Essay about Failure of Business

FAILURE of BUSINESS
Due to

Lack of Business Acumen &
Operation Management Know How

By

Dr Yousuf H. Qureshi MD, DPH, FACP, DAB, MBA, Ph D
Ex Associate Professor
American University in the Emirates
Dubai, UAE
Email:
1. EXECUTIVE SUMMARY
The author and his wife opened a Used Car business, back in 2003. Because of lack of business acumen and no experience in the business failed both the directors incurred a huge loss.

Foolishly they put all their savings in this business and learnt the hard way about customer satisfaction, customer service, and networking within the same circle of business associates.

The directors did not have any knowledge of Operations Management and the failure of business was, mainly, due to not using the basics of operations and supply chain management.

In hindsight I have put recommendations that could have been given in 2003, had I attended the MBA program at that time or prior.

CONTENTS

1. Executive Summary -------------------------------------------3 2. Introduction-----------------------------------------------------5 1. Description of SINZ---------------------------------------6 2. SINZ Vision-------------------------------------------------6 3. SINZ Mission Statement---------------------------------6 4. SINZ Objectives--------------------------------------------6 5. SWOT Analysis---------------------------------------------7 3. What went wrong-----------------------------------------------7 1. Customer Service-------------------------------------------8 2. Systems Structure-------------------------------------------9 3. Capacity Management------------------------------------10 4. Material Management-------------------------------------11 5. Quality Issues------------------------------------------------11 4. Recommendations-----------------------------------------------14 5. Justification for Recommendations--------------------------15 6. Actions required for implementing the recommended changes-----------------------------------------16 7. References---------------------------------------------------------19

2. INTRODUCTION
The idea of a business of selling used cars, in Auckland, was transpired in 2002 when I came back after a series of consultancies for United Nation Population Program in CIS Countries.
To open a car yard business it was mandatory to have a Dealers’ licence, from Motor Vehicles Dealers Licensing Board in Wellington.
My wife and I applied for a LMVD and after obtaining it in February 2003 opened a car yard at Sylvia Park in the beginning of 2003, with the name of Savera Impex NZ Limited (SINZ).

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2.1 DESCRIPTION OF SINZ
SINZ opened the “Car Yard’ with a new concept.
SINZ would auction used cars in the rural areas to the farmers and through internet and deliver these cars at consumers’ door steps. Trade Me was never heard of till that time.
A detailed market analysis had been carried out by SINZ adviser and financial and cash flow forecast was made. 2. SINZ VISION
SINZ vision was to introduce a new concept in second hand cars whereby to take cars, on trailers, to rural areas and auction the cars to farmers. And selling second hand and reconditioned cars through its website.
3. SINZ MISSION STATEMENT
SINZ Mission Statement was: SINZ aimed to operate an ethical business in the used car Sales sector offering used cars with low mileage and good condition with after sales service that provide value for money.
SINZ also committed to supply low priced used vehicles to the community in general and people with “Low Buying Power” in particular.
2.4 SINZ OBJECTIVES: • To gain trust in used cars industry selling reliability, and

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