Final ENT600

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sk3let0nz 2012

OCT 2009 QUESTION 1 a) Define Define technology technology entrepreneurship and entrepreneurial process.

(6 marks)

Technology entrepreneurship can be defined as a form of entrepreneurship and business leadership focused on identifying high-potential, technology-intensive business opportunity for possible exploitation into new products, processes or services The entrepreneurial process in general encompasses all the cognitive (thinking) and behavioral (action) steps from the initial emergence of a rough business idea until the creation of a new business venture or the process is terminated.

b) Explain the three (3) phases of the entrepreneurial process. process. Illustrate using a diagram. (14 marks) Figure 1 shows the entrepreneurial process with examples of activities at each stage

The entrepreneurial process is generally composed of three key phases Phase 1: The idea generation or idea discovery phase Individual or group enter this phase by either  ± Actively searching for business possibilities that the can offer in a better, more cre ative or efficient form. ± Discovering a solution for their own problem experienced at work, play or in the marketplace that has the potential of being shared with others who are willing to pay for the solution. ± In Technology entrepreneurship, this idea formation or discovery phase may be recognizable by the fact that the business idea or problem solution involves creating a new technology or adapting an existing technology.

evaluation and development phase Phase2: The idea evaluation This phase is characterized by efforts to better understand what it will take to bring the idea or opportunity into  a full-fledge economic activity or business ± In technology entrepreneurship, some key activities at this stage include  doing the research and development work to invent or innovate a new technology-based product, process or service  preparing the initial technology blueprint  concept testing  prototyping, market testing  Phase 3: The idea exploitation phase b usiness opportunity or not  This phase is generally characterized characterized by the decision to pursue the business  The decision at this phase can take three basic forms: ± proceed to exploit the opportunity ± abandon the current idea and go back to search for other ideas ± terminate the process totally and not pursue any other business ideas

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ENT600

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sk3let0nz 2012

QUESTION 2 Creativity should be encouraged among team members or within an enterprise. One of the resources of a creative enterprise is motivation towards action. a) Identify five (5) other resources of a creative enterprise. (10 marks) 1.

Knowledge in the required domain and fields

I.e. in-depth knowledge of your i ndustry. Intellectual abilities to recognize connections, redefine problems, and envision and analyze possible practical ideas and solutions. Inventive thinking about the problem in novel ways Motivation towards action Opportunity-oriented personality and openness openness to change. Contextual understanding that supports creativity and mitigates risks. o

2. 3. 4. 5. 6.

c reativity ty process. (10 marks) b) Describe the four (4) phases of creativi marks) Phase 1: Background or Knowledge Accumulation Study the background of the subject matter This may requires extensive reading, discussion with experts, practitioners, academicians, academicians, researchers in the field, attending workshops and seminars, exploring various unrelated areas etc. These explorations expose entrepreneurs to a variety of perspectives on the subject matter.  



Phase 2: The Mind Incubation Process An individual immerse himself or herself in the data, allowing the subconscious mind to muse or ponder on the information gathered. Sleep on it getting away from the subject matter and letting the subconscious mind working on it allows creativity to spring forth. Incubation can be induced by: engaging in mindless activities such as painting the house or cutting grass, meditate or play sports or board games. The rationale is new ideas often emerge when we are busy doing something unrelated to the matter. 



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Phase 3: The Idea Experience This is when the person discovers the solution or the idea. The idea may appear out of the blue or it may come incrementally. At this phase, the person begins to formulate the solution. Most of the time it is difficult to tell the movement from phase 2 to phase 3. To expedite movement to idea experience a person can try to daydream and fantasies about the project and always keep a notebook to record emergence of ideas at odd hours. 

  

Phase 4: Evaluation and Implementation This phase is the most difficult and requires courage, discipline & perseverance. There are a lot of possibilities of failures. Ideas are modified and tested before the best workable idea is put into a final form and successfully implemented.   









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sk3let0nz 2012

QUESTION 3 Majid is very excited when his colleagues praised him on his new discovery about the remedial potential of betel leaves (daun sireh). He has big plans about commercializing his formula. However, after talking to several knowledgeable individuals he realized that he needs to do a feasibility study before he proceeds further with his business idea. a) Explain to Majid five (5) reasons why he would need to carry out a feasibility study. (10 marks) 1. Provide a thorough examination of all issues and assessment of probability of business success 2.

Give focus to the project and outline alternatives

3.

Narrow business alternatives

4.

Surface new opportunities through the investigative process

5.

Identify reasons NOT to proceed

6.

Provide quality information for decision making

b) Highlight five (5) preliminary questions that Majid needs to address in order to evaluate the proposed business idea. (10 marks) marks) 1. Is there a demand for the product? 2.

Who else are producing similar products?

3.

What is needed to make the product?

4.

What are the equipment and technology needs for the proposed venture?

5.

Who will manage the business?

6.

What managerial requirements are needed?

7.

What is the cost of producing the product?

8.

What is the likely profit?









ENT600

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sk3let0nz 2012

QUESTION 4 In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product or service to market. a) Discuss the importance of NPD in terms of the survival of a business (10 marks) For Survival o Introduction of new product provides a platform for the company to compete o Companies that are able to develop and introduce new and improved products will have a distinct advantage to compete o Competition has become more intense as technological products become more complex and the technological product life-cycle getting shorter Companies face threat of losing market share when competitors come up with their new products o o Thus company have to come up with new products to ensure survival Strategy for growth o Development of new products can ensure business to grow by: o Introducing new products to existing markets o Introducing new products to new markets

b) Illustrate the typical stages of NPD process for technology ventures. (6 marks)

c) Briefly explain the purpose of carrying out test marketing in NPD process. (4 marks) o

Test marketing is usually carried out prior to a full-scale launching of a new product. In test marketing, the new developed product will be introduced to a representative sample of population to assess the markets reaction o The purpose of carrying out test marketing is to predict sales and profits from a major product launch









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sk3let0nz 2012

QUESTION 5 The intellectual creations and its inherent value can be protected from being exploited by other parties through intellectual property protection. a) Identify five (5) types of intellectual property rights. (5 marks) There are five types of IP rights which provide protection for inventions or creations against infringement by others 1. Patent 2. Copyright 3. Trademark 4. Industrial design 5. Trade secret b) List five (5) intellectual creations that are protected by copyright. Support your answer with relevant examples. (10 marks) 1.

2. 3. 4.

5. 6. 7. 8.

Literary works o e.g. novels, instruction manuals, computer programs, song lyrics, newspaper articles and some types of database Dramatic works o e.g. theatre presentation and stage plays Musical works o e.g. composition Artistic works o e.g. paintings, engravings, photographs, sculptures, collages, architecture, technical drawings, diagrams, maps and logos Layouts or typographical typographical arrangements o e.g. used to publish a work for a book Recordings o e.g. jingles, sounds and films Broadcasts o e.g. documentary, live coverage of events Derivative works o e.g. producing Harry Potter movie series from the novel of the same name

c) List five (5) legal rights of copyright owners. (5 marks) Generally, owners of copyright works have the exclusive rights to control: o The reproduction of the works in any form (including photocopying, recording etc) o The performing, showing or playing to the public o The communication to the public o The distribution of copies to the public by sale or other transfer of ownership o The commercial rental to the public.









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sk3let0nz 2012

QUESTION 6 a) There are several reasons why a researcher may decide to sell his research and development output before applying for patent rights. Identify four (4) of these reasons. (8 marks) The researcher may decide to sell the R&D output before applying for patent rights due to ant of the following reasons. o Cost to secure a patent right is higher than the product potential value. o The new technology-based product is competing with a promising substitute product o The developed technology is already mature and facing substitution stage High market development cost required because market is not yet ready for the product o o To avoid the hassles associated with patent application

b) Identify six (6) factors that are important in determining the monetary value of a patent. (12 marks) Factor that are of importance in determining the monetary value of a patent : 1. The size of the potential market 2. The value of comparable patents 3. Validity of the patent (the risk of the promoted patent to be invalid if the inventor does not meet the statutory requirement for obtaining the patent. o Example: a. They were not the inventors b. Had published the i nformation nformation about the invention c. Had offered the invention for sale before the date of application 4. Determine if the patent over laps with other patents, the higher the probability that a patent may overlap with another, the lower the value of the particular patent 5. Assess how much it costs for someone to use the next best patent instead of buying or subscribing license of your patent











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sk3let0nz 2012

QUESTION 7 a) List three (3) categories of financial resources. (6 marks) o o o o o

Self, Relatives and Friends

Angel Financing Governments Financial Assistance Resources from external investors Banking and Development Financial Institutions (DFIs)

b) What is pre-seed financing? (5 marks) A relatively small amount of capital is provided to an inventor or entrepreneur to prove a specific concept for a potentially profitable business opportunity that still has to be developed and proven. The funded work may involve product development (as opposed to "pure" research), but it rarely involves initial marketing.

c)

Identify and describe three (3) sources of pre-seed financing. (9 marks)

Self, Relatives and Friends  During the early stage of business development, the entrepreneurs access to established sources of external finance is limited; hence, most entrepreneurs rely on their own resources, supplemented by funds from relatives and friends. The entrepreneurs own resources include not only their personal savings and assets, but also their debt  capacities in obtaining limited amounts of external finance. Angel Financing For a new venture based on concepts that require lengthy development efforts, the earliest source of outside  financing can be provided directly by private investors (wealthy individuals).  The so-called angels, or business angels, tend to behave like business partners. They bring with them experience, knowledge and capital to the business. Governments Governments Financial Assistance Assistance  Governments financial assistance to technology-based companies can be classified into two g roups: government funding schemes and grants.  Most funding schemes and grants for technology venture are channeled through MAVCAP, MDeC, MTDC, MOSTI, SME Corp.









ENT600

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sk3let0nz 2012

APR 2010 QUESTION 1 Creative ideas often arise when creative people observe established solutions, practices or products and think of something new or different. a) Define creativity. (2 marks) Creativity can be defined as the production of new and useful ideas as well as the ability to discover new ways of looking at problems and opportunities. b) List five (5) examples of areas where the concept of "new" can be created. (5 marks) marks ) Creating the new y Knowledge y Products y Processes y Service y Market y Business models y Raw materials c) List three (3) resources of creativity techniques. (3 marks) 1. Problem reversal y Look at the opposite of things, see things inside out, backwards or upside down 2. Force analogy y Gain new insights by forcing a relationship between almost anything 3. Attribute listing y Break down the thing into smaller parts or characteristics and develop ideas to improve on them. 4. Mind Mapping y Start in the center of the page with the main idea, and works outward in all directions, producing a growing and organized structure composed of key words and key images. 5. Brainstorming y Generating ideas based on the principle of suspending judgments. 6. Lateral Thinking y Exploring multiple possibilities and approaches from different perspective rather than pursuing in a conventional, logical, step by step single approach. o E.g., by changing concepts and perceptions, and generating new ones.









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sk3let0nz 2012

Source of innovation within the

1. 2.

3.

social environment Demographic changes y For example changes in population, consumer preference and geographical locations. Perceptual changes y Perceptions can be cause mood swings and major changes in ideas, for example fitness craze is resulted by perceived needs to be healthy & physical fit New knowledge y The basis of development of something brand new

QUESTION 2 Briefly explain the following sources of financing: a) Angel Financing (5 marks) For a new venture based on concepts that require lengthy development efforts, the earliest source of outside financing can be provided directly by private investors (wealthy individuals). individuals). The so-called angels, or business angels, tend to behave like business partners. They bring with them experience, knowledge and capital to the business. b) Venture Capital financing (5 marks) Venture capital financing has tremendous potential in Malaysia to contribute to the growth of technology and knowledge based ventures. The formal venture capital industry in Malaysia began in 1984 with the establishment of Malaysia ventures berhad. In terms of the stages of financing, most investment made by Malaysian Venture Capital Companies (VCCs) have been in the growth/expansion stage. Investments in the seed and start-upstages are less than 10% of total investments. investments. c) Equity financing (5 marks) Equity financing involves the sales of some of the ownership in the venture. Equity financing forces the entrepreneur to relinquish some degree of control e)

Debt Financing (5 marks)

Debt financing involves a payback of funds plus an interest. Debts place a burden of repayment and interest on the entrepreneurs.









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sk3let0nz 2012

b) Identify four (4) main components of a feasibility study. Discuss any two (2) of the components. (14 marks) y

Market Feasibility Study o An assessment of overall appeal of the market for the product or service being proposed. Aspects of market feasibility study that should be carried out include: Product/service Customers  determining who are the customers the business wishes to serve Market demand  refer to the potential purchase that is expected from the target market. Normally it is expressed in units or ringgit. Competitors  identify who are the major competitors/ number of competitors in the market Market share- refers to the portion of market that the business can control after taking into consideration market demand and the competitors position in the same market.   

 

y

Technical Feasibility Study o Concerned with determining whether the business has the necessary technology and equipment to produce the intended product/service/ Aspects of technical feasibility study that should be carried out include: Technology and Equipment  identify the types of equipment required. Materials  identify the types quantity and quality of raw materials required Manpower  identify the technical workers required in producing the product/service Location  refer to the place where the proposed business or project is likely to be set up.    

y

Organisational Feasibility Study o Concerned with determining whether the business has to the necessary and sufficient human resource to bring a particular product. Service idea to market successfully. Aspects of organizational feasibility study that should be carried out include: Organization Organization structure  identifies responsibilities for each job position and the relationship among those positions. Management team  refers to a group of individuals responsible to bring a product/service idea to market successfully Compensation  refers to the monetary and non-monetary rewards in various form of pay which include salary, wages, sales commission, allowances, bonus, EPF and SOCSO contributions Supporting services  refers to the assistance and service given by private agencies and government. 

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ENT600

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sk3let0nz 2012

QUESTION 4 Assumed you have devised a new kind of equipment which has potentially important healthcare applications and you are thinking of commercializing the invention. You plan to acquire funding from the Multimedia Development Corporation (MDeC) for building a prototype and eventually to commercialize commercialize the invention. Briefly discuss the outline of a technologybased business idea blueprint that you would prepare in order to convince MDeC. (20 marks)

QUESTION 5 a) A new product is the outcome of a product development process. Describe what can theoretically be considered as a new product. (2 marks) Any product perceived to be new in the mind of the consumers. b) Discuss two (2) main classifications of new products and support your answers using relevant examples. (18 marks) Two classifications of new products: y Completely New Product y Improvements on existing products. Completely new product y

y

New-to-the world products o The first of its kind (new i nventions) o Create new market New to the firm (new product lines) o New to the company but not new to the market.

Improvements on existing products Addition to existing lines Subsets to the new product lines o o Perhaps targeted to different market segments Improvements and revisions to existing products o New products to replace existing products with cosmetic and functional enhancements. enhancements. Cost reductions o Offer no new benefits to the consumer other than possibly reduced price Provided enormous added-value to the firm (financial rewards too) y

y

y











ENT600

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sk3let0nz 2012

QUESTION 6 a) Identify and explain four (4) criteria that must be satisfied in order for an invention to be patented. (8 marks) For an invention to be patented, it must satisfy the following criteria: 1.

Functional/Technical y The invention must relate to how something works, what it does what it is made of, or how it is made

2.

New y

The invention has not been publicly disclosed in any form, anywhere in the world

3.

Involve an inventive action y The invention that could not be figured out by a person with average knowledge of the technical field

4.

Industrially applicable applicable y The invention must be capable of being made or used in an industry (it can be mass produced).

b) State six (6) characteristics of information that can be classified as trade secrets. (12 marks) 1. 2. 3. 4. 5. 6. 7.

Not Known outside the company Known only inside the company on a need-to-know basis Safeguarded by stringent efforts to keep the information confidential Valuable and provides the company a compelling competitive advantage Developed at great cost, time and effort Cannot be easily duplicated, reverse engineered or discovered Can last longer that the term of a patent









ENT600

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sk3let0nz 2012

QUESTION 7 a) i) Explain what is meant by commercialization of R&D. (2 marks) Refers to efforts taken to introduce new technology based product to the market with the aim of gaining commercial return ii) Identify two most common approaches through which research findings could be brought to the market. (3 marks) 1.

2.

Disseminating innovation freely through academic publication such as journals and proceedings of research conference. Allowing the researcher (innovator) to monopolize the benefits of research and development in the form of intellectual properties (ip) and commercialization of the IP

b) To commercialize a technology, an innovator may decide to spin off or spin out into a new venture. Explain and differentiate both options. (10 marks) spin off Alternative to licensing and assignation, an innovator may choose to commercialize his invention through the creation of a new technology-based venture. venture. In this context the innovator assumes the role of a technopreneur by creating a new venture from within an

spin out Besides venturing from within the established R&D institutions, universities or established business organizations the innovators may also have the option to leave the parent organization and established an independent new venture to commercialize the patent he owned. In this context the innovator assumes the role of a









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sk3let0nz 2012

OCT2010

QUESTION 1 a) Explain the difference between creativity creativity and innovation. (6 marks) Creativity  Defined as the production of new and useful ideas as well as the ability to discover new ways of looking at problems and opportunities.

Innovation y is the ability to apply creative solutions to problems and opportunities to enhance or to enrich peoples lives

b) Describe four (4) differences between incremental innovation and r adical innovation.(8 marks) Incremental Innovation y Steady improvements y Based on sustaining technologies y Obedience to cultural routines and norms y Can be rapidly implemented y Immediate gains y Develop customer loyalty

Radical Innovation y Fundamental rethink y Based on disruptive technologies y Experimentation and play/make-believe play/make-believe y Need to be nurtured for long periods y Worse initial performance potential big gains y Create new markets.

c) Besides invention, describe and give examples of another three (3) types of i nnovation. (6 marks)









ENT600

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sk3let0nz 2012

QUESTION 2 a) What are "entrepreneurial opportunities"? Briefly describe four (4) characteristics of an attractive entrepreneurial opportunity. (10 marks) Entrepreneurial Entrepreneurial opportunities are defined as situations in which new products, services and processes can be introduced and sold at greater than the cost of production. Characteristics

1.

of an Attractive Opportunity Timely a current need, unmet demand or problem   e.g. vaccine for bird flu, drugs to prevent obesity

2.

Solvable a problem that can be solved in the near future with accessible resources   e.g. a cure for cancerous diseases, a more efficient public transport to reduce congestion and traffic jams

3.

Important  The customer deems their problem or need important to them e.g. energy-saving air conditioner or petrol saving devices that wor k 

4.

Profitable  the customer will pay for the solution and allow the enterprise to profit e.g. security products, multi-function printers 

5.

Context

 

a favorable regulatory and industry situation e.g. on-line business transaction , genuine i nvestment schemes that promised high returns









ENT600

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sk3let0nz 2012

QUESTION 3 Technopreneurs are advised to prepare a technology-based technology-based business idea blueprint prior to the exploitation of opportunity. a) What is a technology-based business idea blueprint? (4 marks)  A technology-based business idea blueprint is a detailed written document that describes what a new product wants to accomplish.  It is a detailed road map for converting ideas and vision into real, functioning, profitable and viable product. b) Inovatif Group Sdn Bhd has created a multi-purpose key chain that combines a key chain, a bottle opener, a corkscrew and a miniature scissors. Since this is a new product in the market, the company needs to prepare a business idea blueprint for the product. Define and briefly explain the important components in the marketing strategy section of the blueprint. (16 marks) The sections discussed under market analysis include: 1. Customers o Discus who the customers for the product or service are or will be. Potential customers need to be classified by relatively homogeneous groups having common, identifiable characteristics. characteristics. E.g., by major market segment. o Show who and where the major purchasers for the product or service are i n the market segment. Include national regions and foreign countries, as appropriate. appropriate. easily reached and receptive, how customers buy o Indicate whether customers are E.g., wholesale, through manufactures representative, etc. 



2.

Market size and trends Show the size of the current total market and the share you will have, by market segment, and/or o region, and/or country for the product or service tour will offer, in units, ringgit, and potential profitability.











ENT600

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sk3let0nz 2012

The pricing of product is the fee that will be charged to the customer. Price is a function of your costs, competition and customers. Price can be determined by considering o The cost of producing the product o The competitors price o The value of the product based on how people perceive the product in many situations.

Place (distribution) y appropriate e distribution channel, the determination of the degree of Selection of the appropriat market coverage, and the selection of the best modes of transportation Promotion y Describe the approaches the company will use to bring its product or service to the attention of prospective buyers and persuade them to buy the product or service.

Poor strategies regarding even one of the 4Ps can lead to business failure









ENT600

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sk3let0nz 2012

QUESTION 4 A "new" product may refer either to a completely new product, or improvements on existing products. a) Discuss four (4) ways in which firms may to improve on existing products. (12 marks)



 



Addition to existing lines ± Subsets to the new product lines ± Perhaps targeted to different market segments Improvements and revisions to existing products ± New products to replace existing products with cosmetic and functional enhancements enhancements Cost reductions ± Offer no new benefits to the consumer other than possibly reduced price ± Provides enormous added-value to the firm (financial rewards too) Repositioning ± New applications to existing products ± More to do with consumer perception rather than technical development









ENT600

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sk3let0nz 2012

The technology improvement period. y The technology improvement period is characterized by rapid and sustained growth y also known as the growth stage The mature technology period or m aturity stage. y Starts when the upper limit of the technology is approached and progress in performance slows down. y This occurs when the technology reaches its natural limit.

b) Over time technology will experience six phases of market life-cycle. List the six (6) phases of the Technology Market Life-cycle. (12 marks)

1. Technology development phase









ENT600

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sk3let0nz 2012

QUESTION 6 a) Explain why funds for technology ventures are raised in stages. (4 marks) Staging

of financing allows investors to deal with the uncertainty of the validity of the idea and the untested nature of the management in the company b) Financing for technology ventures are typically tied to stages of business development. Identify the four (4) stages and discuss the types of financing that are common at each stage of business development. (16 marks)









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sk3let0nz 2012

QUESTION 7 a) A technopreneur may not easily end a business venture due to certain exit barriers. List four (4) exit barriers. (4 marks) 1. Retrenchment 2. Divestment 3. Liquidation 4. Harvesting

b) Ending a business venture may re quire technopreneurs to adopt retrenchment and/or divestment strategies. Discuss marks) both strategies and the conditions under which these strategies are best used. (16 marks) 1.

Retrenchment Retrenchment occurs when a business regroups by reducing cost and asset to reverse declining sales y

and profits. Retrenchment include activities such as: o

Selling off assets to raise needed cash

o

Pruning product line

o

Closing down businesses that are performing poorly

o

Reducing the number of employees

Final ENT600

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