once the customer has purchased the product, the customer compares his/her experience with their already set expectations. This would provide them to be satisfied or unsatisfied. Satisfied customers would make them to be loyal to the brand or product. Unsatisfied customers would provide negative feedback through word of mouth.

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