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TOPIC 1
IDENTIFY CONCEPTS OF ENTREPRENEURSHIP
QUESTION 1
December 2023 Question 1
Which of the following factors distinguishes a “small business owner” from “an entrepreneur”?
- Small business owners are keen on innovation
- Small business owners undertake high risks
- Small business owners have a long-term vision
- D. Small business owners do not seek new opportunities (2 marks)
Suggested answer
Based on the options provided, the factor that most accurately distinguishes a small business owner from an entrepreneur is that small business owners do not seek new opportunities. Entrepreneurs are typically characterized by their proactive pursuit of new opportunities, whether through creating innovative products or services, entering new markets, or disrupting existing industries.
QUESTION 2
December 2023 Question 2
Which of the following elements makes up an entrepreneur’s micro-environment?
- Government
- Suppliers
- Technology
- Economy (2 marks)
Suggested answer
Suppliers are a crucial part of an entrepreneur’s micro-environment, as they play a direct role in the supply chain and can influence the availability and cost of resources needed for the business. While the other options (Government, Technology, Economy) are important, they are often considered part of the macro-environment, as they may have broader impacts that go beyond the immediate operations of the business.
QUESTION 3
December 2023 Question 8
Which of the following is a disadvantage of a sole proprietorship form of business?
- Limited liability
- Ease of formation
- Lack of continuity
- Business inflexibility (2 marks)
Suggested answer
The disadvantage of a sole proprietorship form of business is the lack of continuity. In a sole proprietorship, the business is tied to the individual owner, and if the owner retires, becomes incapacitated, or passes away, the business may cease to exist. Other forms of business structures, such as corporations, offer greater continuity as they can continue to exist despite changes in ownership or the departure of key individuals.
QUESTION 4
December 2023 Question 20
Select the function of an entrepreneur.
- Political opinion leader
- Person who bears risk
- A social mobiliser
- A business analyst (2 marks)
Suggested answer
The function of an entrepreneur, among the options provided, is primarily to bear risk. Entrepreneurs are individuals who take on the financial risk of starting and running a business. They invest their own capital, time, and effort into a business venture with the expectation of making a profit. Entrepreneurship involves identifying opportunities, taking calculated risks, and being willing to face uncertainties and challenges in the pursuit of business success.
QUESTION 5
December 2023 Question 34
Identify a factor that could push individuals to become entrepreneurs.
- Threat of unemployment
- Lack of human resources
- Unstable political climate
- High interest rates (2 marks)
Answer Narration
The threat of unemployment is a factor that could push individuals to become entrepreneurs. Facing the possibility of losing a job or experiencing job insecurity can motivate individuals to explore entrepreneurship as an alternative to traditional employment. Entrepreneurship allows individuals to create their own opportunities, be their own bosses, and potentially establish more control over their financial future. The fear of unemployment can be a driving force for some individuals to pursue entrepreneurial ventures.
QUESTION 6
December 2023 Question 39
Identify a way in which intrapreneurship could be achieved in an organisation.
- Undertaking incubation of business
- Encouraging creativity and innovation
- Preparation of an effective business plan
- Segmenting the market for goods and services (2 marks)
Answer Narration
Cultivating a culture that embraces creativity and innovation is the foundation for encouraging individuals to become intrapreneurs within an organization, ultimately leading to the development of new ventures and ideas that benefit the company.
QUESTION 7
August 2023 Question 1
Select a common characteristic of successful entrepreneurs.
- Problem solvers
- Indecisive
- Intolerant to failure
- Moderately motivated (2 marks)
Answer Narration
One common characteristic of successful entrepreneurs is their ability to solve problems effectively. This is an essential skill for any entrepreneur, as they often face numerous challenges and obstacles in their journey to build and grow a successful business.
QUESTION 8
August 2023 Question 3
Choose the statement that identifies entrepreneurs’ contribution to economic growth.
- Discussions and reports about the economy
- Widening the economic gap in the country
- Creating enterprises that increase wealth
- Registration of companies (2 marks)
Answer Narration
Entrepreneurs are responsible for creating new businesses and expanding existing ones. By doing so, they generate employment opportunities, increase the production capacity of the economy, and stimulate economic growth. The wealth generated through these enterprises contributes to the overall economic growth of a country.
QUESTION 9
August 2023 Question 9
Which of the following concepts allows large organisations to tap the innovative talents of their employees?
- Individual creativity
- Corporate entrepreneurship
- Staff development
- Entrepreneurial culture (2 marks)
Answer Narration
Entrepreneurial culture can be described as an environment where someone is motivated to innovate, create and take risks. In a business, an entrepreneurial culture means that employees are encouraged to brainstorm new ideas or products.
SAMPLE WORK
Complete copy of ATD ENTREPRENEURSHIP AND COMMUNICATION Revision Kit is available in SOFT copy (Reading using our MASOMO MSINGI PUBLISHERS APP) and in HARD copy
Phone: 0728 776 317
Email: info@masomomsingi.com
QUESTION 10
August 2023 Question 11
Select a situation where a sole proprietorship is regarded as a favorable form of ownership.
- Where the owner prefers autonomy in decision making
- Where promptness is not required in decision making
- Where personal attention is not an important business aspect
- Where the market is broad and requires large capital investment (2 marks)
Answer Narration
One major advantage of a sole proprietorship is the level of autonomy it provides to the owner. As the only owner, the individual has complete control over the business’s decisions without having to consult with other stakeholders. This can be particularly appealing to entrepreneurs who want to make decisions independently and quickly adapt to changing market conditions.
QUESTION 11
August 2023 Question 13
Which of the following challenges faced by entrepreneurs is related to poor infrastructure?
- Lack of capital
- High taxation
- Nearness to competitors
- Inaccessible markets (2 marks)
Answer Narration
Inaccessible markets is a major consequence of poor infrastructure. This can manifest in several ways:
- Limited transportation networks: Inadequate roads, bridges, or public transportation systems can impede the movement of goods and services, making it difficult to reach potential customers in different locations.
- Unreliable energy supply: Frequent power outages or lack of access to electricity can disrupt business operations and hinder production, limiting the ability to serve customers effectively.
- Deficient communication infrastructure: Poor internet connectivity or lack of access to essential communication services can isolate businesses and restrict their ability to connect with customers, suppliers, and partners.
QUESTION 12
August 2023 Question 23
Choose a statement from the following that describes the term ‘prewriting’ as a step in the writing process.
- Modifying and rearranging content
- Correcting grammatical mistakes
- Communicating to the audience
- Gathering and organising information (2 marks)
Answer Narration
Prewriting is a critical step in the writing process that involves gathering and organizing information before actually starting to write. It is a stage where writers brainstorm, plan, and prepare for their writing tasks. Prewriting helps writers generate ideas, clarify their thoughts, and create a solid foundation for their writing.
QUESTION 13
August 2023 Question 35
Which of the following is a contribution of small businesses to the economy?
- Enhance balanced regional development
- Discourage growth of large businesses
- Reduce exploitation of local resources
- Promote dependence on imported goods (2 marks)
Answer Narration
Small businesses are often more focused on their local communities, and they tend to source their goods and services from local suppliers. This localized approach helps create a more balanced regional development by supporting the local economy, providing jobs, and contributing to the overall prosperity of the area.
QUESTION 14
August 2023 Question 41
Identify the behaviour that discourages creativity.
- Listening actively to employees
- Being pessimistic, judgmental and critical
- Protecting honest mistakes when learning
- Treating employees as equals always (2 marks)
Answer Narration
A pessimistic, judgmental, or critical attitude can stifle creativity. When people are constantly judged or criticized for their ideas, they may become less likely to share their thoughts and suggestions. This can result in a lack of innovation and a stagnant work environment.
QUESTION 15
August 2023 Question 48
What term refers to beliefs and attitudes of individuals in a society that facilitate investment in business opportunities?
- Entrepreneurship
- Entrepreneurial culture
- Intrapreneurship
- Social customs (2 marks)
Answer Narration
Entrepreneurial culture refers to the beliefs and attitudes of individuals in a society that encourage and support entrepreneurship and business activities. It includes the social and cultural factors that create an environment conducive to the development of new business ventures and the acceptance of entrepreneurial behavior
QUESTION 16
April 2023 Question 3 (a)
Explain FIVE characteristics of imitative entrepreneurs. (5 marks)
Suggested answer
- Replication of Existing Models: Imitative entrepreneurship involves replicating existing business models, products, or services that have already demonstrated success in the market. Entrepreneurs closely analyze and emulate the strategies, processes, and approaches of established businesses. An example of replication can be seen in the franchise model, where entrepreneurs purchase the rights to replicate a successful business concept in a specific location. For instance, McDonald’s franchisees replicate the standardized business model and processes of the McDonald’s corporation.
- Market Validation: Imitative entrepreneurs rely on market validation, leveraging existing demand and customer bases. They enter markets where proven success already exists, reducing the risk associated with introducing entirely new and untested ideas. An example of market validation is seen in the rise of e-commerce platforms replicating the business model of Amazon. These platforms benefit from the validation of online retail’s profitability and customer acceptance.
- Incremental Improvements: While imitative entrepreneurship may not introduce radical innovations, it often involves incremental improvements or modifications to existing models or products. Entrepreneurs aim to differentiate themselves through refinements in processes, customer experience, or quality. A prime example is smartphone manufacturers. Many companies imitate the basic smartphone design pioneered by Apple but introduce incremental improvements in terms of camera technology, display quality, or software features.
- Reduced Risk: Compared to businesses built on radical inventions, imitation-based entrepreneurship has a lesser amount of risk. Entrepreneurs may tap into established consumer bases and market demand by following successful models, which lowers uncertainty and potential market resistance. One significant instance is the growth of ride-hailing services like Lyft, which copied the Uber business model. Since Uber’s success had already established the viability of on-demand transportation, these platforms could join the market with less risk.
- Market Competition: Imitative entrepreneurship can lead to increased competition within markets as multiple entrepreneurs or businesses replicate successful models. This competition can drive efficiency, price competition, and innovation in customer experience. A well-known example is the smartphone market, where various manufacturers imitate and compete with each other, resulting in continuous improvements, diverse product offerings, and competitive pricing.
- Adaptation to Local Context: Successful business ideas or products are frequently modified by imitators to fit local conditions or target niche markets. They are aware of how crucial it is to comprehend local preferences, cultural quirks, and customer behavior. As an example, fast food restaurants like McDonald’s and KFC have effectively modified their menus and marketing approaches to suit local preferences in several nations. They imitate the basic business strategy while making the required modifications to appeal to local customers.
- Speed to Market: Imitative entrepreneurship allows entrepreneurs to enter the market relatively quickly compared to ventures based on radical innovation. By leveraging existing business models or products, entrepreneurs can reduce the time required for research and development. A notable example is the proliferation of online food delivery platforms imitating the model pioneered by companies like Grubhub and Uber Eats. These imitators quickly entered the market, leveraging the existing infrastructure and demand for convenient food delivery services.
- Cost Efficiency: Imitative entrepreneurship often benefits from cost efficiency by replicating existing processes and strategies. By imitating successful models, entrepreneurs can avoid costly trial and error and leverage economies of scale. For instance, discount airlines such as Ryanair imitated the low-cost business model of Southwest Airlines in the United States. By adopting a no-frills approach, they were able to offer affordable air travel, keeping operating costs low and appealing to budget-conscious travellers.
- Identification of Market Gaps: Imitative entrepreneurs keenly observe existing models and identify gaps or areas for improvement. They analyze the strengths and weaknesses of established businesses and seek to fill underserved niches. An example can be seen in the emergence of niche subscription box services. While imitating the subscription-based business model popularized by companies like Birchbox, entrepreneurs identified specific market gaps and created subscription boxes tailored to specific interests, such as beauty products for men or specialty snacks.
- Learning from Mistakes: Imitative entrepreneurs can learn from the successes and failures of established businesses. They observe the market response, customer feedback, and industry trends to make informed decisions. By learning from the mistakes and challenges faced by original ventures, imitative entrepreneurs can make strategic adjustments. An example is seen in the electric vehicle market, where Tesla’s success and challenges have provided valuable insights for imitators who aim to refine their offerings and overcome similar obstacles.
