BBM 210/05

Entrepreneurship
Development

Tutor-Marked Assignment 1
(TMA 1 - 30%)

Submission Date:
06 September 2019 before 2400 hrs
Instructions:

1. As this is an individual assignment, you are advised not to share with others.

2. Please answer all the questions.

3. Please write all your answers in essay format. Do not answer in point-form unless
the questions mention “List” or “State”. It is not necessary to precede each answer
with an introduction and end with a summary. Proceed directly with the answer.

4. The total marks for TMA 1 is 100 and this contributes 30% towards the total
weightage of this course.

5. Do remember to submit online and by the deadline.

6. Students are highly encouraged to passage their TMAs to the Turnitin

system before submission, to encourage honest academic writing and it is
not mandatory except for Project courses".
Case Scenario: “Sand and Sea”.

“Sand and Sea’ is a home-based business owned by Verity and Bob Chugurgh, who
live in Auckland’s North Shore, New Zealand. Verity started up a home-based
business in 2006, when her two young children started school. Before Verity married
she had completed a Bachelor of Fine Arts degree. She had worked in a marketing
management role, and had travelled extensively throughout the Middle East, Europe
and Asia. While the kids were in pre-school, Verity developed her skills as a jeweler,
a craft that intrigued her at art school. She specialized in one of ‘art’ pieces and had
developed a reputation as a jeweler’s artist, known for her beautiful, unusual designs
with a natural New Zealand theme, using the materials of her local environment and
a New Zealand color palette.

With the kids off to school Verity started to earn a little money selling her high-end
pieces, some of which fetched NZ$600 per necklace. For the most part, she created
close copies of her award winning designs, which she retailed at about NZ$60. She
started off by selling to her friends and family, and soon work-of-mouth grew so that
she was making jewelers full time, and was making a small profit. Although Verity
enjoyed the autonomy of her money-making venture and being able to do something
she loved, she was getting bored with the laborious job of making each individual
piece of jewelers herself. However, she did not want to directly employ someone to
work for her as she did not have the workspace, and she wanted to be free from the
compliance burdens of being an employer and managing others.

At the beginning of 2008 Verity’s husband Bob lost his job. He had been working on
contract as a software developer, but the economic downturn that began in 2008
meant that his work had completely dried up. Verity and Bob decided to build the
jewelers business together, taking advantage of Bob’s software development skills to
more aggressively promote Verity’s designs and find a global customer base for her
jewelers.

Together Bob and Verity decided to re-think the entire business. They came up with
a list of workable ideas that they wished to implement. First, Verity decided to move
away from producing her own jewelers to focus only on design. Because Verity’s
work celebrated the natural New Zealand environment, the bush, the mountains and
the beach, they decided that their new venture needed to promote environmental
sustainability and be readily seen doing this. In addition, both Verity and Bob felt that
for the business to be truly a shared business, they needed to take advantage of
Bob’s skills and provide a complementary online experience and have excellent
customer service. These three issues are to be the core of their new strategy; artistic
integrity, environmental sustainability and a superlative and unique online customer
service experience.

Bob and Verity have decided to place five per cent of their profits into the Forest and
Bird Protection Society, which they believe is a popular and suitable charity
organisation that fits into their brand image. They will use a sustainable and
environmentally friendly theme in their brand image. In addition, both Verity and Bob
wish to retain complete control of the business by neither employing a manager nor
any other staff. They have decided to source most of their feature materials locally
and to source the rest cheaply from Asia. They will also work with small
manufacturing firm in China who would assemble Verity’s designs at a fraction of the
cost she could do so in New Zealand. One advantage of Verity and Bob’s home-
based business is that if is relatively in-expensive to run. They have an office in the
house, but conduct most of their face-to-face business over the internet using Skype.
Although either Bob or Verity will need to occasionally travel to Asia to find suitable
beads and materials, most of the natural materials can be sourced locally.

Verity will continue to enter artistic competitions and hold exhibits of her work,
including contributing to such events as the Wearable Arts Awards. Bob will develop
the site and provide all customer service contract, which he can do predominantly
through email. Bob has ideas about providing an educational area, teaching people
how to bead for themselves, a special online kid’s area for designing jewelers, using
recycled materials from the home and even an area where people could create their
own jewelers concepts. The aim of these ideas is to drive traffic to the site and build
the brand internationally.

Source: Adapted from Barringer, B.R, & Ireland, R.D., Entrepreneurship: Successfully Launching New
Ventures, Pearson, 2012, pp. 462-463.

Answer ALL questions.

1. Explain FOUR (4) advantages of a home-based business like “Sand and Sea”.
(20 marks)

2. How can Bob and Verity protect their business ideas from being “stolen” by larger
business?
(8 marks)

3. Do you think this business will succeed? Why and why not?

(12 marks)
Answer ANY THREE (3) questions.

1. a. Explain any FOUR (4) key elements of entrepreneurship.

(12 marks)

b. Identify the major changes that create opportunities to entrepreneurs.

(8 marks)

2. a. Identify any TWO (2) factors necessary for entrepreneurship to thrive in a

country.

(5 marks)

b. Examine THREE (3) critical stages in the process for new venture formation.

(15 marks)

3. a. What do creativity, innovation and entrepreneurship have in common?

(5 marks)

b. Explain THREE (3) key steps to screen entrepreneurial opportunity.

(15 marks)

END OF TMA1