Business Studies - Term 2 - Week 7

Imagine Thandi’s spaza shop in Khayelitsha: one week, her bread sales drop sharply. She blames load-shedding, but is that the real problem? Many South African businesses face daily challenges—stock shortages, unreliable transport, or sudden price hikes. A business problem is any obstacle that stops a business from reaching its goals, like making a profit or keeping customers happy. It’s easy to confuse a problem with its symptoms. For example, empty shelves are a symptom; the real problem might be delayed deliveries from suppliers. Always look deeper than what you first see. A common misconception is thinking the first issue you notice is the main problem. Instead, ask: what’s causing this? That’s how you start real business analysis. In the South African context, these problems can be made worse by things like load-shedding, unreliable internet, or strikes, so it’s important to look at the whole situation before deciding what the real issue is.

Sipho runs a minibus taxi in Soweto. Lately, he’s losing passengers to a new bus route. At first, he thinks it’s just bad luck. But real business analysis means asking ‘why’ several times. Is it the price? The route? The timing? Root cause analysis is a method to find the underlying reason for a problem, not just the obvious effect. For example, if Sipho’s taxis are always late, the root cause could be traffic, poor scheduling, or even vehicle breakdowns. One way to find the root cause is the ‘5 Whys’ technique: keep asking ‘why’ until you reach the real issue. This skill is vital for exams—markers look for your ability to go beyond surface-level answers. In South Africa, this could mean looking at issues like taxi violence, fuel shortages, or even changes in local road conditions. If you stop at the first answer, you might miss the real reason and waste money fixing the wrong thing.

Lerato owns a small bakery in Polokwane. When her cakes start getting bad reviews, she uses the IDEAL model: Identify the problem, Define it clearly, Explore possible solutions, Act on the best one, and Look back to check results. For example, she identifies that cakes are dry (Identify), defines that it happens only on hot days (Define), explores solutions like changing recipes or baking times (Explore), tries a new recipe (Act), and checks if reviews improve (Look back). The IDEAL model helps you organise your thinking and avoid jumping to conclusions. In exams, using a model like this shows clear, logical reasoning and earns higher marks. Many South African businesses use similar step-by-step approaches to solve issues caused by things like load-shedding or supplier delays. If you skip steps, you might miss a better solution or fail to notice if your action worked.

Step 1: Read the scenario—Thandi’s spaza shop in Khayelitsha has declining bread sales. Step 2: Identify the symptom—bread sales are down. Step 3: Ask ‘why’—Is it load-shedding? Step 4: Investigate further—Check if other products are also affected. Step 5: Discover that only bread sales are down, but other items sell well. Step 6: Ask again—Did a new bakery open nearby? Step 7: Confirm that a new competitor is selling fresher bread at a lower price. Step 8: Consider if the delivery times for bread have changed. Step 9: Find out that Thandi’s bread arrives later than before, making it less fresh. Final answer: The root cause is increased competition and late bread deliveries, not load-shedding. Sanity check: Solution matches the evidence—other products are unaffected, and customers prefer fresher bread.

Step 1: Identify the problem—Sipho’s taxi business is losing passengers. Step 2: Define it—Losses are highest during morning rush hour, especially on weekdays. Step 3: Explore solutions—Change route, adjust prices, improve timing, or offer discounts. Step 4: Act—Sipho tests a new route that avoids traffic and advertises the change to passengers. Step 5: Look back—Passenger numbers increase over two weeks, and feedback is positive. Step 6: Review if the solution works long-term or if further changes are needed. Final answer: Using the IDEAL model led to a practical solution that directly addressed the root cause (traffic delays and route choice). Sanity check: The solution is supported by increased passenger numbers and positive feedback.

Question: Lerato’s bakery in Polokwane gets complaints about dry cakes. What should she do? Let’s think: Is it the recipe, the oven, or the weather? To solve this, we need to look for patterns. She checks if the problem happens on hot days only and realises the cakes dry out more when it’s hot. She experiments with a new recipe designed for hot weather and asks customers for feedback. Complaints drop, showing the solution worked. This shows the importance of analysing the situation before acting. Similar question: Ahmed’s cellphone shop in Durban gets fewer customers after roadworks start. What’s the root cause? Think about access and visibility. Answer: Customers can’t access the shop easily due to roadworks, so Ahmed should look for ways to improve access or advertise alternative routes.

Question: Sipho’s taxis are late every morning. What’s the real problem? Let’s break it down: He checks traffic reports and finds a new construction site causing delays. He changes his route and informs passengers of the new schedule. Lateness drops, and passengers are happier, showing the solution worked. This example highlights the value of investigating before blaming staff or making changes. Similar question: Thandi’s spaza shop fridge breaks during load-shedding, spoiling milk. What’s the root cause? Think about what triggers the fridge to stop working. Answer: Load-shedding causes the fridge to stop working, leading to spoiled milk. Thandi should consider a backup power solution or alternative storage.

1. List two common business problems faced by South African entrepreneurs, such as unreliable electricity or competition from new businesses. 2. Define ‘root cause’ in your own words and give a short example. 3. Name one symptom and one root cause from a business you know or have read about.

1. Analyse why a tuck shop at your school might lose customers during exam week—think about changes in student routines or stress. 2. Use the IDEAL model to solve a problem for a hair salon in Mthatha with frequent power cuts: what steps would you take? 3. Distinguish between a symptom and a root cause in a taxi business scenario, explaining your reasoning.

1. Given a case study of a Durban cellphone shop losing sales, identify the root cause and propose two solutions, explaining your choices. 2. Justify why it’s important to separate symptoms from root causes in business analysis, using a real or imagined example. 3. Solve an exam-style question: Analyse a scenario, identify the root cause, and suggest a practical solution using a problem-solving model like IDEAL, showing all your steps.

• To find the first problem you notice
• To identify the underlying reason for a problem
• To blame staff for mistakes
• To increase product prices

Answer: To identify the underlying reason for a problem

Root cause analysis digs deeper than symptoms. Many think the first issue is the root, but that’s often just a symptom.

• Load-shedding in Soweto
• Declining bread sales
• Supplier price increases
• Competitor opening nearby

Answer: Declining bread sales

Declining sales are a symptom. The cause could be competition, supply issues, or other factors.

• Act on the solution
• Define the problem
• Identify the problem
• Look back and review

Answer: Identify the problem

You must identify the problem before you can define or solve it. Many learners mix up these steps.

• Should we fire the driver?
• Why is the taxi late?
• Should we raise fares?
• Is the taxi clean?

Answer: Why is the taxi late?

Always start by asking 'why' to find the root cause. Jumping to solutions skips vital analysis.

• Explore possible solutions
• Define the problem
• Ignore feedback
• Look back to check results

Answer: Ignore feedback

Ignoring feedback is never part of good problem-solving. The IDEAL model is about reflection and improvement.

Answer: Treating symptoms does not solve the underlying issue, so the problem will likely return or get worse.