Business Studies - Term 1 - Week 10

Imagine Thandi’s spaza shop in Khayelitsha suddenly loses customers after load-shedding hits during peak hours. She notices fewer people buying cold drinks and bread. This is a business problem: a situation that threatens the shop’s success. In South Africa, businesses face issues like unreliable electricity, rising costs, or tough competition from big supermarkets. The key is to spot the difference between a problem (e.g., falling sales) and a symptom (e.g., fewer customers). Many learners confuse the two, thinking the symptom is the problem. But symptoms are signs—like a fever—while the problem is the cause, such as an infection. In business, always look deeper: is the real problem load-shedding, poor marketing, or something else? Identifying the correct problem is the first step to finding a solution. If you only treat the symptom, the problem will return. Always ask yourself: what is really causing this issue in the business?

Sipho runs a taxi business in Polokwane. He notices his drivers are often late. At first, he thinks they are lazy. But after talking to them, he learns that traffic jams caused by roadworks are making them late. The root cause is not the drivers’ attitude, but external delays. In business studies, the root cause is the underlying reason for a problem, not just what you see on the surface. Many learners mistakenly stop at the first explanation. Instead, ask ‘why’ several times. For example, if a Durban bakery’s bread is not selling, is it because of price, quality, or a new competitor? Digging deeper helps businesses fix the real issue, not just the symptoms. If you stop at the surface, you might waste money fixing the wrong thing. Always check your facts and talk to staff or customers to get the full picture.

Lerato’s hair salon in Soweto struggles when water cuts hit. She loses clients who can’t get their hair washed. Instead of just complaining, she installs a water tank and offers dry styling. Practical solutions fit the business’s resources and local realities. In South Africa, solutions must consider things like load-shedding schedules, local suppliers, and customer needs. A common misconception is that solutions must be expensive or high-tech. Often, simple changes—like changing business hours or offering new services—work best. Always check if your solution matches the business’s size, budget, and environment. For example, a small business may not afford a generator, but could adjust its hours or use alternative products. The best solutions are those that can be put into action quickly and meet the needs of both the business and its customers.

Step 1: Read the scenario carefully. A minibus taxi owner in Durban finds his daily earnings dropping. Step 2: Identify the symptom. The symptom is lower earnings. Step 3: Ask ‘why’ questions. Why are earnings down? Fewer passengers are using his taxis. Step 4: Dig deeper. Why are there fewer passengers? A new bus service started on the same route. Step 5: Identify the root cause. The root cause is increased competition from the bus service. Step 6: Propose a solution. The taxi owner can offer a loyalty card or improve service quality. Final answer: The real problem is competition, not just low earnings. Sanity check: The solution addresses the root cause, not just the symptom.

Step 1: Read the scenario. A Soweto bakery’s bread sales have dropped by 30% in two months. Step 2: Identify the problem. The problem is falling bread sales. Step 3: Analyse possible causes. Is it price, quality, or competition? The owner surveys customers and finds that a new supermarket is selling cheaper bread. Step 4: Propose a solution. The bakery can introduce a loyalty programme or bake specialty breads. Step 5: Test the solution. Track bread sales for the next month and collect customer feedback. Final answer: The bakery should try a loyalty programme and measure if sales improve. Sanity check: The solution is practical and measurable.

Question: Lerato’s cellphone repair shop in Soweto is getting fewer customers. Why? Model thinking: First, check if it’s a symptom or a root cause. Fewer customers is a symptom. Ask ‘why’. Maybe a new repair shop opened nearby, or perhaps her prices are too high. Worked response: The real problem is likely increased competition or pricing. Similar question: Sipho’s internet café in Durban is losing customers. What could be the root cause? Answer: Load-shedding is causing frequent power cuts, making it hard for customers to use the computers. This affects the business’s ability to serve clients and leads to a drop in customer numbers.

Question: Ahmed’s fruit stall in Polokwane is losing sales during hot afternoons. Model thinking: Is it the weather, location, or product? Maybe the fruit spoils in the heat, or customers avoid the stall because it’s too hot. Worked response: Ahmed can buy a cooler box or move his stall to a shaded area to keep fruit fresh and attract customers. Similar question: Thandi’s fast-food stand in Khayelitsha loses customers during load-shedding. What could she do? Answer: She could offer pre-cooked meals or snacks that don’t need electricity, or adjust her business hours to avoid times when there is no power. This way, she can keep serving customers even during outages.

1. List two common business problems faced by South African small businesses, such as load-shedding or competition from larger stores. 2. Name one symptom (like fewer customers) and one root cause (such as unreliable electricity) for a drop in sales. 3. State why it’s important to identify the root cause before acting, using a short example from a local business.

1. Analyse why a tuckshop in Mthatha might lose customers after a new mall opens nearby. Consider factors like convenience, pricing, and variety. 2. Propose two practical solutions for a hair salon affected by water shortages, focusing on affordable and realistic options. 3. Explain how a business can test if its solution is working, mentioning at least one way to measure results, such as tracking sales or getting customer feedback.

1. A Durban minibus taxi service faces declining profits due to rising petrol prices and competition. Analyse the root causes and suggest two solutions that fit the business’s resources. 2. Justify why a business should measure the impact of its solutions, using an example from a South African context. 3. Compare the effectiveness of high-cost versus low-cost solutions for a small business, giving reasons for your answer.

• A symptom is the underlying reason; a root cause is the visible sign.
• A symptom is a visible sign; a root cause is the underlying reason.
• Both are the same thing.
• A root cause is always outside the business.

Answer: A symptom is a visible sign; a root cause is the underlying reason.

Many confuse symptoms with causes. Symptoms are what you see; root causes are the hidden reasons behind them.

• Close the shop permanently
• Install a generator or adjust business hours
• Ignore the problem
• Raise prices for all products

Answer: Install a generator or adjust business hours

Practical solutions fit the business’s resources. Closing or ignoring the problem is not realistic; raising prices may drive away customers.

• 20%
• 30%
• 40%
• 60%

Answer: 30%

The decrease is 60 loaves. 60 divided by 200 is 0.3, or 30%. Many learners forget to use the original number as the base.

• To see if the solution works and improves results
• To impress customers
• Because it is required by law
• To avoid paying taxes

Answer: To see if the solution works and improves results

Testing checks if the solution solves the problem. The other options are not valid business reasons.

• New competitor in the area
• Load-shedding affecting business hours
• Customers complaining about high prices
• The shop’s sign is faded

Answer: Customers complaining about high prices

Complaints are a symptom, not a root cause. The other options are possible root causes.