2.3.3 Business Failure Flashcards
1
Q
Define business failure
A
the end of trading for a business
2
Q
What are the internal causes of business failure?
A
- Poor efficiency
- Poor marketing
- Failure to innovate
- Bad management of working capital
3
Q
What are the external causes of business failure?
A
- Economic recession
- Strong pound
- Competition
- Changes in trends
4
Q
How can economic recession lead to business failure?
A
Customer start to save rather than buy. Instead of purchasing expensive items, they buy more inferior goods.
5
Q
How can strong pound lead to business failure?
A
Businesses who heavily export will be affected because their goods that they manufacture will cost consumers more. To counter this, the business may move overseas.
