Business Studies - Term 3 - Week 6

Imagine Sipho’s spaza shop in Khayelitsha. Last month, his daily sales dropped by half. He blames load-shedding, but his friend Thandi says it’s the new supermarket that opened nearby. Many South African businesses face sudden challenges like this—sometimes obvious, sometimes hidden. To spot a business problem, look for changes in sales, customer numbers, or costs. For example, a minibus taxi owner in Soweto might notice fewer passengers after a new bus route launches. The key is to observe patterns and ask: what’s different, and why? A common misconception is thinking the first sign of trouble is always the real problem. Often, it’s just a symptom. For instance, low sales could be caused by poor marketing, not just competition. Always dig deeper to find the root cause.

Lerato runs a small bakery in Polokwane. She notices her bread is not selling as fast as before. The symptom is clear: slow sales. But what is the root cause? She interviews customers and learns that her bread is sometimes stale by midday. The real issue is delivery timing, not product quality. In business studies, symptoms are surface-level signs—like low profits or high staff turnover. Root causes are the underlying reasons, such as outdated equipment or poor staff training. Focusing only on symptoms leads to quick fixes that don’t last. Instead, always ask ‘why’ several times to reach the real cause. This approach is called the “Five Whys” technique. For example: Why are sales down? Because bread is stale. Why is bread stale? Because deliveries are late. Why are deliveries late? Because the delivery van breaks down. Now, you’re closer to the real problem.

Ahmed owns a cellphone repair shop in Durban. He faces several problems: unreliable suppliers, frequent load-shedding, and rising rent. Which should he tackle first? Analysing business problems means breaking them down and weighing their impact. Start by listing all problems, then rate each by urgency and effect on the business. For Ahmed, load-shedding stops work completely, while rent increases are tough but not immediate. Prioritising helps businesses focus resources where they matter most. A common mistake is trying to solve everything at once, which spreads resources too thin. Instead, solve the problem with the biggest impact first. This method is often tested in NSC exams—learners must justify their choices using evidence from a scenario.

Once you’ve identified and prioritised the main problem, it’s time to find solutions. Let’s return to Sipho’s spaza shop. If the root cause is competition from a new supermarket, possible solutions include offering unique products, improving customer service, or joining a buying group to lower costs. In South Africa, solutions must be realistic—load-shedding, high crime, and limited funding are real constraints. Sometimes, innovation is key: a bakery might use solar ovens to beat power cuts. When suggesting solutions, always explain how they address the root cause and why they are practical in the local context. In exams, you’ll need to justify your solution with facts and logical reasoning, not just opinions.

Step 1: Read the scenario. A minibus taxi owner in Mthatha sees profits drop by 30% in three months. Step 2: Identify the symptom. The symptom is falling profits. Step 3: Gather more information. The owner notices a new bus service started recently and some regular passengers switched. Step 4: Ask 'why' to find the root cause. Why are profits down? Fewer passengers. Why fewer passengers? Competition from the new bus service. Step 5: Prioritise the problem. Competition is the main issue, not fuel prices or driver wages. Step 6: Suggest a solution. The owner could offer loyalty discounts or improve comfort to win back customers. Final answer: The root cause is increased competition, and a targeted customer strategy is the best solution. Sanity check: The solution addresses the real cause, not just the symptom.

Step 1: Scenario. Thandi’s clothing store in Soweto faces high staff turnover. Step 2: Identify the symptom. Staff are leaving frequently. Step 3: Investigate the cause. Thandi interviews staff and finds they feel unappreciated and underpaid. Step 4: Analyse the root cause. The real issue is low staff morale and poor pay, not just the workload. Step 5: Suggest a practical solution. Thandi could introduce staff incentives, training, and regular feedback sessions. Final answer: The root cause is low morale and pay; the solution is to improve working conditions and recognition. Sanity check: The solution targets the real cause, not just the symptom.

Question: Lerato’s internet café in Polokwane is losing customers. She thinks it’s because of slow internet, but a survey shows most people complain about uncomfortable chairs. How should she proceed? Let’s think: The symptom is fewer customers. The suspected cause is slow internet, but evidence shows it’s uncomfortable seating. Worked response: Lerato should focus on upgrading the chairs, as this is the real root cause. By addressing what customers actually complain about, she is more likely to solve the problem and attract customers back. Ignoring this evidence and only improving internet speed would waste resources and not fix the real issue. Now you try: Ahmed’s cellphone shop in Durban gets complaints about long waiting times. Is the problem slow repairs or not enough staff? Answer: Not enough staff. If there are not enough staff members to handle repairs, customers will wait longer, so hiring more staff or improving workflow will address the root cause.

Question: Sipho’s spaza shop faces competition from a new supermarket. What can he do to keep his customers? Let’s think: The root cause is competition. Possible solutions include offering unique products, better service, or loyalty cards. Worked response: Sipho could introduce a loyalty card and stock local snacks not found at the supermarket. By offering something different and rewarding loyal customers, he gives people a reason to choose his shop over the supermarket. This addresses the root cause directly. Now you try: Thandi’s bakery loses customers to a new café. What’s one solution? Answer: Offer fresh bread earlier in the morning. By providing fresh products before the café opens, Thandi can win back early customers and compete more effectively.

1. List two common symptoms of business problems, such as declining sales or high staff turnover. 2. Name one example of a root cause in a South African business, like unreliable suppliers or poor staff training. 3. State why it’s important to distinguish between symptoms and causes. This helps businesses fix the real issue, not just the signs.

1. Analyse why a minibus taxi business might lose customers after a new bus route opens. Consider factors like convenience, pricing, and service quality. 2. Suggest two solutions for a spaza shop facing competition from a supermarket, such as offering unique products or improving customer service. 3. Explain how prioritising problems helps a business use resources better by focusing on the most urgent and impactful issues first.

1. Justify which problem a Durban cellphone repair shop should solve first: unreliable suppliers, load-shedding, or rising rent. Explain your reasoning based on impact and urgency. 2. Predict the impact of ignoring root causes and only treating symptoms. Discuss how problems might return or worsen over time. 3. Solve: A bakery’s sales drop due to stale bread by midday. Propose a solution, such as adjusting delivery times or improving storage, and explain your reasoning in detail.

• Low sales
• Poor staff training
• Unreliable suppliers
• Old equipment

Answer: Low sales

Low sales are a visible sign (symptom), while the others are possible root causes. Many confuse symptoms with causes.

• It helps find the root cause of a problem
• It increases sales quickly
• It reduces staff turnover
• It improves customer service immediately

Answer: It helps find the root cause of a problem

The 'Five Whys' digs deeper into issues; it's not a quick fix for sales or staff turnover.

• Analyse what makes the supermarket attractive
• Fire staff to cut costs
• Raise prices
• Ignore the competition

Answer: Analyse what makes the supermarket attractive

Understanding the competitor helps target the real cause. Raising prices or firing staff may worsen the problem.

• Install a solar oven
• Reduce staff wages
• Increase bread prices
• Shorten business hours

Answer: Install a solar oven

Solar ovens directly solve the power issue. The other options do not address load-shedding's root cause.

• It leads to temporary fixes
• It always increases profits
• It guarantees customer loyalty
• It makes staff happier

Answer: It leads to temporary fixes

Treating symptoms doesn't solve underlying issues, so problems return. Many think quick fixes are enough.

Answer: It helps businesses focus resources on the most urgent and impactful issues, preventing wasted effort.