Perry and Gary are two brilliant students taking Computer Science at one of the universities in Hong Kong. Possessing many entrepreneurial characteristics, they are going to set up their own business in the form of a partnership in the area of computer services. Without formal education in the business field, they asked a business consultant, Nancy, about the idea of setting up their business. Perry started, As there are more high-tech and IT applications in the market, high demand for computer services will emerge in many industries. There will be a great potential for our business. Gary added, In order to grasp the opportunities, we should set up our business and expand it as quickly as possible because the competition will be getting keen. Nancy, how can we analyze the competition in the industry? I am also worried about the sources of capital for our start-up and expansion as well. Nancy responded, You can use the Five-force Model to analyze the competition and determine the attractiveness of the industry. Regarding the capital source, I propose forming a private limited company rather than a partnership. She further suggested that a comprehensive business plan is essential for raising capital for their business. Gary was puzzled and did not know what key elements should be included in a comprehensive business plan. He further expressed his concern and said, Although we have good technical skill, being the owner-managers of the new firm, I guess we also need other managerial skills. Both Perry and Gary were pleased with the discussion and eager to learn how to write up the business plan.

(a) Identify any forces in the Five-force Model for analyzing the competition faced by Perry and Gary. (10 marks)

2. (b) With reference to any three characteristics of a private limited company, justify Nancys suggestion of setting up the business in the form of a private limited company rather than a partnership. (9 marks)

3. (c) Suggest the key elements that Perry and Gary should include in a comprehensive business

plan. (16 marks)

(d) Apart from technical skills, explain to Perry and Gary the other two managerial skills. (5 marks)