N1589 INTRODUCTION TO ENTREPRENEURSHIP
THE UNIVERSITY OF SUSSEX
BSc EXAMINATION 2020/21
N1589 INTRODUCTION TO ENTREPRENEURSHIP
Assessment Period: January 2021 (A1)
Duration: 24 hour Take Away Paper
Candidates must attempt ALL questions from each section
Supporting material: Cases in Appendix A and Appendix B (on pages 3-5 of this paper)
Attempt BOTH questions in this section
- Critically discuss Kirzner (Opportunity Approach) and Schumpeter’s (Creation Approach) perspectives to entrepreneurship. Compare their respective views on entrepreneurs and opportunity. Discuss the differences between the two approaches. Use examples if necessary. (Your answer is expected to be around 500 words).
- Define crowdfunding and explain crowdfunding campaigning types. Critically discuss the significance of crowdfunding in entrepreneurs’ bootstrapping strategy and explain what you would consider to be the pros and cons of crowdfunding vis-à-vis debt and equity financing. Use examples if necessary. (Your answer is expected to be around 500 words).
Read the case “Multiple Myeloma Research Foundation” in Appendix A (on page 3-4) and answer the following question
- Critically discuss how entrepreneurial opportunities are identified. Explain how Kathy Giusti came to realise this opportunity and what steps she took to exploit it. Consult https://themmrf.org/ for more information and support your answer with examples if necessary. (Your answer is expected to be around 250 words).
Read the case “Phanindra Sama – redBus” in Appendix B (on page 4-5) and answer the following question
- Critically discuss the significance of external environment context in entrepreneurial process. Analyse Phanindra Sama’s decision to enter into online transportation services industry in terms of attractiveness of the industry. Highlight and discuss the impact of demographic and technologic factors on Phanindra’s decision. Consult https://www.redbus.in/ for more information and support your answer with examples if necessary. (Your answer is expected to be around 250 words).
Read this case to answer question 3
Case: Multiple Myeloma Research Foundation
Kathy Giusti had the whole package. In her formative years, she had worked hard to attain her Bachelors degree in Biological Sciences and completed her MBA from Harvard Business School. Through hard work and perseverance, she moved up through large companies such as Merck and Gillette, ultimately settling into an executive position at pharmaceutical giant, G.D. Searle & Co. She had a loving husband and a one-year-old daughter, whom she adored. Everything in her life seemed successfully aligned. And then, in 1996, Kathy received a call from her doctor about some routine blood work results – the tests showed evidence of cancer cells. The doctor diagnosed her with multiple myeloma, a rare and orphan for meaning affecting less than 200000 people) of blood cancer, and gave her three years to live. This news turned Kathy Giusti’s life upside down.
Refusing to allow her new predicament to control her, Kathy instead took the disease head-on. As information through the internet was not as prevalent in the 1990s as it is now, Kathy researched scientific journals and articles at her library. She actively reached out to specialists and researchers in the field, and even attended conferences dedicated to related cancer research and treatment development. The more she uncovered, the more enraged she became – why was there so little research and funding for her type of cancer? Why so few treatments? Large pharmaceutical companies concentrated their efforts on more widespread cancers like breast, skin and colon cancer. Were these patients any more special than those with rarer forms? Kathy was beside herself, realizing the other truth behind those companies. Pharmaceutical firms, R&D companies and research institutions had traditionally kept their information under guarded lock and key, secretly stashing their own research for their own benefits rather than for the benefit of those patients waiting for a cure.
It was then that Kathy saw an opportunity. Applying her business education, her medical education as a pre-med undergraduate student and her working knowledge from her years in pharmaceutical firms, Kathy launched the Multiple Myeloma Research Foundation (MMRF). MMRF’s business strategy centers on what she originally felt was missing in the cancer R&D industry – collaboration. Currently, 16 member institutions make up the foundation’s “consortium”. As members of the foundation, these centers receive monetary funding and other types of supportive resources, as well as access to MMRF’s extensive tissue bank. However, in order to remain part of the group, all centers must disclose their research to each other. Collaborations on projects are highly encouraged in order to spread information and ideas in the hope of finding a treatment faster. Not only does the foundation go against the behaviors of medical research companies, who traditionally hide their research from their competitors, but it also remains highly and controversially involved in its members’ operations. Projects must be approved by its Board of Directors (including Kathy), and consortia members are given annual grades on how quickly and effectively they turn around their projects. Although the demands are intense, members can rest assured that MMRF will support their needs and continue to remind them that the battle does not lie with each other but with the cancer, itself.
If building the MMRF was not trying enough, Kathy had been battling multiple myeloma the entire time. Fortunately, she had a diverse and encouraging support network that had stood by her side since the beginning. Old Harvard classmates helped to develop the foundation’s first business plan. Several even sat on the original Board of Directors. Friends with legal backgrounds assisted with federal regulations. Family and friends helped to execute fundraising events. Last but not least, Kathy’s twin sister, Karen, co-founded the organization and donated her stem cells in a transplant
operation that pushed Kathy into remission. Now, with her cancer under control and her family and friends rallying behind her, Kathy can continue building her foundation, obliterating traditional industry norms and giving people with multiple myeloma hope for a cure.
Read this case to answer question 4
Case: Phanindra Sama – redBus
Phanindra Sama did not intend on becoming an entrepreneur. He had finished his degree in engineering and had already found his dream job as a Texas Instruments electrical engineer in Bangalore, India. The cushy offices, the good pay, an expected list of daily tasks to complete – all the comforts of a stable corporate job had completely spoiled him. Perhaps one constant drawback was the commute back and forth to work. Bangalore’s population was booming in 2005, easily surpassing 6 million people with no indications of slowing. The city had grown to become one of the most densely populated in all of India, bringing with it a reputation for inconceivable traffic. It was now, thanks to this traffic, that Phanindras life plan would be flipped upside down.
The Hindu festival of Diwali was just around the corner, and Phanindra was battling after-work traffic in an attempt to find a ticket booth for his bus ride back home to Hyderabad. He would be lucky if he got to the booth in time. He would also be lucky if they had any tickets left. He was not lucky that day. Frustrated with missing his bus back home to Hyderabad, Phanindra realized he was not the only one suffering through the madness. Many Indians had the same travel issues. At the time, the only way to buy bus tickets was to purchase one in person at a brick-and-mortar booth. Once you got there, ticket agents could only sell seats from buses they directly communicated with, leaving customers with few choices and no information about schedules and availability at other booths. There were also no postings of ticket fares, and thus no fixed pricing. Early preparation and a good amount of luck were needed if you planned on booking a ticket during a holiday, not forgetting the impending stress of repeating the process for your return ticket (roundtrip tickets were non-existent). Phanindra knew the use of bus travel in India was expanding with the growing population. And while the bus business was booming, there seemed to be little interest in trying to organize the chaos into a smoother means of transportation. In fact, the bus industry was very unorganized. There was no one easy and convenient platform for customers to buy tickets.
redBus was the first company to recognize and implement a solution to make the bus reservation experience easier. The next year, Phanindra brought together a team of college classmates and started redBus.in, an online ticketing business that provided customers with an easier way of booking bus tickets around India. Using the team’s own savings and an influx of third party investors, Phanindra molded redBus in a way that eliminated those previously accepted annoyances of booking tickets. Customers could book their tickets at home, at a transparent price and with the option of booking their return trips at the same time. The website, which currently links the schedules of over 1000 bus operators with over 10000 routes into one central hub, also allows customers a vastly larger pool of options to choose from. You can even see a layout of the bus seats. Phanindra’s team eventually added software developed in-house, which were sold to existing travel agents and ticket booths that allowed them to tie into the hub. Phani submitted the idea with his two co-founders to TiE—The Indus Entrepreneurs—and received funding for their company. Initially, Phanindra started with only one office in Bengaluru and had 60 destinations on it schedule. As he received more angel funds, he opened four more offices in different cities.
redBus targets the middle and upper-class segments of society and is launching services like mobile payments and call centers in local languages. redBus faces huge competition from bus operators who may sometimes lower their cost and other online travel booking websites. One of redBus’ major tasks was to convince bus operators to allow online ticket sales as they were comfortable dealing with their traditional travel agents. The hardwork paid back and the sales grew ten-fold in its second year, six-fold in its third and doubled in its fourth.
And in mid 2013, the company was successfully acquired by the Ibibo Group for $138 million, one of the largest overseas deals seen so far. Yet, what eventually follows a trail of success is a trail of eager followers, intent on taking advantage of the growing need for Indian ticketing sites. Other online start-ups have cropped up, bringing with them more choices in booking sites and more software options for travel agents and ticket booths. redBus, as the first entrant into the Indian market, will from now on need to battle these new sites for market share. However, in a population exceeding 1.2 billion people, less than 10 percent of total bus passengers actually use online ticketing. By continuing to fine-tune their website, software and other services, redBus can leverage their early entry and support systems to maintain the lead in India’s evolving transportation industry (see Online sources).
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