(Mt) – MGT 402 Saudi Electronic University Business Management Questions

Unformatted Preview
Penn Brewery Should an entrepreneur buy back the brewery that he launched nearly a quarter-century before? Tom Pastorius and his wife Mary Beth started Penn Brewery, an authentic German microbrewery in Pittsburgh, Pennsylvania, in 1986. They built the brewery into a successful business, pmduring more than l5,000 barrels a year and generating annual sales of $3.5 million. Along the way, their microbrewery won 14 medals at the Great American Beer Festival and built a base of devoted customers for its brands, which included Penn Pilsner, Penn Oktoberfest, and others. They also added a Germanthemed restaurant that Mary Beth managed. In 2003, Tom and Mary Beth, both approaching 60, decided to cash out and sold the brewery to Birchmere Capital, a local private equity firm. Tom retained 2ß percent ownership and agreed to stay on as president of the company for 5 years. He had lived up to his contract but was miserable working for the new owners, who made many significant changes to the company’s strategy. “I am not a good employee,” says Tom. “I’m a solo act.” Not only did Birchmere Capital close the brewery’s restaurant, but it also decided to outsource production of beer to the Lion Brewery in nearby Wilkes-Barre and close Penn’s brewing operation. The moves proved to be disastrous; oncedevoted customers were deported, and sales tumbled. “It was so hard to sit back and watch this place sink,” says Tom, who was becoming bored with retirement. Then Birchmere offered to sell the brewery back to Pastorius for a fraction of what they had paid him for it a few years before. Tom was ready to buy the brewery back and restore it to its former grandeur, but convincing Mary Beth would take some doing. She had been instrumental in its sssssss but told Tom that she had no intention of going back to it. “It’s too risky at our age (now 65),” she says. “We don’t have the luxury of time.” Besides, Mary Beth had launched a retirement business of her own, a company that restores historic buildings. Tom, however, could not get rid of the idea of owning Penn Brewery again. He began working clandestinely on a business plan preparing a risk-benefit analysis. The principal risks he identified included the brewery’s $1 million debt and the tarnished brand name, and for that, he would be buying back his former business at age 65. However, he was still very energetic and had the experience necessary to turn around the foundering brewery. He was confident that he could restore the luster to the Penn Brewery name by returning beer production to the Victorian-style red brick building in which he had launched the company years before. After weeks of candid discussions, Mary Beth told Tom, “If you want to do it, you are crazy, but keep me out of it.” Soiirres: Based on Cristina Ron valis. Czu Study: Penn Brewery.” hie., 2iily— August 2ß10. pp. 71—74: ’the Pennsylvania Breuing Company.” ‫المملكة العربية السعودية‬ ‫وزارة التعليم‬ ‫الجامعة السعودية اإللكترونية‬ Kingdom of Saudi Arabia Ministry of Education Saudi Electronic University College of Administrative and Financial Sciences Assignment 2 MGT402 (3rd Term 2022-2023) Deadline: 03/06/2023 @ 23:59 Course Name: Entrepreneurship and small business Course Code: MGT402 Student’s Name: Semester: 3rd CRN: Student’s ID Number: Academic Year: 1444 H (2022-2023)3rd Term For Instructor’s Use only Instructor’s Name: Students’ Grade: /15 Level of Marks: High/Middle/Low Instructions – PLEASE READ THEM CAREFULLY • • This assignment is an individual assignment. Due date for Assignment 2 is 03/06/2023 • The Assignment must be submitted only in WORD format via allocated folder. • Assignments submitted through email will not be accepted. • Students are advised to make their work clear and well presented; marks may be reduced for poor presentation. This includes filling your information on the cover page. • Students must mention question number clearly in their answer. • Late submission will NOT be accepted. • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. • All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism). • Submissions without this cover page will NOT be accepted. ‫المملكة العربية السعودية‬ ‫وزارة التعليم‬ ‫الجامعة السعودية اإللكترونية‬ Kingdom of Saudi Arabia Ministry of Education Saudi Electronic University College of Administrative and Financial Sciences Entrepreneurship and small business ASSIGNMENT -2 Submission Date by students: Before the end of Week- 11th Place of Submission: Students Grade Centre Weight: 15 Marks Learning Outcome: 1. Outline the solid understanding of the potential of entrepreneurs in today’s competitive business world. 2. Describe the place of small business in history and explore the strengths and weaknesses of small business. 3. Demonstrate the ability to deliver and communicate marketing messages in a coherent and professional manner. Assignment Workload: This assignment is an individual assignment. Critical Thinking Entrepreneurship, among others, as a phenomenon, whose main required capital is creativity, bravery, and using opportunities, is the most important potential source of economic growth, increasing productivity and producing wealth. Entrepreneurship is based on opportunities rather than employing resources (Stevenson and Gumpert, 32:1991). Students are supposed to read the attached Case -Penn Brewery. Based on your understanding of the case and basic concepts of Entrepreneurship. Answer the following question: 1. Explain why should Tom Pastorius buy Penn Brewery? (3 marks) 2. “I’m not a good employee.” It’s a statement given by Tom Pastorius , What does he mean? Do you think the same is true of most entrepreneurs? (4 marks) 3. Discuss the challenges does selling the businesses they create poses for entrepreneurs.? (4 marks) 4. What steps should he take before closing the deal? If Pastorius decides to buy the brewery? (4 marks) The Answer must follow the outline points below: • Each answer should be within the range of 300 to 350-word counts. • Reference Note: You can support your answer with the course book. You can use secondary sources available on internet. Kingdom of Saudi Arabia Ministry of Education Saudi Electronic University ‫المملكة العربية السعودية‬ ‫وزارة التعليم‬ ‫الجامعة السعودية اإللكترونية‬ College of Administrative and Financial Sciences Answer: 1. 2. 3. 4.