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Business Planning (Entr 548) Question Paper
Business Planning (Entr 548)
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2013
TIME: 3 HOURS
INSTRUCTIONS
Answer question one and any other three questions
JAMBO BRAND – KENYA IN CRISIS
One of the most feared scenarios for any food Products Company must be an outbreak of food poisoning associated with its products. For Jambo Brand, Kenya Premier Dairy Food Company, 2006 was the year when the nightmare came true, in fairly spectacular fashion. The Company is still struggling to recover, and has suffered from further problems.
What happened
Large numbers of people, mostly in cities, suddenly came down with food poisoning after consuming milk or related product made by Jambi Brand. As events played out, it transpired that over 15,000 people had been affected.
The problem was traced to bacteria concerned was discovered on the production line of a Jambo Brand Milk Product Co. Factory that processed low-fat milk believed to have made nearly 15,000 people ill, the company’s C.E.O said.
Although the production line should have been cleaned regularly, it had not been cleaned thoroughly at the valve. Inspection of the plant condemned hygiene standards as being appalling. By all account it initially sought to downplay the incident and gave the impression of being more concerned for its regulation and standing than it was for the victims of the outbreak.
The case was so serious that made the C.E.O so stressed and admitted in the hospital due to stress and other seniors resigned. The consequences of the case were so dramatic and awful. Sales dropped, consumers lost confidence and the company was pushed to close some of the factories, then the company begins to plan for the way forward, to capture the lost glory and market.
Question One
The problem of Jambo brand is associated with the production section of the business. If the company is to come up with a new production plan in order to capture the lost glory what would it entail.
(8 Marks)
If appointed as a business consultant to assist the company what would you propose to them?
(6 Marks)
If the company was to restructure the management of the business what would be considered?
(5 marks)
What critical risk factors were not managed well in this company?(6 marks)
Question Two
Although many graduates of entrepreneurship can prepare good business plans very few of them can make good entrepreneurs. Discuss.
(12 marks)
Describe the key areas of the operational section of a business plan.
(13 Marks)
Question Three
Every business faces risks in the real world, so every business plan needs to be drafted in consideration of this. Identify any five risks associated with business and propose strategies to minimize the risks. (25 Marks)
Question Four
Kimani runs a guest house in the outskirts of Nairobi. He intends to market the business idea to a potential investor because he would like to expand the business. Kimani has approached you to assist him prepare an elevator pitch which he can present to the investor when they meet during a workshop that both parties are attending.
Write an elevator pitch for Kimani. (10 Marks)
To determine business success, key indicators include liquidity ratios, profitability ratios and efficiency ratios.
Explain the importance of these ratios
If the ratios are moving towards the negatives what should the entrepreneur do for each case, you can use illustrations where possible.
(15 Marks)
Question Five
A business plan is a document that conveys the excitement and promise of a business to stakeholders. Each stakeholder who reads the business plan has different concerns. Identify any five stakeholders that are readers of a business plan, highlighting their concerns and why?
(15 Marks)
Identify the preliminary pages of a business plan and describe what each page contains.
(10 marks)
Question Six
Otis furniture international company produces office chairs. The price of the chairs is $99.75 and the variable cost per chair is $49.75. the following fixed costs are incurred;
Depreciation of plant and equipment per year $20,000
Property taxes per year $12,000
Manager’s salary and fringe benefits per month $5200
Perform a breakeven analysis of this company
What is the total revenue function?
(2 Marks)
What is the total cost function?
(2 Marks)
What is the profits function?
(2 Marks)
What is the breakeven point in number of chairs?
(3 marks)
What is the revenue at the breakeven point?
(2 Marks)
What is the income at the breakeven point?
(2 marks)
Estimate the point when 1500 chairs are produced in a year?
(3 Marks)
How many chairs must be sold for the company to make $75,000 in a year?
(4 marks)
What are the advantages and disadvantages of a breakeven analysis?
(5 marks)
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