16. Explain one reason why a business might fail. [3]

[Sir Afzal Shad]

Q16. Explain one reason why a business might fail. [3]

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Possible Structure:
[KN]
[AN]
[AN+]

[Talha Asim]

(Kn)lack of working capital (an) all business need an appropriate amount of working capital to carry out their daily activities as without them the business wont be able to do the smallest of tasks like paying back creditors (an+) in doing so the business will keep going in debt and in order to stay afloat will have to take loans to the point that they will not be able to stay afloat and fail

[Shanze Arsalan]

KN: Lack of management could be a possible reason for business failure
AN: It leads to poor leadership which can demotivate employees. It can also result in high turnover rates and difficulties in attracting and retaining top talent.
AN+: Due to high turnover the business expenses will start exceeding its revenue, it results in negative cash flow and thus busines failure.

OR

KN: High competition could be a possible reason for business failure
AN: Due to high competition in a business environment the business would have to change it's objectives on regular basis e.g. going from business growth to survival of business.
AN+: Employees may lose confidence in the leadership and decision-making of the business if objectives are constantly shifting. This can erode trust and commitment among the workforce.

[Shanze Arsalan]

KN: Lack of management could be a possible reason for business failure
AN: It leads to poor leadership which can demotivate employees. It can also result in high turnover rates and difficulties in attracting and retaining top talent.
AN+: Due to high turnover the business expenses will start exceeding its revenue, it results in negative cash flow and thus busines failure.

OR

KN: High competition could be a possible reason for business failure
AN: Due to high competition in a business environment the business would have to change it's objectives on regular basis e.g. going from business growth to survival of business.
AN+: Employees may lose confidence in the leadership and decision-making of the business if objectives are constantly shifting. This can erode trust and commitment among the workforce.

[Syed huzaifa shah]

(kn) conflicts between stakeholder groups
(An) shareholders might want business to aim for profit maximization but on other hand consumer may want lower prices with points to opposite aim.
(An+) this would create delays in business decision making and slower decision making would result in failure of business in a dynamic market.

[Sudais Ahmed]

Kn: Lack of communication between managers and workers
An: Vague information, contains wrong instructions to be sent forward to the production department which than leads to faulty and wrong product to be produced that don’t fulfil customers demand.
An+:When customer will be unsatisfied from the product and service provided than they will shift to any alternate brand or organisation.

[Haasher Omar Khan]

[KN] Lack of inovation
[AN] consumers will get bore of the same product/service
[AN+]which will decrease sale of the business

[Minahil hamid]

Poor management like ineffective leadership and lack of proper planning can led to business failure this means that blockbusters videos failed and changing customers preference without a customer base a business cannot generate a revenue and can lead to financial crises in the business as no capital to purchase new products and lack of technology advancement can led to poor advertisement .

[zeemal rashid]

[KN] lack of knowledge
[AN] it can lead to poor decisions being made by the owners of the business
[AN+] hence, the business can face downfall in its brand image thus it may fail

[usaid ashraf]

[KN]Business might fail due to poor management.
[AN]It will fail to adapt to technology and changing consumer preferences.
[AN+]Therefore business will fail to generate enough demand in the market leading to lower sales and revenue thus collapsing.

[Zubiah gull]

[KN]Without the creativity of an entrepreneur or intrapreneur,the buisness will mostly lead towards failure.
[AN]As intrapreneurs have an idea for new buisness and can create a buisness plan.
[AN+]And entrepreneurs is able to get on with people, are good at handling money and keeping accounting records.

[Haniya Abrar]

KN: A business may fail due to poor consumer profiling
AN: If business doesn’t understand the demands of its customers, it cannot supply appropriate products and services they require
AN+: if customers demands aren’t fulfilled they will shift to a different business, lowering consumer base and resulting in failure of business

[Hamnah Naz]

[KN] A business might fail due lack of sufficient cash needed for its business operations. [AN] This means that running short of cash may conflict with the survival objective of the business as it becomes unable to pay back suppliers on time and take advantage of possible discounts from prompt payments. Similarly, the business may also find it difficult to pay back its loans and overdrafts and may face high interest charges from the bank. [AN+] As a result, the business being unable to meet its financial needs and having poor relations with suppliers and the bank may cause it to be driven out of market, as banks may refuse to lend and suppliers may refuse to provide raw materials. Therefore, the business may fail.

[Muhammad_Faizan]

KN: improper management of resources within the business
AN: Causing delays and wastages to occur so the costs of the business will increase while profit will be low
AN+: this will cause imperfections also within the products and will also cause loss on the business causing for it to fail

[Hasnain_Hamdani]

[KN] Lower number and value of sales revenue
[AN] Due to higher cost of production leading to a price hike resulting in a loss of customers
[AN+] Expensive imports leading to a higher COP