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Objective

The prime objective of this activity is to make the students familiar with the causes of success and failure of business.

Learning outcome of the activity

After attempting this activity, the students will be able to:
1. Identify the factors that can bring success or failure for small businesses in Pakistan.
2. Recommend the measure to avoid such pitfalls that can cause failure in businesses.
3. Solve a case study

Case study

After the death of Mr. Nadeem Khan, his business of confectionery was divided among his two sons, Mr. Khalel Khan and Mr. Raheem Khan. Both were interested in carrying the brand name of Eastren’s Bakers but Khalel was smart enough to carry the brand name and Raheem started the same business with the name of Fresh Bakers in the same city. From the day one, Mr. Khalel started enjoying good sales with less effort as having same salespersons working with his father whereas Mr. Raheem was facing difficulty to hunt good professional bakers. He was less interested in hiring previous salespersons. In the beginning, Mr. Khalel offered same
confectionery items but Mr. Raheem introduced some more items and for such purposes he took loan from his friend.
Raheem also tried to set a plant for dry milk but failed to manage the supplies as his actual cost was 50% higher as compared to estimated cost. It was a big loss. Mr. Khalel, as he has worked with his father, was having more information about the cost of raw material and machines thus avoided diversification at the initial stage. Now Mr. Raheem is getting advices from friends and 

relatives to get out of this situation whereas Mr. Khalel is enjoying good returns.

Requirement:

Solve the case study while answering following questions:

Q1. Identify any five factors that bring failure for Mr. Raheem. (5 Marks)
Q2. Advice Mr. Raheem, how he can get out of this situation? (5 Marks)

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MGT211_Assignment_Solutoin

Right Solution

Attachments:

He should pay off his debts first should increase his sales by the  current available products in his business then he should hire his previous experienced salesman should gain the knowledge of market to become familiar with new brands,sales procedures, purchasing, expenses,production processes details and should create his relationship with dealers and wholesalers etc. The factors that became cause of the failure in business are the lack of market knowledge, at initial stage diversification of plant and higher cost of supplies in business due to lack of experience, due to unavailability of sale staff, poor management and wastage of money by ignoring the items giving by brother. 

 

 

     ASSIGNMENT No.

1

 

Assignment Title

Success and Failure of Business

Course Title

Introduction to Business

Course Number

MGT211

 

 

Submission Date

21-May-2014

Due Date

21-May-2014

 

 

Student Name

Imran Ashraf

Student ID

Mc130400005

Semester/Year

2nd/ 2014

Instructor

Dr. Nadeem Bhatti

 

 

Case study 

After the death of Mr. Nadeem Khan, his business of confectionery was divided among his two sons, Mr. Khalel Khan and Mr. Raheem Khan. Both were interested in carrying the brand name of Eastren’s Bakers but Khalel was smart enough to carry the brand name and Raheem started the same business with the name of Fresh Bakers in the same city. From the day one, Mr. Khalel started enjoying good sales with less effort as having same salespersons working with his father whereas Mr. Raheem was facing difficulty to hunt good professional bakers. He was less interested in hiring previous salespersons. In the beginning, Mr. Khalel offered same confectionery items but Mr. Raheem introduced some more items and for such purposes he took loan from his friend. Raheem also tried to set a plant for dry milk but failed to manage the supplies as his actual cost was 50% higher as compared to estimated cost. It was a big loss. Mr. Khalel, as he has worked with his father, was having more information about the cost of raw material and machines thus avoided diversification at the initial stage. Now Mr. Raheem is getting advices from friends and relatives to get out of this situation whereas Mr. Khalel is enjoying good returns. 

Requirements

 

Q1. Identify any five factors that bring failure for Mr. Raheem. (5 Marks) 
Q2. Advice Mr. Raheem, how he can get out of this situation? (5 Marks)


Solution


The Main Causes Of Business Failure

(1)  Lack of market knowledge

The major factor is that Mr. Raheem does not have any market knowledge. He was unable to run business as there is no proper previous knowledge on that business.

(2)  No proper experience

As mentioned above he has no personal experience as he can’t properly run the business also he change the brand name of the business which causes difficulty for him to compete with the ever changing business environment.

 (3) Poor management

Mr. Raheem faces the lack of management control which is another major reason why his business finds themselves in difficulties. In fact all businesses need to have a strategic plan to ensure that they are operating in the best markets with correct margins.

 (4) Lack of trained staff

As mentioned in above scenario that Mr. Raheem has no trained salesperson which is the major cause of the failure as salesperson are most important for the outside and inside transactions of a business.

  (5) No planning

Planning is the key to success. If a business cannot be planned properly it may lost all what they need.

 

Following advices that may be helpful in this regard are:

(1)  Have a plan

For a successful business one important thing is planning he should develop a sound planning. If you have a business plan update it to reflect you current goals.

(2)  Delegate

Simply a delegate is a person who speaks on behalf of an organization at a meeting or conference between organizations of the same level.  Is quite tough for business owners to give up control, but delegation is extremely essential for the growth of a business.

(3)  Hire trained employees

No doubt employees or salesperson are very important for the real growth of business. If you have not a trained staff you should give them a proper training.

(4)  Take action

It is highly says that don’t put your business in a drawer and forget about it. Set your time and give special attention to your business and if you are not in doing good one business you should not start over another business.

 (5) Get the professional help

Just because you are the owner of the business doesn’t mean you are expert in everything. If you are not getting the help of professionals you are wasting both your time and money.

 

 

MGT211_Assignment_01_Solution

see the attached file please

Attachments:

He should pay off his debts first should increase his sales by the  current available products in his business then he should hire his previous experienced salesman should gain the knowledge of market to become familiar with new brands,sales procedures, purchasing, expenses,production processes details and should create his relationship with dealers and wholesalers etc. The factors that became cause of the failure in business are the lack of market knowledge, at initial stage diversification of plant and higher cost of supplies in business due to lack of experience, due to unavailability of sale staff, poor management and wastage of money by ignoring the items giving by brother. 

Case Study

After the death of Mr. Nadeem Khan, his business of confectionery was divided among his two sons, Mr. Khalel Khan and Mr. Raheem Khan. Both were interested in carrying the brand name of Eastren’s Bakers but Khalel was smart enough to carry the brand name and Raheem started the same business with the name of Fresh Bakers in the same city. From the day one, Mr. Khalel started enjoying good sales with less effort as having same salespersons working with his father whereas Mr. Raheem was facing difficulty to hunt good professional bakers. He was less interested in hiring previous salespersons. In the beginning, Mr. Khalel offered same confectionery items but Mr. Raheem introduced some more items and for such purposes he took loan from his friend.

Raheem also tried to set a plant for dry milk but failed to manage the supplies as his actual cost was 50% higher as compared to estimated cost. It was a big loss. Mr. Khalel, as he has worked with his father, was having more information about the cost of raw material and machines thus avoided diversification at the initial stage. Now Mr. Raheem is getting advices from friends and relatives to get out of this situation whereas Mr. Khalel is enjoying good returns.

Requirement:

Solve the case study while answering following questions:

Q1. Identify any five factors that bring failure for Mr. Raheem. (5 Marks)

Answer:

There are many factors that involves in failure of business of Mr. Raheem but five major factors are;

(1)  Lack of market knowledge

The major factor is that Mr. Raheem does not have any market knowledge. He was unable to run business as there is no proper previous knowledge on that business.

(2)  No proper experience

As mentioned above he has no personal experience as he can’t properly run the business also he change the brand name of the business which causes difficulty for him to compete with the ever changing business environment.

      (3) Poor management

Mr. Raheem faces the lack of management control which is another major reason why his business finds themselves in difficulties. In fact all businesses need to have a strategic plan to ensure that they are operating in the best markets with correct margins.

       (4) Lack of trained staff

As mentioned in above scenario that Mr. Raheem has no trained salesperson which is the major cause of the failure as salesperson are most important for the outside and inside transactions of a business.

       (5) No planning

Planning is the key to success. If a business cannot be planned properly it may lost all what they need.

Q2. Advice Mr. Raheem, how he can get out of this situation? (5 Marks)

Following advices that may be helpful in this regard are:

(1)  Have a plan

For a successful business one important thing is planning he should develop a sound planning. If you have a business plan update it to reflect you current goals.

(2)  Delegate

Simply a delegate is a person who speaks on behalf of an organization at a meeting or conference between organizations of the same level.  Is quite tough for business owners to give up control, but delegation is extremely essential for the growth of a business.

(3)  Hire a trained employees

No doubt employees or salesperson are very important for the real growth of business. If you have not a trained staff you should give them a proper training.

(4)  Take action

It is highly says that don’t put your business in a drawer and forget about it. Set your time and give special attention to your business and if you are not in doing good one business you should not start over another business.

 (5)Get the professional help

Just because you are the owner of the business doesn’t mean you are expert in everything. If you are not getting the help of professionals you are wasting both your time and money.

After the death of Mr. Nadeem Khan, his business of confectionery was divided among his two sons, Mr. Khalel Khan and Mr. Raheem Khan. Both were interested in carrying the brand name of Eastren’s Bakers but Khalel was smart enough to carry the brand name and Raheem started the same business with the name of Fresh Bakers in the same city. From the day one, Mr. Khalel started enjoying good sales with less effort as having same salespersons working with his father whereas Mr. Raheem was facing difficulty to hunt good professional bakers. He was less interested in hiring previous salespersons. In the beginning, Mr. Khalel offered same confectionery items but Mr. Raheem introduced some more items and for such purposes he took loan from his friend.

Raheem also tried to set a plant for dry milk but failed to manage the supplies as his actual cost was 50% higher as compared to estimated cost. It was a big loss. Mr. Khalel, as he has worked with his father, was having more information about the cost of raw material and machines thus avoided diversification at the initial stage. Now Mr. Raheem is getting advices from friends and relatives to get out of this situation whereas Mr. Khalel is enjoying good returns.

Requirement:

Solve the case study while answering following questions:

Q1. Identify any five factors that bring failure for Mr. Raheem. (5 Marks)

Q2. Advice Mr. Raheem, how he can get out of this situation? (5 Marks)

solution::

Q1. Identify any five factors that bring failure for Mr. Raheem?

answer:

1.Poor inventory management

2.Poor location

3.Personal use of business funds

4.Lack of experience

5.low quantity of material

 

Q2. Advice Mr. Raheem, how he can get out of this situation?

answer:

1.Project a positive business image.

2.Level the playing field with technology.

3.Invest in yourself.

4.Take time off

5.Plan everything.

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