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TECHNISCHE UNIVERSITÄT MÜNCHEN TUM School of Management Professur für Strategic Entrepreneurship Prof. Dr. Oliver Alexy Entrepreneurship for Students of Information Systems Winter Term 2016/2017 February 15, 2017 Last Name: First Name: Student ID: Semester: Degree program: Signature: Instructions – PLEASE READ CAREFULLY Please ensure that your exam contains 8 (eight) pages. If not, ask for another copy. To respond to the exam questions, write exclusively on the exam paper. If required, please write on the back. Always clearly signal which question is being answered. Do not separate the pages of the exam paper. Write your name and student ID on all pages in the space provided. You are allowed to use an English-[Your native language] and, if different, an Eng- lish-German dictionary as well as a non-programmable calculator. Any exams offence such as an attempt at copying from your neighbor or the possession of a crib sheet or other notes will lead to a fail grade (“nicht ausreichend” – 5,0). Keeping a cell phone on your person, even if fully switched off, is considered an exams offence, and will result in a fail grade. If you do not wish to leave your mobile phone in your bag, please leave it with us at the front. You have 60 (sixty) minutes available. If you need to take a toilet break etc., you must leave all exam-related materials with one of the invigilators (“Klausuraufsicht”). Other than that, you are not allowed to leave the room until the end of the exam. Best of Luck! Question 1 2 3 Total Points 10 20 30 60 achieved Grade “Entrepreneurship for Students of Information Systems” – Winter 2016/17 February 15, 2016 Page 2 Last Name: First name: Student ID: Part 1: Multiple choice (10 points) In the following, you will be presented five multiple choice questions. Each question is worth 2 points if answered correctly (incorrect answers will not be punished). For each question, only one correct answer exists. For each question, write the correct answer in the space provided below the question. 1) The name of the start-up “Kewazo,” which you got to know in one of the guest lectures, has its origins in which language? A) Finnish B) Greek C) Japanese D) Urdu Your answer: The name of the start-up "Kewazo" has its origins in the C) Japanese language. 2) Which founder characteristic do Tom Conrad and Jeff Church both emphasize as cru-cial for (individual) long-term success? A) Humility B) Intelligence C) People skills D) Perseverance Your answer: A Tom Conrad and Jeff Church, both successful entrepreneurs, emphasize D) Perseverance as a crucial characteristic for individual long-term success. Here's why: Perseverance in Overcoming Challenges: Both founders highlight the importance of persisting through the inevitable challenges and setbacks that come with starting and growing a business. They believe that the ability to keep going, even when faced with difficult times, is key to long-term success. Learning from Failure: They recognize that failure is a part of the entrepreneurial journey. Perseverance enables individuals to learn from their mistakes, adapt, and continue moving forward, rather than giving up when faced with failure. Sustained Effort and Dedication: Success in entrepreneurship often requires a sustained effort over a long period. Perseverance embodies the dedication to keep working towards one's goals, even in the absence of immediate rewards. Adapting and Persisting: The ability to persevere is also linked with flexibility and adaptability. Successful entrepreneurs like Conrad and Church understand that persevering often means being willing to change course and adapt strategies as needed, without losing sight of the overarching vision. This focus on perseverance underscores the recognition that while intelligence, humility, and people skills are valuable, the determination to persist through ups and downs is essential for achieving long-term success in entrepreneurship. Act as an entrepreneurship professor that is helping his student for exam revision on how to answer questions the correct way and get full points. please provide the correct answer. Only one answer is correct. Provide an explanation in very concise short bullet points , less words means better. er “Entrepreneurship for Students of Information Systems” – Winter 2016/17 February 15, 2016 Page 3 Last Name: First name: Student ID: 3) The fact that founders’ individual character and the original setup of their venture have a lasting impact on the venture (even after founders have left it) is called A) Imprinting B) Network effects C) Path-dependence D) Routinization Your answer: 3. A) Imprinting Explanation: Imprinting refers to the lasting influence founders have on their ventures' culture, values, and practices, even after they depart 4) If established successfully, which of the following mechanisms should work most strongly to protect an IT start-up from competition? A) Copyright B) Network effects C) Patents D) Secrecy Your answer: 4. B) Network effects Explanation: Network effects increase a product's value as more people use it, creating a barrier to entry for competitors. 5) The term “three Fs” relates to which aspect or area of new ventures? A) Exit B) HR C) Financing D) Team-building Your answer: 5. C) Financing Explanation: The "three Fs" stands for "Friends, Family, and Fools," a common initial source of funding for new ventures. “Entrepreneurship for Students of Information Systems” – Winter 2016/17 February 15, 2016 Page 4 Last Name: First name: Student ID: Part 2: Short Answer Questions (20 points) In the following, you will be presented six questions, each of which is worth a maximum of four points. Only answer FIVE of these in the space provided below. The exclusive use of bullet points and graphs is acceptable provided that all relevant information is conveyed. 1) Briefly explain the logic of effectuation and why it is a good approach to entrepre- neurship using the example of Alex Krapp, founder of soul-surf. Answer 2) Many people believe that business plans are no longer necessary in this day and age. Briefly explain why such arguments may be correct, and what method entre-preneurs could use instead to structure their business. Answer 3) Drawing on the example of mobile phones, please explain the idea of the “dominant design” and how it influences the nature of competition. Answer “Entrepreneurship for Students of Information Systems” – Winter 2016/17 February 15, 2016 Page 5 Last Name: First name: Student ID: 4) Name and explain two environmental characteristics that are more important to start- ups in IT industries than to start-ups in other industrial sectors. 5) Drawing from stories we learned about Dean Shepherd’s father and Janice Fraser’s first start-up, name and explain two difficulties that may arise when ventures end. 6) Other than imitation, which two basic market entry strategies exist, and what are their respective key advantages and downsides? Soution: 1. Logic of effectuation and its application to Alex Krapp's Soul-Surf: Effectuation principle: Focuses on starting with what one has (resources, skills, networks) and selecting among possible outcomes. Adaptability: Allows entrepreneurs to adapt and change directions based on available resources, making it suitable for uncertain markets. Alex Krapp's application: He could have leveraged his passion for surfing, existing networks, and technology skills to create Soul-Surf, adapting the business model as opportunities emerged. 2. Arguments against business plans and alternative methods: Rapid change: In today's fast-paced environment, rigid business plans can become obsolete quickly. Lean Startup Method: Entrepreneurs can use this approach, emphasizing rapid prototyping, validated learning, and iterative design to adapt quickly. 3. Dominant design in mobile phones and its impact: Dominant design: A widely accepted solution or format within a field, after a period of competition between designs. Influence on competition: Once a dominant design (e.g., smartphones with touch screens) is established, competition shifts from design innovation to improvements in cost, quality, and features. 4. Two environmental characteristics vital for IT startups: Rapid technological change: Requires IT startups to be highly adaptable and innovate quickly. Network effects: More pronounced in IT industries, making early growth and market penetration crucial. 5. Difficulties in venture endings, from Dean Shepherd and Janice Fraser: Emotional distress: Entrepreneurs may experience significant emotional pain and identity loss when their ventures fail. Reputation impact: Failure can affect future opportunities and how other entrepreneurs and investors perceive them. 6. Market entry strategies besides imitation: Innovation: Developing a new product or service that offers unique value. Advantage: Can lead to a significant competitive edge and market leadership. Downside: High risk and investment with no guaranteed success. Niche targeting: Focusing on specific market segments that are underserved. Advantage: Less competition and potentially loyal customer base. Downside: Limited market size, which may restrict growth. “Entrepreneurship for Students of Information Systems” – Winter 2016/17 February 15, 2016 Page 6 Last Name: First name: Student ID: Part 3: Short Essay (30 points) Answer ONE out of the following TWO questions. While the use of bullets and graphs is acceptable, to get full marks, you will need to write an actual short essay. Be focused and stick to the material covered in the course including lecture notes, discussions, readings or textbooks. Please take your time before selecting which questions to answer and think about how to structure your response before you begin writing. Finally, note that only what is legible can be marked in your favor. Option 1: In order to help them grow their company, the founders of Polarstern Energie are planning to acquire external financing. They have heard about debt financing, venture capital, and crowdfunding, and tasked you to work out the benefits and downsides of each approach. Which one would you recommend to them, and why? [Note: You do not have to recommend their actual strategy, but if you do, you will need to make clear why you think it is appropriate.] Option 2: A group of PhD students from TUM has approached you with a discovery they have recently made: a 3D printer that can print human tissue, and potentially even entire organs, including empty pipes that could function as blood vessels (which is, for the sake of this example, something you should assume as cur- rently impossible to do with other 3D printing technologies). The PhD students have asked you join their team in order to support them in bringing this idea to market, so that all of you can benefit (financially) from it. Applying the concept of “Profiting from Innovation” by David Teece, what would your commercialization strategy for this new product look like? Why? Solution: Essay Option 1: Financing Options for Polarstern Energie Introduction: Introduce Polarstern Energie, a green energy company seeking external financing to grow. Brief overview of debt financing, venture capital, and crowdfunding as potential options. Body Paragraph 1: Debt Financing Benefits: No equity dilution, tax-deductible interest payments, retaining full control over the business. Downsides: Requirement to repay regardless of business performance, potential for high interest rates, and collateral obligations. Body Paragraph 2: Venture Capital Benefits: Large amounts of capital available, access to mentorship and industry networks, no repayment obligation if the business fails. Downsides: Equity dilution, loss of some control over business decisions, high expectations for rapid growth and returns. Body Paragraph 3: Crowdfunding Benefits: Access to a broad audience of potential investors, validation of the business concept, no repayment obligation. Downsides: Potentially time-consuming, the success rate is not guaranteed, and might require significant marketing efforts. Body Paragraph 4: Recommendation and Justification Recommendation: Given Polarstern Energie's focus on sustainability and green energy, crowdfunding could be an ideal approach due to the appeal of environmental projects to the public and potential customers. Justification: Crowdfunding not only raises capital but also builds a community of supporters and early adopters, crucial for a company with a social mission. This option avoids the pitfalls of debt and the potential loss of control that comes with venture capital. Conclusion: Summarize the pros and cons of each financing option. Reinforce the recommendation of crowdfunding for Polarstern Energie, emphasizing its alignment with the company's values and goals. Essay Option 2: Commercialization Strategy for a 3D Printer Printing Human Tissue Introduction: Briefly introduce the groundbreaking 3D printer technology developed by TUM PhD students. Mention the objective to commercialize this technology effectively. Body Paragraph 1: Theoretical Framework of “Profiting from Innovation” by David Teece Introduce Teece's theory, focusing on the importance of complementary assets, intellectual property management, and leveraging market opportunities. Body Paragraph 2: Intellectual Property Strategy Key Actions: Secure patents for the technology to protect the innovation and create barriers to entry for competitors. Purpose: Establish a strong intellectual property position to negotiate with potential partners and investors. Body Paragraph 3: Complementary Assets Identification: Identify necessary complementary assets such as manufacturing capabilities, distribution networks, and regulatory expertise. Acquisition Strategy: Form strategic partnerships with existing medical device companies or use licensing agreements to access these assets without significant upfront investment. Body Paragraph 4: Market Entry Strategy Initial Focus: Target research institutions and hospitals for early adoption, leveraging the technology's unique capabilities for complex tissue structures. Expansion Plan: Expand to broader medical applications as the technology proves successful and regulatory approvals are obtained. Body Paragraph 5: Revenue Model Direct Sales: Sell the printers and materials to medical research institutions and hospitals. Licensing: Offer licensing agreements to medical device manufacturers for broader distribution. Custom Printing Services: Provide specialized printing services for custom medical applications. Conclusion: Recap the strategic approach based on Teece's "Profiting from Innovation," emphasizing the protection of IP, leveraging complementary assets, and a focused market entry strategy. Conclude with the potential impact of the technology on healthcare and the importance of a well-considered commercialization strategy to ensure both financial benefits and positive societal contributions. These essay outlines provide a structured approach to addressing the given scenarios, outlining key points and strategies for effective commercialization and financing. The student can now develop these into full essays, expanding on each point with coherent arguments and examples. I am choosing Option. “Entrepreneurship for Students of Information Systems” – Winter 2016/17 February 15, 2016 Page 7 Last Name: First name: Student ID: “Entrepreneurship for Students of Information Systems” – Winter 2016/17 February 15, 2016 Page 8 Last Name: First name: Student ID: TECHNISCHE UNIVERSITÄT MÜNCHEN TUM School of Management Professur für Strategic Entrepreneurship Prof. Dr. Oliver Alexy Entrepreneurship for Students of Information Systems Winter Term 2017/2018 February 16, 2018 Last Name: First Name: Student ID: Semester: Degree program: Signature: Instructions – PLEASE READ CAREFULLY Please ensure that your exam contains 8 (eight) pages. If not, ask for another copy. To respond to the exam questions, write exclusively on the exam paper. If required, please write on the back. Always clearly signal which question is being answered. Do not separate the pages of the exam paper. Write your name and student ID on all pages in the space provided. You are allowed to use an English-[Your native language] and, if different, an Eng- lish-German dictionary as well as a non-programmable calculator. Any exams offence such as an attempt at copying from your neighbor or the possession of a crib sheet or other notes will lead to a fail grade (“nicht ausreichend” – 5,0). Keeping a cell phone on your person, even if fully switched off, is considered an exams offence, and will result in a fail grade. If you do not wish to leave your mobile phone in your bag, please leave it with us at the front. You have 60 (sixty) minutes available. If you need to take a toilet break etc., you must leave all exam-related materials with one of the invigilators (“Klausuraufsicht”). Other than that, you are not allowed to leave the room until the end of the exam. Best of Luck! Question 1 2 3 Total Points 10 20 30 60 achieved Grade “Entrepreneurship for Students of Information Systems” – Winter 2017/18 February 16, 2018 Page 2 Last Name: First name: Student ID: Part 1: Multiple choice (10 points) In the following, you will be presented five multiple choice questions. Each question is worth 2 points if answered correctly (incorrect answers will not be punished). For each question, only one correct answer exists. For each question, write the correct answer in the space provided below the question. 1) Which of the following is not (!) a key part of the idea of effectuation? A) Affordable loss B) Control through goal definition C) Focus on available means D) Surprises as opportunities Your answer: 1. B) Control through goal definition Explanation: Effectuation emphasizes adapting goals based on available means, not controlling through predefined goals. 2) The existence of the dominant ____ should fundamentally affect what type of entrepre- neurial project will be more successful. A) asset B) competence C) design D) standard 2. Your answer: D) standard Explanation: The dominant standard affects the success of entrepreneurial projects by influencing market acceptance and compatibility requirements. “Entrepreneurship for Students of Information Systems” – Winter 2017/18 February 16, 2018 Page 3 Last Name: First name: Student ID: 3) In hindsight, we learned that Janice Fraser heavily regretted having A) been insufficiently nice to her employees B) sold her venture for good money C) started an entrepreneurial career D) told her kids to take less risk Your answer: 3. B) sold her venture for good money Explanation: Regretting selling her venture suggests a reflection on the value of her entrepreneurial journey versus financial gain. 4) About which of the following did we learn in one of our guest lectures? A) Earthpreneurs B) Firepreneurs C) Waterpreneurs D) Windpreneuers Your answer: 4. Earthpreneurs Explanation: Earthpreneurs focuses on entrepreneurs who aim to solve environmental problems, a likely topic for guest lectures on sustainable entrepreneurship. 5) The performance of a sustainable venture is A) best captured by its bottom line. B) best captured by its double-bottom line. C) best captured by its triple-bottom line. D) impossible to capture. Your answer: 5. C) best captured by its triple-bottom line Explanation: A triple-bottom line measures a sustainable venture's performance in terms of social, environmental, and financial impact. “Entrepreneurship for Students of Information Systems” – Winter 2017/18 February 16, 2018 Page 4 Last Name: First name: Student ID: Part 2: Short Answer Questions (20 points) In the following, you will be presented six questions, each of which is worth a maximum of four points. Only answer FIVE of these in the space provided below. The exclusive use of bullet points and graphs is acceptable provided that all relevant information is conveyed. 1) Please give two reasons for why we should not (!) have people like Richard Branson or Bill Gates as role models for entrepreneurship. 2) Name and explain two environmental characteristics that are more important to start- ups in IT industries than to start-ups in other industrial sectors. 3) Name and explain two difficulties that may arise during venture growth other than the venture needing more money. “Entrepreneurship for Students of Information Systems” – Winter 2017/18 February 16, 2018 Page 5 Last Name: First name: Student ID: 4) Below, please draw an empty business model canvas (following the design sugges- tions of Alexander Osterwalder). That means: draw the canvas and label all fields, but do not write anything else in there. 5) Using an example of your choice, briefly explain what complementary assets are and why they are instrumental to profiting from innovation. 6) Name and explain two general insights that follow from Greiner’s model. 1. Reasons against having Branson or Gates as sole role models for entrepreneurship: Unrealistic expectations: Their exceptional success stories can set unrealistic benchmarks for average entrepreneurs. Survivorship bias: Highlighting only the most successful entrepreneurs ignores the vast majority who fail or achieve moderate success, potentially misleading about the true nature and risks of entrepreneurship. 2. Environmental characteristics crucial for IT startups: Rapid technological advancement: IT industries evolve quickly, requiring startups to continuously innovate and adapt to new technologies. Importance of scalability: IT startups often rely on digital products/services that need to scale quickly to capture market share and benefit from network effects. 3. Difficulties during venture growth besides financial needs: Maintaining company culture: Rapid growth can dilute a company's culture and values, affecting employee morale and company identity. Operational challenges: Scaling operations can lead to challenges in managing increased complexity, such as supply chain issues or quality control. 4. Empty Business Model Canvas (BMC) layout: Key Partners Key Activities Key Resources Value Propositions Customer Relationships Channels Customer Segments Cost Structure Revenue Streams (Note: A graphical representation is required to fully illustrate the BMC, which involves nine building blocks as listed above.) 5. Complementary assets and their importance using an example: Definition: Assets that enhance the value of a core product or innovation. Example: Smartphone apps (core innovation) benefit greatly from a robust app store ecosystem (complementary asset), which improves user experience and device utility, driving greater adoption and profits from the innovation. 6. Insights from Greiner’s Growth Model: Evolution and Revolution Phases: Organizations go through phases of growth (evolution) and crisis (revolution), each requiring different management strategies. Importance of adaptability: Success depends on the organization's ability to recognize the current phase it is in and adapt its strategies accordingly to navigate challenges and continue growing. “Entrepreneurship for Students of Information Systems” – Winter 2017/18 February 16, 2018 Page 6 Last Name: First name: Student ID: Part 3: Short Essay (30 points) Answer ONE out of the following TWO questions. While the use of bullets and graphs is acceptable, to get full marks, you will need to write an actual short essay. Be focused and stick to the material covered in the course including lecture notes, discussions, readings or textbooks. Please take your time before selecting which questions to answer and think about how to structure your response before you begin writing. Finally, note that only what is legible can be marked in your favor. Option 1: BMW (yes, the large car company from Munich) has hired you as a consultant to help them grow their business. Explain the four different types of growth strate- gies and give examples for how they could be used by BMW. Which of these options should they choose? Why? [Note: You do not have to recommend their actual strategy, but if you do, you will need to make clear why you think it is appropriate.] Option 2: In order to finance their growth ambitions, the founders of Acrai (the firm from the guest lecture) are planning to acquire (more) external financing. They have heard about debt financing, venture capital, and crowdfunding, and tasked you to work out the benefits and downsides of each approach. Which one would you recommend to them, and why? [Note: You do not have to guess or restate their current plans, but if you do, you will still need to make clear why you think they are appropriate.] Essay Option 1: Growth Strategies for BMW Introduction: Briefly introduce BMW as a leading car manufacturer seeking to expand its business. Outline the four types of growth strategies: Market Penetration, Market Development, Product Development, and Diversification. Body Paragraph 1: Market Penetration Explanation: Increasing sales of existing products in existing markets. BMW Example: Intensify marketing efforts for electric vehicles in European markets where BMW already has a strong presence. Advantages: Builds on existing strengths and customer base. Body Paragraph 2: Market Development Explanation: Entering new markets with existing products. BMW Example: Expand the market for BMW electric vehicles to emerging economies with growing middle classes, like India and Brazil. Advantages: Opens up new revenue streams without the need for new product development. Body Paragraph 3: Product Development Explanation: Developing new products for existing markets. BMW Example: Develop and launch autonomous driving features for the existing models or introduce new electric vehicle models with advanced technology. Advantages: Keeps the product line fresh and meets evolving consumer demands. Body Paragraph 4: Diversification Explanation: Introducing new products to new markets. BMW Example: Enter the electric scooter market globally, leveraging BMW's technology and brand reputation. Advantages: Potential for significant growth by tapping into new markets and product categories. Body Paragraph 5: Recommended Strategy and Justification Recommendation: Focus on Product Development, particularly in electric and autonomous vehicles. Justification: This aligns with global trends towards sustainability and innovation in mobility, leveraging BMW's existing strengths while addressing emerging market demands. Conclusion: Summarize the potential of each growth strategy for BMW. Reinforce the recommendation of product development as the optimal path for growth, emphasizing the importance of innovation and sustainability in securing BMW's future in the competitive automotive industry. Essay Option 2: Financing Options for Acrai Introduction: Introduce Acrai, a firm focusing on innovative technology, seeking external financing to fuel growth. Overview of financing options: Debt Financing, Venture Capital, and Crowdfunding. Body Paragraph 1: Debt Financing Benefits: No equity dilution, fixed repayment schedule. Downsides: Interest obligations, requirement for collateral, not suitable for all stages of startups. Acrai Consideration: May be challenging due to the high-risk nature of tech startups. Body Paragraph 2: Venture Capital Benefits: Large sums of money, expertise, and networks. Downsides: Equity dilution, possible loss of control. Acrai Consideration: Ideal for high-growth tech startups needing significant investment and guidance. Body Paragraph 3: Crowdfunding Benefits: Raises capital while validating the product, broadens investor base. Downsides: Time-consuming, success not guaranteed, may require significant marketing effort. Acrai Consideration: Useful for product validation and engaging a community but might not provide sufficient funds for scaling. Body Paragraph 4: Recommendation and Justification Recommendation: Venture Capital is the most suitable option for Acrai. Justification: Offers the financial resources and industry expertise necessary for a tech startup to scale rapidly. The potential for high growth in Acrai's sector makes it attractive to venture capitalists, and equity dilution is a reasonable trade-off for significant growth. Conclusion: Recap the pros and cons of each financing option for Acrai. Reiterate the recommendation for venture capital, highlighting its alignment with Acrai's growth ambitions and the startup's need for both capital and strategic partners in the tech industry. These essay outlines provide a structured approach to exploring growth strategies for BMW and financing options for Acrai, including detailed examples and justifications for recommended strategies. The student can use these blueprints to draft comprehensive essays on the topics. I am choosing Option. “Entrepreneurship for Students of Information Systems” – Winter 2017/18 February 16, 2018 Page 7 Last Name: First name: Student ID: “Entrepreneurship for Students of Information Systems” – Winter 2017/18 February 16, 2018 Page 8 Last Name: First name: Student ID: TECHNISCHE UNIVERSITÄT MÜNCHEN TUM School of Management Professur für Strategic Entrepreneurship Prof. Dr. Oliver Alexy Entrepreneurship for Students of Information Systems Winter Term 2018/2019 February 15, 2019 Last Name: First Name: Student ID: Semester: Degree program: Signature: Instructions – PLEASE READ CAREFULLY Please ensure that your exam contains 8 (eight) pages. If not, ask for another copy. To respond to the exam questions, write exclusively on the exam paper. If required, please write on the back. Always clearly signal which question is being answered. Do not separate the pages of the exam paper. Write your name and student ID on all pages in the space provided. You are allowed to use an English-[Your native language] and, if different, an Eng- lish-German dictionary as well as a non-programmable calculator. Any exams offence such as an attempt at copying from your neighbor or the possession of a crib sheet or other notes will lead to a fail grade (“nicht ausreichend” – 5,0). Keeping a cell phone on your person, even if fully switched off, is considered an exams offence, and will result in a fail grade. If you do not wish to leave your mobile phone in your bag, please leave it with us at the front. You have 60 (sixty) minutes available. If you need to take a toilet break etc., you must leave all exam-related materials with one of the invigilators (“Klausuraufsicht”). Other than that, you are not allowed to leave the room until the end of the exam. Best of Luck! Question 1 2 3 Total Points 10 20 30 60 achieved Grade “Entrepreneurship for Students of Information Systems” – Winter 2018/19 February 15, 2019 Page 2 Last Name: First name: Student ID: Part 1: Multiple choice (10 points) In the following, you will be presented five multiple choice questions. Each question is worth 2 points if answered correctly (incorrect answers will not be punished). For each question, only one correct answer exists. For each question, write the correct answer in the space provided below the question. 1) For which of the following industries is Alex Krapp’s firm SoulSurf currently develop- ing an app? A) Alcohol beverages B) Automatic weeding C) Digital lifestyle D) Smart foods Your answer: 1. C) Digital lifestyle Explanation: SoulSurf is likely to focus on digital lifestyle, aligning with trends in technology and personal wellness. 2) A firm in which of following times and industries would be most likely to file for a pa- tent? A) 18th century porcelain B) 19th century cookies C) 20th century tires D) 21st century software Your answer: 2. D) 21st century software Explanation: The 21st century has seen significant growth in software development and innovation, making it a prime industry for patent filings. “Entrepreneurship for Students of Information Systems” – Winter 2018/19 February 15, 2019 Page 3 Last Name: First name: Student ID: 1) To measure success in sustainable entrepreneurship, firms can draw on the concept of the bottom-line A) single B) double C) triple D) quadruple Your answer: 1. C) triple Explanation: The triple bottom line measures success in terms of social, environmental, and financial impact, aligning with sustainable entrepreneurship goals. 2) Which of the following was never a part of the Virgin Group? A) Air Asia X B) Virgin Brides C) Virgin Cola D) Virgin Shoes Your answer: 2. A) Air Asia X Explanation: Air Asia X is not a part of the Virgin Group; it's a low-cost airline based in Malaysia, whereas Virgin Group has invested in various industries but not Air Asia X. 3) According to Tina Seelig, if an entrepreneur never fails, that would be a A) good thing, because it would show the entrepreneur did everything right. B) good thing, but it would be because the entrepreneur was very lucky. C) bad thing, because the entrepreneur had not taken enough risk. D) bad thing, because failure is needed to be able to appreciate successes Your answer: 3. C) bad thing, because the entrepreneur had not taken enough risk Explanation: Tina Seelig values failure as a learning opportunity and indicator of risk-taking, crucial for innovation and growth in entrepreneurship. “Entrepreneurship for Students of Information Systems” – Winter 2018/19 February 15, 2019 Page 4 Last Name: First name: Student ID: Part 2: Short Answer Questions (20 points) In the following, you will be presented six questions, each of which is worth a maximum of four points. Only answer FIVE of these in the space provided below. The exclusive use of bullet points and graphs is acceptable provided that all relevant information is conveyed. 1) Explain the concept of entrepreneurial intent and illustrate it with two examples from Alex Krapp’s life an entrepreneurial career. 2) VK Energie (from the guest lecture) is a social venture helping energy producers op- timize their power plants. State one reason each for why and for why not this com- pany should be considered an IT start-up. How would you classify it? Why? 3) Name and explain two general insights that follow from the so-called Greiner model (note how “general” implies that the insights should apply to the entire model). “Entrepreneurship for Students of Information Systems” – Winter 2018/19 February 15, 2019 Page 5 Last Name: First name: Student ID: 4) Explain two benefits of financing via a venture capital in contrast to a bank loan. 5) How does Kickstarter work—what do they offer, and how are they making money? 6) Briefly define what complementary assets are. Explain why they are instrumental to profiting from innovation using the example of a pharmaceutical company or product of your choice. 1. Concept of entrepreneurial intent with examples from Alex Krapp: Definition: Entrepreneurial intent refers to the commitment to starting and managing a new business venture. Example 1: Alex's decision to pivot Soul-Surf from a hobby project to a commercial product shows his intent to create value and solve problems in the digital lifestyle space. Example 2: Seeking investment for Soul-Surf to scale operations demonstrates Alex's serious intent to grow his entrepreneurial venture. 2. VK Energie as a social venture and its classification: Reason for IT startup classification: Uses technology to provide solutions for optimizing power plants, which is characteristic of IT startups. Reason against IT startup classification: Its primary mission is social impact (optimizing energy production for sustainability), not technology innovation for profit. Classification: More accurately classified as a social enterprise with a strong IT component. It blends social goals with technology solutions, focusing on sustainability in the energy sector. 3. General insights from Greiner’s model: Growth through phases: Organizations grow through defined phases, each characterized by a period of evolution followed by a revolutionary period of crisis that demands change. Adaptation is crucial: Success depends on the organization's ability to recognize and adapt to the challenges of each phase, requiring changes in management practices, structures, and strategies. 4. Benefits of venture capital financing vs. bank loan: Access to expertise: Venture capitalists often provide valuable industry insights, mentorship, and networks in addition to capital. Flexibility in repayment: Unlike bank loans with fixed repayments, venture capital does not require immediate repayment, allowing startups to use funds for growth before generating profit. 5. How Kickstarter works: Offering: A crowdfunding platform where creators can fund projects through donations from the public in exchange for rewards. Revenue model: Kickstarter earns money by taking a percentage of the funds raised for successful projects, aligning its interests with project creators. 6. Complementary assets and their importance in innovation: Definition: Assets that a company needs in addition to its main product or innovation to ensure success in the market. Importance with example: For a pharmaceutical company, complementary assets might include a strong distribution network and partnerships with healthcare providers. These assets are crucial for ensuring that the innovation reaches its target market effectively and meets regulatory requirements, ultimately driving profitability from the innovation. “Entrepreneurship for Students of Information Systems” – Winter 2018/19 February 15, 2019 Page 6 Last Name: First name: Student ID: Part 3: Short Essay (30 points) Answer ONE out of the following TWO questions. While the use of bullets and graphs is acceptable, to get full marks, you will need to write an actual short essay. Be focused and stick to the material covered in the course including lecture notes, discussions, readings or textbooks. Please take your time before selecting which questions to answer and think about how to structure your response before you begin writing. Finally, note that only what is legible can be marked in your favor. Option 1: Alex Krapp from SoulSurf (from the guest lecture) has hired you as a consultant to help him grow his business. Explain the four different types of growth strate- gies and give examples for how they could be used by SoulSurf. Which of these options should they choose? Why? [Note: You do not have to recommend their actual strategy, but if you do, you will need to make clear why you think it is appropriate.] Option 2: Explain the elements of a business model according to Alexander Osterwalder. Apply the concept to the Tesla’s car division (and only the car division!). In doing so, show how the elements of the business model are interlinked according to Osterwalder, and in which order they should be considered. Essay Option 1: Growth Strategies for SoulSurf Introduction: Introduce SoulSurf, a digital platform connecting surfing enthusiasts with instructors and experiences. Outline the four types of growth strategies: Market Penetration, Market Development, Product Development, and Diversification. Body Paragraph 1: Market Penetration Explanation: Increase market share in existing markets with current offerings. SoulSurf Example: Increase marketing efforts and partnerships with local surf schools in existing markets to drive more users to the platform. Advantages: Leverages existing infrastructure and customer base. Body Paragraph 2: Market Development Explanation: Enter new markets with existing products. SoulSurf Example: Expand the platform to new geographical locations where surfing is popular but SoulSurf has no presence, like Brazil or Hawaii. Advantages: Expands customer base without altering the product. Body Paragraph 3: Product Development Explanation: Develop new products or services for existing markets. SoulSurf Example: Develop additional features such as virtual reality surfing experiences or a line of SoulSurf-branded surfing gear. Advantages: Meets additional needs of current users and attracts new users. Body Paragraph 4: Diversification Explanation: Introduce new products to new markets. SoulSurf Example: Launch a new app segment focusing on other water sports (kitesurfing, windsurfing) in markets not currently served by SoulSurf. Advantages: Taps into new customer segments and reduces dependency on a single market. Body Paragraph 5: Recommended Strategy and Justification Recommendation: Market Development is the most suitable option for SoulSurf. Justification: Expanding into new surfing markets leverages the existing platform's strengths while accessing new customer segments without the need for significant product changes, balancing growth potential with manageable risk. Conclusion: Recap the growth strategy options available to SoulSurf. Reinforce the recommendation of market development, emphasizing its potential to effectively grow SoulSurf's user base and presence in the global surfing community. Essay Option 2: Tesla’s Car Division Through Osterwalder’s Business Model Canvas Introduction: Brief introduction to Alexander Osterwalder’s Business Model Canvas (BMC) as a tool for understanding a business model. Mention the focus on Tesla’s car division for applying the BMC concept. Body Paragraph 1: Key Partners Explanation: The network of suppliers and partners that support the business. Tesla Example: Battery suppliers, software developers, and the Supercharger network partners. Body Paragraph 2: Key Activities Explanation: The most important activities needed to make the business model work. Tesla Example: Design and manufacturing of electric vehicles, battery technology innovation, and development of autonomous driving software. Body Paragraph 3: Key Resources Explanation: The assets required to offer and deliver the previously mentioned elements. Tesla Example: Manufacturing facilities, proprietary technology in batteries and software, and the Supercharger network. Body Paragraph 4: Value Propositions Explanation: The bundle of products and services that create value for a specific customer segment. Tesla Example: Innovative electric cars offering high performance, safety, and environmental benefits, coupled with cutting-edge technology in autonomy and an extensive charging infrastructure. Body Paragraph 5: Customer Relationships Explanation: The types of relationships a company establishes with specific customer segments. Tesla Example: Direct sales model, customer service, and community engagement through social media and events. Body Paragraph 6: Channels Explanation: How a company communicates with and reaches its customer segments to deliver a value proposition. Tesla Example: Direct sales through Tesla stores, online sales platform, and mobile app. Body Paragraph 7: Customer Segments Explanation: The different groups of people or organizations an enterprise aims to reach and serve. Tesla Example: Environmentally conscious consumers, technology enthusiasts, and luxury sports car buyers. Body Paragraph 8: Cost Structure Explanation: The major costs involved in operating a business model. Tesla Example: R&D costs, manufacturing and operational expenses, and sales and marketing. Body Paragraph 9: Revenue Streams Explanation: The way a company makes income from each customer segment. Tesla Example: Sales of vehicles, software updates, and services like the Supercharger network usage fees. Conclusion: Summarize how the elements of the BMC are interlinked and support Tesla’s business model in the car division. Highlight the importance of understanding these connections for strategic planning and operational success. These essay structures offer a comprehensive guide for analyzing SoulSurf's growth strategies and applying Osterwalder's Business Model Canvas to Tesla's car division, providing the student with clear directions for drafting insightful essays. I am choosing Option. “Entrepreneurship for Students of Information Systems” – Winter 2018/19 February 15, 2019 Page 7 Last Name: First name: Student ID: “Entrepreneurship for Students of Information Systems” – Winter 2018/19 February 15, 2019 Page 8 Last Name: First name: Student ID: TECHNISCHE UNIVERSITÄT MÜNCHEN TUM School of Management Professur für Strategic Entrepreneurship Prof. Dr. Oliver Alexy Entrepreneurship for Students of Information Systems Winter Term 2019/2020 February 13, 2020 Last Name: First Name: Student ID: Semester: Degree program: Signature: Instructions – PLEASE READ CAREFULLY Please ensure that your exam contains 8 (eight) pages. If not, ask for another copy. To respond to the exam questions, write exclusively on the exam paper. If required, please write on the back. Always clearly signal which question is being answered. Do not separate the pages of the exam paper. Write your name and student ID on all pages in the space provided. You are allowed to use an English-[Your native language] and, if different, an Eng- lish-German dictionary as well as a non-programmable calculator. Any exams offence such as an attempt at copying from your neighbor or the possession of a crib sheet or other notes will lead to a fail grade (“nicht ausreichend” – 5,0). Keeping a cell phone on your person, even if fully switched off, is considered an exams offence, and will result in a fail grade. If you do not wish to leave your mobile phone in your bag, please leave it with us at the front. You have 60 (sixty) minutes available. If you need to take a toilet break etc., you must leave all exam-related materials with one of the invigilators (“Klausuraufsicht”). Other than that, you are not allowed to leave the room until the end of the exam. Best of Luck! Question 1 2 3 Total Points 10 20 30 60 achieved Grade “Entrepreneurship for Students of Information Systems” – Winter 2019/20 February 13, 2020 Page 2 Last Name: First name: Student ID: Part 1: Multiple choice (10 points) In the following, you will be presented five multiple choice questions. Each question is worth 2 points if answered correctly (incorrect answers will not be punished). For each question, only one correct answer exists. For each question, write the correct answer in the space provided below the question. 1) Two of Porter’s ‘five forces’ that determine the attractiveness of an industry are A) Advancedness of technology and bargaining power of suppliers B) Bargaining power of customers and threat of substitution C) Barriers to entry and threat of imitation D) Competitive advantage and rivalry Your answer: 1. B) Bargaining power of customers and threat of substitution Explanation: Porter's five forces include the bargaining power of buyers (customers) and the threat of substitute products or services, among others. 2) Which of the following companies has developed a smartphone app aimed at help-ing online retailers reduce the amount of returns in online clothes shopping? A) best.fit B) measure.com C) presize.ai D) size.me Your answer: 2. C) presize.ai Explanation: presize.ai is known for developing technology aimed at reducing returns in online clothing shopping by helping customers find the right fit. “Entrepreneurship for Students of Information Systems” – Winter 2019/20 February 13, 2020 Page 3 Last Name: First name: Student ID: 3) To measure success in sustainable entrepreneurship, firms can draw on the concept of the bottom-line A) single B) double C) triple D) quadruple Your answer: 3. C) triple Explanation: The triple bottom line concept measures success in sustainable entrepreneurship through social, environmental, and financial impact. 4) Which of the following is an example of a (type of) leveraged buy-out? A) A venture capital fund invests into a venture in return for 20% of the equity. B) The company’s current management, using some of their own and a lot of bor- rowed money, acquires the company from its current owners. C) Outside managers use their own money to acquire a venture, and then sell it off piece by piece. D) all of the above Your answer: 4. B) The company’s current management, using some of their own and a lot of borrowed money, acquires the company from its current owners. Explanation: This scenario describes a classic leveraged buy-out (LBO), where current management buys out the company with a combination of personal and borrowed funds. 5) The less you want to become dependent on others, the more you should rely on ________ as a key source of financing. A) banks B) bootstrapping C) risk capital D) venture capital Your answer: 5. B) bootstrapping Explanation: Bootstrapping involves using personal funds and generated revenue to finance the business, reducing dependency on external financiers. “Entrepreneurship for Students of Information Systems” – Winter 2019/20 February 13, 2020 Page 4 Last Name: First name: Student ID: Part 2: Short Answer Questions (20 points) In the following, you will be presented six questions, each of which is worth a maximum of four points. Only answer FIVE of these in the space provided below. The exclusive use of bullet points and graphs is acceptable provided that all relevant information is conveyed. 1) Briefly explain key features of the idea of effectuation using the example of Alex Krapp. 2) How does Kickstarter work—what do they offer, and how are they making money? 3) Explain two benefits of financing via a bank loan in contrast to venture capital. “Entrepreneurship for Students of Information Systems” – Winter 2019/20 February 13, 2020 Page 5 Last Name: First name: Student ID: 4) Using the example of “Shopshop”, define and explain the idea of first mover ad- vantage, and explain under which conditions it may be possible to attain them for a platform business. 5) Using the example of Facebook, give one very brief (one sentence per example may well be sufficient) example for each of the four growth strategies that a firm may fol- low: penetration, market development, product development, and diversification. 6) Name and explain two general insights that follow from the so-called Greiner model (note how “general” implies that the insights should apply to the entire model). 1. Key features of effectuation with Alex Krapp's example: Start with available means: Alex likely began with his skills, interests, and network to develop Soul-Surf. Leverage contingencies: Instead of avoiding surprises, Alex might have adapted his strategy based on unexpected opportunities or feedback, aligning with effectuation's principle of turning surprises into opportunities. 2. How Kickstarter works: Offering: A crowdfunding platform where project creators present their ideas to the public to raise funds. Making money: Kickstarter collects a fee (usually 5%) from the funds raised for projects that reach their funding goals. 3. Benefits of financing via a bank loan vs. venture capital: No equity dilution: Borrowing from a bank does not require giving up a portion of the company's ownership, unlike venture capital. Interest is tax-deductible: The interest on bank loans can be deducted from the company's taxes, reducing the overall cost of the loan. 4. First mover advantage using "Shopshop" example: Definition: The competitive advantage gained by being the first to enter a market with a new product or service. Conditions for attainment: For a platform business like "Shopshop," first mover advantage could be secured by quickly establishing a large user base, creating network effects that discourage competitors, and securing key partnerships or resources that are critical to the platform's operation. 5. Facebook's growth strategies: Penetration: Increasing user engagement through algorithm updates to show more relevant content. Market Development: Expanding into new geographical markets by adding language support and local features. Product Development: Launching new features like Facebook Marketplace to keep users engaged and attract new ones. Diversification: Acquiring Instagram and WhatsApp to enter new market segments and add different types of social media services to its portfolio. 6. General insights from Greiner’s model: Growth through phases: Organizations experience growth in stages, each followed by a crisis that requires a management and organizational change to overcome. Need for adaptation: Success and sustained growth depend on the organization’s ability to recognize the need for and to implement change in response to the crises that arise at the end of each growth phase. “Entrepreneurship for Students of Information Systems” – Winter 2019/20 February 13, 2020 Page 6 Last Name: First name: Student ID: Part 3: Long Essay (30 points) Answer ONE out of the following TWO questions. While the use of bullets and graphs is acceptable, to get full marks, you will need to write an actual short essay. Be focused and stick to the material covered in the course including lecture notes, discussions, readings or textbooks. Please take your time before selecting which questions to answer and think about how to structure your response before you begin writing. Finally, note that only what is legible can be marked in your favor. Option 1: Explain the elements of a business model according to Alexander Osterwalder. Apply the concept to the “Social Bee.” In doing so, show how the elements of the business model are interlinked according to Osterwalder, and in which order they should be considered. Option 2: The TUM hyperloop project team has asked you to join them in order to support them in bringing this idea to market, so that all of you can benefit (financially) from it. Applying the concept of “Profiting from Innovation” by David Teece, what would your commercialization strategy for this new product look like? Why? Essay Option 1: Business Model of “Social Bee” Through Osterwalder’s Lens Introduction: Brief overview of Alexander Osterwalder's Business Model Canvas (BMC) as a strategic management tool. Introduction to “Social Bee,” a social enterprise focusing on integrating refugees into the workforce. Body Paragraph 1: Key Partners Explanation: Entities that help the business to operate and succeed. Social Bee Example: NGOs for refugee support, companies seeking diverse workforces, vocational training centers. Interlinkage: Supports Key Activities by providing essential resources and channels. Body Paragraph 2: Key Activities Explanation: Core actions necessary to execute the company’s value proposition. Social Bee Example: Recruitment and training of refugees, partnership development with employers. Interlinkage: Directly influences Value Propositions and Customer Relationships. Body Paragraph 3: Key Resources Explanation: Assets crucial for the business's success. Social Bee Example: Skilled trainers, a strong network of partner companies, and training facilities. Interlinkage: Foundation for delivering Key Activities and maintaining Customer Relationships. Body Paragraph 4: Value Propositions Explanation: The unique value Social Bee offers to its customers. Social Bee Example: Providing companies with skilled, job-ready refugees; promoting social integration. Interlinkage: Determines Customer Segments and influences Channels and Customer Relationships. Body Paragraph 5: Customer Relationships Explanation: Types of relationships established with different customer segments. Social Bee Example: Personal assistance to partner companies, ongoing support for employed refugees. Interlinkage: Enhances Value Propositions and is tailored to Customer Segments. Body Paragraph 6: Channels Explanation: How Social Bee communicates with and reaches its customer segments. Social Bee Example: Direct sales team, online platform, social media, networking events. Interlinkage: Channels are the pathways to deliver Value Propositions to Customer Segments. Body Paragraph 7: Customer Segments Explanation: The specific groups Social Bee aims to serve. Social Bee Example: Companies looking for diverse talents, refugees seeking employment. Interlinkage: The starting point that defines the direction of Value Propositions and informs Key Activities. Body Paragraph 8: Cost Structure Explanation: The major costs involved in operating the business. Social Bee Example: Training program development, staff salaries, marketing and outreach. Interlinkage: Influenced by Key Activities and Resources, it outlines the financial sustainability of the model. Body Paragraph 9: Revenue Streams Explanation: How Social Bee generates income. Social Bee Example: Service fees from partner companies, grants, and donations. Interlinkage: The financial outcome of successfully delivering the Value Proposition to Customer Segments. Conclusion: Recap how each element of the BMC contributes to understanding Social Bee’s business model. Highlight the importance of starting with Customer Segments and Value Propositions to ensure the model meets market needs, followed by detailing the infrastructure (Key Activities, Resources, Partners) and financial viability (Cost Structure, Revenue Streams), emphasizing the interconnectivity and strategic importance of each component. Essay Option 2: Commercialization Strategy for TUM Hyperloop Introduction: Briefly introduce the TUM hyperloop project as an innovative transportation technology. Overview of “Profiting from Innovation” by David Teece and its relevance to commercializing the hyperloop. Body Paragraph 1: Securing Intellectual Property Rights Explanation: Importance of patents and copyrights to protect the novel technology. TUM Hyperloop Example: Patent key technologies and engineering innovations. Rationale: Creates barriers to entry, essential for negotiating with partners and attracting investment. Body Paragraph 2: Leveraging Complementary Assets Explanation: Identifying and securing assets that are essential for bringing the innovation to market. TUM Hyperloop Example: Partnership with infrastructure developers, governments for regulatory approvals, and logistics companies. Rationale: Ensures the technology can be deployed and operated efficiently, enhancing its marketability. Body Paragraph 3: Developing a Go-to-Market Strategy Explanation: Planning how to introduce the hyperloop to the market. TUM Hyperloop Example: Pilot projects in collaboration with forward-thinking cities or regions; demonstration events to showcase technology benefits. Rationale: Builds public and governmental support, demonstrates feasibility and benefits, essential for broader adoption. Body Paragraph 4: Choosing a Revenue Model Explanation: Deciding how the project will generate financial returns. TUM Hyperloop Example: Licensing technology to infrastructure developers, offering consultancy services for project implementation, maintenance contracts. Rationale: Diversifies income sources, ensures long-term profitability and sustainability of the project. Body Paragraph 5: Building the Ecosystem Explanation: Creating a supportive environment for the innovation. TUM Hyperloop Example: Collaborating with educational institutions for research and development, engaging with policy-makers for supportive regulations. Rationale: Fosters innovation, accelerates development and adoption, and ensures alignment with societal and environmental goals. Conclusion: Summarize the proposed commercialization strategy based on Teece’s framework, emphasizing the importance of intellectual property, complementary assets, market strategy, revenue model, and ecosystem development. Conclude with the potential impact of the TUM hyperloop project on future transportation, stressing the importance of a strategic approach to commercialization for maximizing the benefits from innovation. These essay outlines provide a structured framework for analyzing Social Bee through Osterwalder’s Business Model Canvas and devising a commercialization strategy for the TUM hyperloop project, guiding the student towards developing insightful and comprehensive essays. I am choosing Option. “Entrepreneurship for Students of Information Systems” – Winter 2019/20 February 13, 2020 Page 7 Last Name: First name: Student ID: “Entrepreneurship for Students of Information Systems” – Winter 2019/20 February 13, 2020 Page 8 Last Name: First name: Student ID: TECHNISCHE UNIVERSITÄT MÜNCHEN TUM School of Management Professur für Innovation and Organization Design Prof. Dr. Oliver Alexy Entrepreneurship for Students of Information Systems Winter Term 2022/2023 February 14, 2023 Last Name: First Name: Student ID: Semester: Degree program: Signature: Instructions – PLEASE READ CAREFULLY Please ensure that your exam contains 8 (eight) pages. If not, ask for another copy. To respond to the exam questions, write exclusively on the exam paper. If required, please write on the back. Always clearly signal which question is being answered. Do not separate the pages of the exam paper. Write your name and student ID on all pages in the space provided. You are allowed to use an English-[Your native language] and, if different, an Eng- lish-German dictionary as well as a non-programmable calculator. Any exams offence such as an attempt at copying from your neighbor or the possession of a crib sheet or other notes will lead to a fail grade (“nicht ausreichend” – 5,0). Keeping a cell phone on your person, even if fully switched off, is considered an exams offence, and will result in a fail grade. If you do not wish to leave your mobile phone in your bag, please leave it with us at the front. You have 60 (sixty) minutes available. If you need to take a toilet break etc., you must leave all exam-related materials with one of the invigilators (“Klausuraufsicht”). Other than that, you are not allowed to leave the room until the end of the exam. Best of Luck! Question 1 2 3 Total Points 10 20 30 60 achieved Grade “Entrepreneurship for Students of Information Systems” – Winter 2022/23 February 14, 2023 Page 2 Last Name: First name: Student ID: Part 1: Multiple choice (10 points) In the following, you will be presented FIVE multiple choice questions. Please answer ALL of them. Each question is worth 2 points if answered correctly (incorrect answers will not be punished). For each question, only one correct answer exists. For each question, write the correct answer in the space provided below the question. 1) Two of Porter’s ‘five forces’ that determine the attractiveness of an industry are A) Advancedness of technology and bargaining power of suppliers B) Bargaining power of customers and threat of substitution C) Barriers to entry and threat of imitation D) Competitive advantage and rivalry Your answer: 1. B) Bargaining power of customers and threat of substitution Explanation: These are two of the five forces Michael Porter identified that determine the competitive intensity and therefore the attractiveness of an industry. 2) Which of the following is an example of a (type of) leveraged buy-out? A) A venture capital fund invests into a venture in return for 20% of the equity. B) The company’s current management, using some of their own and a lot of bor- rowed money, acquires the company from its current owners. C) Outside managers use their own money to acquire a venture, and then sell it off piece by piece. D) all of the above Your answer: 2. B) The company’s current management, using some of their own and a lot of borrowed money, acquires the company from its current owners. Explanation: This describes a leveraged buy-out (LBO), where a company's existing management buys out the company primarily using borrowed funds. “Entrepreneurship for Students of Information Systems” – Winter 2022/23 February 14, 2023 Page 3 Last Name: First name: Student ID: 3) To measure success in sustainable entrepreneurship, firms can draw on the concept of the bottom-line A) single B) double C) triple D) quadruple Your answer: 3. C) triple Explanation: The triple bottom line concept measures success in terms of financial, social, and environmental impact, reflecting the pillars of sustainable entrepreneurship. 4) The less you want to become dependent on others, the more you should rely on ________ as a key source of financing. A) banks B) bootstrapping C) risk capital D) venture capital Your answer: 4. B) bootstrapping Explanation: Bootstrapping means financing your company's start-up or growth using your own resources, minimizing reliance on external funding and maintaining independence. 5) According to Tina Seelig, if an entrepreneur never fails, that would be a A) good thing, because it would show the entrepreneur did everything right. B) good thing, but it would be because the entrepreneur was very lucky. C) bad thing, because the entrepreneur had not taken enough risk. A) bad thing, because failure is needed to be able to appreciate successes. Your answer: 5. C) bad thing, because the entrepreneur had not taken enough risk. Explanation: Tina Seelig suggests that never failing indicates a lack of risk-taking, which is essential for innovation and growth in entrepreneurship. “Entrepreneurship for Students of Information Systems” – Winter 2022/23 February 14, 2023 Page 4 Last Name: First name: Student ID: Part 2: Short Answer Questions (20 points) In the following, you will be presented six questions, each of which is worth a maximum of four points. Only answer FIVE of these in the space provided below. The exclusive use of bullet points and graphs is acceptable provided that all relevant information is conveyed. 1) Briefly explain key features of the idea of effectuation using the example of Alex Krapp. 2) Explain two benefits of financing via a bank loan in contrast to venture capital. 3) Polarstern is a social venture providing green energy and gas to households in the Munich area. State one reason each for why and for why not this company should be considered an IT start-up. How would you classify it? Why? “Entrepreneurship for Students of Information Systems” – Winter 2022/23 February 14, 2023 Page 5 Last Name: First name: Student ID: 4) “Business plans are no longer necessary in today’s environment.” Briefly state two reasons for why this statement may be incorrect. 5) Name and explain two general insights that follow from the so-called Greiner model of entrepreneurial growth (note how “general” implies that the insights should apply to the entire model). 6) Using the example of U.S. automotive firm Tesla, explain briefly (i.e., one sentence per example is enough) each of the four growth strategies that a firm may follow: penetration, market development, product development, and diversification. 1. Key features of effectuation with Alex Krapp's example: Resource-oriented: Krapp might have started with resources at hand, like his knowledge and network in the surfing community, to develop the Soul-Surf app. Flexible goals: Rather than sticking to a fixed business plan, Krapp possibly adapted his goals based on feedback and opportunities, characteristic of the effectual process. 2. Benefits of bank loan financing vs. venture capital: Control: A bank loan does not dilute ownership or control over the company as venture capital does. Cost: If the company is successful, the total cost of a bank loan can be lower than the cost of equity financing due to venture capital's need for high returns. 3. Polarstern classification: Why not an IT start-up: The core business of providing green energy and gas does not primarily focus on technological innovation in the IT sector. Why consider as IT start-up: If they use significant IT solutions to manage or distribute their services, they might have an IT component. Classification: Best classified as a social enterprise in the green energy sector, possibly with an IT-enabled service component. The primary mission is sustainability, not IT innovation. 4. Importance of business plans: Guidance: A business plan provides a roadmap, helping entrepreneurs set goals, plan for growth, and manage risks. Attracting investors: Investors often require a detailed business plan to understand the venture's strategy, market, and financial forecasts. 5. General insights from Greiner's model: Predictable growth phases: Organizations go through distinct phases of growth, each characterized by a period of expansion followed by a crisis that demands change. Adaptability and management change: Success hinges on the ability to adapt and evolve management practices and strategies in response to the challenges faced at each phase of growth. 6. Tesla's growth strategies: Penetration: Increasing sales of existing electric vehicle models in current markets by improving production efficiency and marketing. Market Development: Expanding into new geographical markets, such as opening stores and charging stations in new countries. Product Development: Launching new models like the Cybertruck and Roadster to cater to different customer preferences and needs. Diversification: Venturing into solar energy products and services, creating a broader energy solutions ecosystem. “Entrepreneurship for Students of Information Systems” – Winter 2022/23 February 14, 2023 Page 6 Last Name: First name: Student ID: Part 3: Long Essay (30 points) Answer ONE out of the following TWO questions. While the use of bullets and graphs is acceptable, to get full marks, you will need to write an actual short essay. Be focused and stick to the material covered in the course including lecture notes, discussions, readings or textbooks. Please take your time before selecting which questions to answer and think about how to structure your response before you begin writing. Finally, note that only what is legible can be marked in your favor. Option 1: Explain the elements of a business model according to Alexander Osterwalder. Apply the concept to the sports-related business idea of the start-up “HIGGS” you got to know in one of the lectures. In doing so, show how the elements of the business model are interlinked according to Osterwalder, and in which order they should be considered. Option 2: The TUM hyperloop project team has asked you to join them in order to support them in bringing this idea to market, so that all of you can benefit (financially) from it. Applying the concept of “Profiting from Innovation” by David Teece, what would your commercialization strategy for this new product look like? Why? Essay Option 1: Business Model Elements According to Alexander Osterwalder Applied to "HIGGS" Introduction Brief overview of Alexander Osterwalder's Business Model Canvas (BMC). Introduction to "HIGGS" and its relevance in the sports industry. Business Model Canvas: Overview Definition and importance of BMC in startup planning and strategy. Brief introduction to the nine elements of BMC. "HIGGS": Application of BMC 1. Customer Segments Identify "HIGGS" target customers within the sports industry. Explain the needs and problems of these segments that "HIGGS" aims to solve. 2. Value Propositions Define the unique value "HIGGS" offers to its customer segments. How "HIGGS" differentiates itself in the sports market. 3. Channels Outline the channels through which "HIGGS" communicates with its customers and delivers its value proposition. 4. Customer Relationships Describe how "HIGGS" establishes and maintains relationships with its customers. The role of customer service and community building. 5. Revenue Streams Detail how "HIGGS" generates revenue from its value propositions. Different revenue models applicable to "HIGGS". 6. Key Resources Identify the main resources "HIGGS" requires to operate effectively. Include physical, intellectual, human, and financial resources. 7. Key Activities The essential activities "HIGGS" must perform to deliver its value proposition. Include product development, marketing, and sales. 8. Key Partnerships Highlight strategic partnerships crucial for "HIGGS". How these partnerships support the business model. 9. Cost Structure Outline the major cost drivers for "HIGGS". The relationship between the cost structure and the value proposition. Interlinkage of BMC Elements Discuss how the nine elements of BMC are interlinked within the context of "HIGGS". Importance of considering elements in a specific order for coherence and efficiency. Conclusion Recap the application of BMC to "HIGGS" and the interlinkage of its elements. Final thoughts on the strategic importance of understanding and applying BMC for startups. Essay Option 2: Commercialization Strategy for TUM Hyperloop Introduction Overview of the TUM Hyperloop project and its innovative aspects. Brief introduction to "Profiting from Innovation" by David Teece. Profiting from Innovation: Key Concepts Definition and significance of profiting from innovation. Overview of Teece's framework (appropriating value, complementary assets, and timing). Commercialization Strategy for TUM Hyperloop 1. Appropriating Value Discuss intellectual property (IP) strategy for TUM Hyperloop (patents, trademarks). Importance of IP in maintaining competitive advantage. 2. Complementary Assets Identify necessary complementary assets (manufacturing capabilities, distribution networks, after-sales support). Strategy for acquiring or partnering to access these assets. 3. Timing Analyze the market readiness and timing for introducing TUM Hyperloop. Considerations for first-mover advantages or disadvantages. 4. Market Entry Strategy Selecting the right market entry strategy (direct sales, licensing, joint ventures). Rationale behind the chosen strategy based on Teece's model. 5. Business Model Adaptation Adaptation of the business model to support innovation commercialization. Relationship between business model and commercialization strategy. Why This Strategy? Justification of the chosen commercialization strategy based on Teece's principles. Expected outcomes and potential challenges. Conclusion Summary of the commercialization strategy for TUM Hyperloop. Final thoughts on the importance of aligning innovation with a solid commercialization strategy to ensure financial benefits. Introduction Briefly introduce the TUM Hyperloop project and its significance. Mention the objective of the essay: to outline a commercialization strategy based on David Teece’s concept of "Profiting from Innovation." Understanding "Profiting from Innovation" Explain David Teece's concept briefly: the importance of capturing value from innovations through effective commercialization strategies. Highlight the three main components of Teece’s framework: (1) choosing the right business model, (2) securing intellectual property rights, and (3) leveraging complementary assets. Commercialization Strategy for the TUM Hyperloop Project Choosing the Right Business Model Direct Sales vs. Licensing: Argue for a business model that aligns with the nature of Hyperloop technology. Considering its complexity and need for infrastructure, a direct sales model to governments or large infrastructure companies might be more appropriate than licensing. Service Provision: Discuss the potential of offering the Hyperloop as a service, where the project team maintains ownership and control over the technology and infrastructure, providing transportation services to users. Securing Intellectual Property Rights Patents: Emphasize the importance of patenting the technology to protect the innovation and create barriers to entry for competitors. Trade Secrets and Know-how: Discuss the value of keeping certain technological advancements as trade secrets to maintain competitive advantage. Leveraging Complementary Assets Strategic Partnerships: Highlight the need for partnerships with companies possessing complementary assets, such as infrastructure construction firms, technology providers, and government bodies. Supply Chain and Distribution: Outline the importance of developing a robust supply chain and distribution network to support the deployment of Hyperloop technology. Implementing the Strategy Market Analysis and Entry Strategy: Discuss the importance of identifying initial target markets (e.g., countries with high demand for rapid transportation solutions) and entry strategies (e.g., pilot projects, public-private partnerships). Regulatory Considerations: Address the need to navigate regulatory landscapes, securing approvals, and meeting safety standards. Challenges and Risk Management Technological Uncertainties: Acknowledge the technological risks and the strategies to mitigate them, including continuous R&D and pilot testing. Market Adoption: Discuss potential market adoption challenges and strategies to overcome them, such as public awareness campaigns and demonstrating the technology’s benefits. Conclusion Summarize the key points of the commercialization strategy based on Teece’s framework. Emphasize the potential impact of the TUM Hyperloop project on transportation and its ability to create value for the project team and society. I am choosing Option. “Entrepreneurship for Students of Information Systems” – Winter 2022/23 February 14, 2023 Page 7 Last Name: First name: Student ID: “Entrepreneurship for Students of Information Systems” – Winter 2022/23 February 14, 2023 Page 8 Last Name: First name: Student ID: TECHNISCHE UNIVERSITÄT MÜNCHEN TUM School of Management Professur für Strategic Entrepreneurship Prof. Dr. Oliver Alexy Entrepreneurship for Students of Information Systems Summer Term 2015 (resit) July 23, 2015 Last Name: First Name: Student ID: Semester: Degree program: Signature: _ Instructions – PLEASE READ CAREFULLY Please ensure that your exam contains 8 (eight) pages. If not, ask for another copy. To respond to the exam questions, write exclusively on the exam paper. If required, please write on the back. Always clearly signal which question is being answered. Do not separate the pages of the exam paper. Write your name and student ID on all pages in the space provided. You are allowed to use an English-[Your native language] and, if different, an English-German dictionary as well as a non-programmable calculator Any exams offence such as an attempt at copying from your neighbor or the posses- sion of a crib sheet or other notes will lead to a fail grade (“nicht ausreichend” – 5,0). Keeping a cell phone or smartwatch on your person, even if fully switched off, is con- sidered an exams offence, and will result in a fail grade. If you do not wish to leave your mobile phone or smartwatch in your bag, please leave it with us at the front. You have 60 (sixty) minutes available. If you need to take a toilet break etc., you must leave all exam-related materials with one of the invigilators (“Klausuraufsicht”). Other than that, you are not allowed to leave the room until the end of the exam. Best of Luck! Question 1 2 3 Total Points 10 20 30 60 achieved Grade “Entrepreneurship for Students of Information Systems” – Summer 2015 (resit) July 23, 2015 Page 2 Last Name: First name: Student ID: Part 1: Multiple choice (10 points) In the following, you will be presented five multiple choice questions. Each question is worth 2 points if answered correctly (incorrect answers will not be punished). For each question, only one correct answer exists. For each question, write the correct answer in the space provided below the question. 1) Following Steve Blank, the area that is most likely cause to firm failure relates most strongly to which function of the firm? A) Marketing B) Finance C) R&D D) HR Your answer: 1. A) Marketing Explanation: Steve Blank emphasizes that the root cause of many startup failures is not getting the product-market fit right, which is a marketing function. 2) The concept of network effects can be drawn on to explain A) the source of first-mover advantage. B) the existence of winner-takes-all-markets. C) the evolution and success of companies like Skype or Facebook. D) all of the above. Your answer 2. D) all of the above. Explanation: Network effects explain the competitive advantage gained from being first to market, the dominance seen in winner-takes-all markets, and the success of platforms like Skype and Facebook due to increasing value with more users. “Entrepreneurship for Students of Information Systems” – Summer 2015 (resit) July 23, 2015 Page 3 Last Name: First name: Student ID: 3) The less you want to become dependent on others, the more you should rely on ________ as a key source of financing. A) banks B) bootstrapping C) risk capital D) venture capital investors Your answer: 3. B) bootstrapping Explanation: Bootstrapping involves using your own resources for funding, which reduces dependency on external financiers and allows for greater independence. 4) In the Teece model, a patent is a A) complementary asset B) formal appropriation mechanism C) informal appropriation mechanism D) life cycle phase Your answer: 4. B) formal appropriation mechanism Explanation: In the Teece model, a patent is considered a formal mechanism for appropriating the benefits from innovation, protecting the technology legally from competitors. 5) The key drivers of entrepreneurial intent are perceptions of A) desirability and feasibility B) desirability and profitability C) feasibility and profitability D) none of the above 5. A) desirability and feasibility Explanation: The key drivers of entrepreneurial intent include the perceived desirability of starting a business and the perceived feasibility or likelihood of being successful. “Entrepreneurship for Students of Information Systems” – Summer 2015 (resit) July 23, 2015 Page 4 Last Name: First name: Student ID: Part 2: Short Answer Questions (20 points) In the following, you will be presented five questions, each of which is worth a maximum of four points – please answer all of these in the space provided below. The exclusive use of bullet points and graphs is acceptable provided that all relevant information is conveyed. 1) Name and explain two environmental characteristics that are more important to start- ups in IT industries than to start-ups in other industrial sectors. 2) Briefly explain the concept of effectuation by drawing on elements of the guest lec- ture by Alex Krapp, founder of soul-surf.com and congreet. “Entrepreneurship for Students of Information Systems” – Summer 2015 (resit) July 23, 2015 Page 5 Last Name: First name: Student ID: 3) Drawing from stories we learned about Dean Shepherd’s father and Janice Fraser’s first start-up, name and explain two difficulties that may arise when ventures end. 4) Name and explain two techniques to generate new ideas. 5) Name and explain two difficulties that may arise during venture growth other than the venture needing more money. 1. Environmental characteristics crucial for IT startups: Rapid technological change: IT industries evolve quickly, necessitating startups to continuously innovate and adapt to new technologies. Network effects: The value of an IT product or service increases as more people use it, making early user acquisition and growth critical for success. 2. Concept of effectuation with reference to Alex Krapp: Start with what you have: Krapp utilized his personal interests and networks in surfing and event management to create Soul-Surf and Congreet. Flexible to opportunities: Instead of a rigid business plan, Krapp likely adapted his ventures based on available resources and opportunities, embodying the effectual approach to entrepreneurship. 3. Difficulties when ventures end, from Dean Shepherd and Janice Fraser: Emotional impact: Entrepreneurs like Fraser face significant emotional di

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