Business Studies - Term 2 - Week 3

Imagine Sipho’s spaza shop in Khayelitsha. Suddenly, his sales drop after load-shedding increases. He notices fewer customers and spoiled stock. Many South African businesses face similar challenges—load-shedding, transport strikes, or rising costs. A business problem is any situation that threatens a company’s success or survival. It could be falling profits, unhappy staff, or unreliable suppliers. Spotting these problems early is vital. For example, if a minibus taxi business in Polokwane keeps arriving late, the problem might not just be traffic—it could be poor scheduling or vehicle breakdowns. A common misconception is thinking the first sign of trouble (like late arrivals) is the problem itself. In reality, it’s often just a symptom. We must look deeper to find the real cause.

Lerato works at a Durban bakery. She notices customers complaining about stale bread. The manager thinks the problem is the staff not baking enough. But when they investigate, they find the delivery truck often arrives late due to roadworks. The stale bread is a symptom, not the root cause. The real issue is unreliable delivery. In business studies, symptoms are the visible effects (like complaints or losses), while root causes are the underlying reasons (like late deliveries or poor planning). Solving only the symptom is like putting a plaster on a deep wound—it might hide the issue, but it won’t heal it. Always ask: What is really causing this problem? This approach saves time and money, and leads to lasting solutions.

Ahmed runs a cellphone repair shop in Mthatha. When customers stop coming, he follows a problem-solving process: (1) Identify the problem, (2) Gather information, (3) Analyse the causes, (4) Develop possible solutions, (5) Choose the best solution, (6) Implement and monitor. For example, he surveys customers and learns that a new competitor offers cheaper prices. He considers lowering his prices, improving service, or offering a loyalty card. He chooses to improve service and launch a loyalty programme, then checks if customer numbers increase. This structured process helps businesses avoid quick fixes and make informed decisions. Many learners think jumping straight to solutions is best, but skipping steps can waste resources or worsen the problem.

Thandi manages a hair salon in Soweto. Her staff are often absent, affecting customer service. She considers two solutions: increasing salaries or introducing flexible shifts. She lists pros and cons for each. Higher salaries might motivate staff but increase costs. Flexible shifts could improve attendance without extra expense. She chooses flexible shifts and tracks attendance for a month. In business, evaluating solutions means considering costs, benefits, and possible risks. The best solution is not always the cheapest or quickest—it’s the one that solves the root cause and improves business performance. Always monitor results and be ready to adjust if things don’t improve.

Step 1: Identify the problem. The minibus taxi company in Durban is losing customers. Reason: This is the first sign something is wrong. Step 2: Gather information. Interview drivers and passengers. Reason: Find out why customers are unhappy. Step 3: Analyse causes. Passengers say taxis are often late and dirty. Reason: These are symptoms, not causes. Step 4: Investigate further. Discover that maintenance is skipped to save money. Reason: Poor maintenance leads to breakdowns and delays. Step 5: Develop solutions. Options: Schedule regular maintenance, hire a cleaner, or increase fares to cover costs. Step 6: Choose and implement. Decide to schedule maintenance and hire a part-time cleaner. Reason: Addresses root causes directly. Final answer: The company should focus on regular maintenance and cleanliness. Sanity check: If taxis are reliable and clean, customers are more likely to return.

Step 1: Identify the problem. A Polokwane clothing shop has too much unsold winter stock. Reason: Excess stock ties up money and space. Step 2: Gather information. Check sales records and talk to staff. Reason: Understand why stock isn’t selling. Step 3: Analyse causes. Find out that customers prefer new summer styles and the shop ordered too much winter stock. Reason: Poor forecasting and changing customer tastes. Step 4: Develop solutions. Options: Hold a clearance sale, donate old stock, or bundle items with summer clothes. Step 5: Choose and implement. Decide to hold a clearance sale and improve next year’s ordering process. Reason: Clears space and prevents repeat mistakes. Final answer: Clearance sale plus better forecasting. Sanity check: If winter stock sells and next year’s orders match demand, the problem is solved.

Question: The school canteen in Soweto is losing money. What steps should the manager take? Let’s think: First, identify the problem—falling profits. Next, gather information by checking sales records and asking students what they want. Analyse causes: Maybe prices are too high, or the menu is boring. Develop solutions: Lower prices, add new items, or run promotions. Choose the best option and monitor sales. Model answer: The manager should survey students, try new menu items, and track sales for improvement. Your turn: The school tuckshop in Durban has too many unsold cold drinks. What should the manager do? Sample answer: Check why drinks aren’t selling, ask students, maybe lower prices or offer combos, then monitor sales.

Question: A bakery in Mthatha keeps delivering bread late to shops. What’s the best way to solve this? Let’s model: First, identify the problem—late deliveries. Gather information: Ask drivers and shop owners. Analyse causes: Maybe the delivery truck is old or the route is too long. Develop solutions: Repair or replace the truck, or plan a new route. Choose the best solution and check if deliveries improve. Model answer: The bakery should repair the truck and plan a shorter route, then check delivery times. Your turn: A fruit seller in Polokwane keeps getting spoiled fruit. What should they do? Sample answer: Find out if the supplier is slow, change supplier or improve storage, then check if fruit stays fresh.

1. List two common business problems South African companies face, such as unreliable suppliers or load-shedding disruptions. 2. Name one symptom and one root cause from a local business example, for instance: symptom—fewer customers; root cause—dirty premises. 3. State the first step in the problem-solving process and explain why it is important to start there. Write your answers in full sentences.

1. Explain the difference between a symptom and a root cause using a real example from a business in your area. 2. Identify the root cause in this scenario: A Durban salon loses customers after staff start arriving late. Describe your reasoning. 3. Suggest two possible solutions for a spaza shop with spoiled stock due to load-shedding, and explain how each could help prevent the problem in the future.

1. Analyse the impact of choosing the wrong solution to a business problem, using a South African example. Discuss possible consequences for the business. 2. Justify which solution is better: raising prices or improving service, for a struggling taxi business in Soweto. Support your answer with reasons. 3. Develop a step-by-step plan to solve a problem of declining sales in a Khayelitsha clothing store. Include how you would monitor if your solution works.

• Develop possible solutions
• Identify the problem
• Implement the solution
• Analyse the causes

Answer: Identify the problem

Many learners jump to solutions, but the process must start with identifying the problem to avoid fixing the wrong issue.

• Staff absenteeism due to poor management
• Late deliveries caused by traffic
• Falling sales figures
• Broken equipment from lack of maintenance

Answer: Falling sales figures

Falling sales are a visible effect (symptom), not the underlying reason (root cause) for business trouble.

• Customers buying less
• Owner not checking expiry dates
• Lack of refrigeration during power cuts
• Staff not cleaning shelves

Answer: Lack of refrigeration during power cuts

Spoiled stock is usually due to lack of refrigeration, especially during load-shedding, not just poor stock checks.

• Gather information
• Develop possible solutions
• Monitor results
• Identify the problem

Answer: Develop possible solutions

After you analyse the causes, you need to brainstorm and develop possible solutions before you can choose or implement any. Skipping this step means you might not consider all your options, which can lead to poor decision-making.

• It saves money in the short term
• It hides the real cause, so the problem returns
• It always improves staff morale
• It increases profits immediately

Answer: It hides the real cause, so the problem returns

Fixing symptoms without addressing root causes means the problem is likely to come back, wasting time and money.