BUSN3003 Exam – Session 2, 2021

BUSN3003 Exam – Session 2

BUSN3003 Exam – Session 2, 2021

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Section A. (30 marks in total)

Answer THREE of the following four questions in Section A (10 marks each).

Question 1 (10 marks)

What are some of the critical risk’s entrepreneurs should consider before going global?

Question 2 (10 marks)

What are the different sources of financial capital available to entrepreneurs? Discuss the advantages and disadvantages of each.

Question 3 (10 marks)

Why is strategic planning important for entrepreneurs?

Question 4 (10 marks)

What is lean marketing, and why is it essential for today’s entrepreneurs?

Section B. (10 marks in total)

Answer ALL of the following questions. The questions are related to the following short case.

The King family started growing hops (an essential ingredient for brewing beer) in the late 1990s on their farm in central Victoria. The Kings grow several hop varieties and produce on average 1600 tons of hops per year. They also develop their own varieties.   The most popular being ‘The Kings Own,’ which is sought after by homebrewers due to its low price ($70 per kilogram), being organically grown and containing excellent fruit and berry flavours. King Family Farms successfully supply their hops directly to a network of brewing supply companies across Australia and South-East Asia. In 2015, the family’s youngest daughter Eroica started a micro-brewery on the farm after purchasing a second-hand 2000-litre brewing and packaging system for $32,000 through a personal loan from her parents. Eroica spent two years perfecting her uniquely crafted beer called ‘King Eroica’ using the family’s popular hop variety. She now supplies several local bars, restaurants, and retailers through her excellent marketing skills and the brew’s popularity. In 2020 she produced and sold 15,000 litres of beer, grossing $133,000 in revenue. To date, Eroica (a sole proprietor) has financed continuing operations using her own money and support from the family, including a farm shed to brew the beer and, of course, the precious hops. In February 2021, Eroica started supplying to a chain of Victorian bottle shops and, by July 2021, had already surpassed last year’s sales. However, the business has reached a critical point. Her brewing system is not large enough to keep pace with demand. She is working long hours and has two part-time, casual staff supporting operations. To take advantage of her success, Eroica has some decisions to make.

Question 5 (5 marks)

Assume that you are a successful entrepreneur and family friend. Eroica has approached you to get some advice about what she would need to do to expand her business. Identify at least three recommendations you would make to Eroica to grow her business. Explain your reasoning for each of these recommendations (bullet point answers are not acceptable).

Question 6 (5 marks)

Eroica’s venture has been successful because of support from her parents. If she was to expand her operations, what potential arrangements might Eroica put in place with her parents’ company – King Valley Farms. Discuss at least three potential arrangements Eroica might make with her parents. Explain your reasoning in full (bullet point answers are not acceptable).

END OF EXAM

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