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Case Study: Will my business survive?

Eric started his craft shop six months ago. At first, sales had been high as local residents and some tourists were attracted by the unusual designs and competitive prices. After four months, he started having problems with some suppliers, complaining about the shortage of suitably qualified staff. Eric also noticed that during the off-peak tourist season, sales fell by over 50%. He had chosen a cheap site in quite a poor area for his shop, and he was worried about damage to his property, as without tourists, the area was very quiet and some unemployed youths had broken other shop windows.

His shop had been visited by the local Trading Standards officer as a customer had complained that a piece of jewelry that Eric had thought was white gold was, in fact, made from silver.

The off-peak months were causing Eric financial problems too. He still had to pay the fixed cost of rent and local taxes, yet his cash inflows were very low. He started to wonder if his business could survive until the next peak tourist season and whether he should have taken up the offer of a Business Management degree course before going into business.

1) Outline the micro- environmental problems that Eric’s business is facing.
2) Explain how Eric might overcome these problems.
3) Outline any THREE macro-environmental problems that Eric’s business is facing.
4) Explain how Eric might overcome these problems.
Thank you!

Respuesta :

azikennamdi

The micro problems that Eric's business is facing are:

  • Suppliers not meeting Eric's demand due to HR issues.
  • Over-head cost. These are Business Management issues.

How can Eric Overcome the Micro-environmental Problems?

To overcome issues with supplies, Eric will have to speak with his suppliers and link them up with suitable HR personnel to tackle the personnel problems they are having. In the short run, he needs to get more suppliers.

With regard to overhead costs, Eric must consider auditing his costs and taking the business online. By doing this, he can sell his crafts in season and off-season, thereby, covering up for overheads during off-season.

What are the three macro-environmental problems Eric's business is facing?

The three macro-environmental problems are:

  • Short-fall in sales
  • Area with low security.
  • Face-off with Local Trading Standards.

1. To tackle the short-fall in sales, Eric should consider doing more adverts while competing on high-end customer services, given that the prices are already competitive.

2. Because the area is not so secure, he in short-run must consider getting the business insured whilst employing the services of a professional security outfit.

3. It is important that Eric's business, in the short-run, refers the Local Trading Standards Office to his suppliers while getting training on how to identify quality jewelry.

Learn more about Business Management at:

https://brainly.com/question/26106218

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