Business Failure

Question 1

What are the main reasons to business failure?

Answer 1

• not understanding consumers
• failure to differentiate
• poor leadership
• not having a big enough revenue

Question 2

What are the three internal causes of business failure?

Answer 2

• marketing failure
• financial failure
• systems or operations failure

Question 3

Explain marketing failure?

Answer 3

• not understanding changes in society, or what consumers are looking for
• poor decisions relating to marketing mix

Question 4

Explain financial failure?

Answer 4

• cash flow problems

- poor money management

Question 5

Explain systems or operations failure?

Answer 5

• if IT systems dont provide the right people within the business with info they need
• if systems break down demand may not be met and customers will be lost

Question 6

What are the four causes of external business failure?

Answer 6

• changes in tech
• new competitors
• economic change
• behaviours of banks

Question 7

Explain changes in tech?

Answer 7

• new advancements in the market may destroy sales as it can be produced at a better price, quality or standard

Question 8

Explain new competitors?

Answer 8

• a new rival in the market can gain a large market share and sales can be lost

Question 9

Explain economic change?

Answer 9

pirce elasticiy, in recession luxury goods may dry up

Question 10

Explain the behaviour of banks?

Answer 10

• interest rates

- not supplying credit