Business Studies – 1.3.4 Why some businesses succeed and others fail | e-Consult

Answer: PhoneForward's failure to gain market share despite competitive pricing and innovation could be attributed to several factors. Here are three possible reasons:

• Weak Marketing and Branding: Even with a good product, a lack of effective marketing can hinder success. PhoneForward might not be reaching its target audience, or its marketing message may not be compelling. For example, they might be relying on outdated advertising methods or failing to utilize social media effectively. A strong brand image builds customer loyalty and differentiates the product. Without this, customers may opt for established brands with greater brand recognition.
• Insufficient Finance: Starting and growing a business requires significant capital. PhoneForward may have limited funds for expansion, production, or marketing. This could restrict their ability to compete with larger, well-funded rivals. They might struggle to invest in new technologies or offer extensive customer support. A lack of finance can also limit their ability to weather economic downturns.
• Poor Management Skills: Ineffective management can lead to operational problems, poor decision-making, and a lack of direction. This could manifest as inefficient production processes, poor inventory management, or a lack of skilled staff. For example, poor staff training could lead to poor customer service, damaging the company's reputation. Strong leadership and effective teamwork are crucial for a business to thrive.

Note: The answer should include specific examples to support each point.