Business 2.3.3 - Business failure


Any business that fails will do so because it does not have enough cash to pay the bills but the reasons for this can be complex.

Other causes that lead to financial problems may bring down the business. Major issues tend to focus on marketing or strategic problems such as:

  • Not understanding customers
  • Failing to differentiate from rivals
  • Failing to communicate what is special about your business to consumers
  • Poor leadership
  • not being able to find enough ways to generate revenue

Internal Factors:

Marketing failure -

  • Problems understanding changes in the marketplace will lead to a shortage of revenue.
  • Poor decisions relating to the marketing mix can often result from this.

Financial failure -

  • Managers need to manage finances actively.
  • Failing companies sometimes tumble into cash flow crises without seeing them coming.

Systems or operations failure -

  • If IT systems simply do not provide the right people within the business with the information they need, things…


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