Question

Takyiwaa, Salamatu and Adade are Undergraduate Students from the University of Professional Studies who studied Management of Small and Medium Enterprise. After their National Service they decided to start a Restaurant Business. The overarching purpose for opening a Restaurant, was to be the second to none producers of Quality service in the Restaurant Business in Accra and respect for the customer. Starting a business of like nature is time consuming and full of uncertainty in view of the risk involved. Takyiwaa, Salamatu and Adade have been in the same class since Level 100 and they have the belief that, the future of the business they are about to start, its success and failure is within their control and that external influence has a very little control.

They had a meeting and agreed that it is important to systematically gather information and analyze these information concerning other Restaurants Business trends and activities within Accra, in order to further their Objective. They successfully carried out the project and were able to analyze the information from the field. The unresolved issue was where to locate the Restaurant and how the design should look like because this to a large extent will impact the Performance of their Restaurant Business. Thankfully after several deliberations and considerations of certain factors it was generally agreed that the Restaurant be located around Rawlings Circle.

These young Graduates are aware of the fact that potential customers are not homogenous because they have different needs, wants, taste, income level and characteristics. One way by which they can get larger share of the market in the next three to five years is to concentrate more on Students and satisfy their needs, wants, interest and specification of Packaging. Sales will also increase all things being equal if their price offer is the lowest possible (within the restaurant business) in the next three to five years. They agreed to make offer the lowest possible price to increase sales volume in the next three to five years.

Additionally, these young Graduates are very confident that they have something to offer in the Restaurant Business for that matter they are ready to go all out to do what the big guys failed to do in the Restaurant Business over the years. They resolve to make their Restaurant very clean, comfortable seats to suit customers, high food quality, treat customers with dignity and respect, timely service, have a well trained staff and most importantly putting the customer first. These students with their knowledge and competencies in the Management of Small and Medium enterprises are very much aware that their ability to successfully compete in the Restaurant Business in the Short, Medium and Long term to a large extent depend on the factors stated above.

They approached a financial institution for a support to enable them start their business operation without a delay. The credit officer of the financial institution requested that they furnish them with a written document describing the direction the business is taking, what its goals are, where it wants to be and how it is going to get there, is a fundamental perquisite that is to be satisfied before the loan is granted.

Additionally, the financial institution agreed to introduce their restaurant business to a company that helps new and startup business to develop by providing service such as management training and office space. The financial institution in a letter to these young Graduates who intend to start the Restaurant business agreed to provide them with a loan facility to the tune of fifty thousand Ghana cedis (GH 50000) at the rate of one percent (1%) interest per annum. These young Graduates in their letter of response, have also agreed in principle to all the conditions attached to the loan facility.

To ensure prudent management of the business financial position for development, growth, sustenance and realisation of its profit motives in the short-long term through the deployment of sound financial practices such as effective record-keeping, frequent inventory taking, monitoring of cash coming into and out of the Business, other relevant accounting control measures and strategic sourcing and disbursement of funds will be strictly adhered to.

From the Case study read above identify the sentence(s) or phrase(s) that indicate each of the concept below and explain them:

a) Mission Statement

b) CompetitiveIntelligence

c) Cost Leadership Strategy

d) FocusStrategy

e) Key Factors for Success (KFS)

f) Business incubator

g) Business Plan

h) Internallocusofcontrol

i) Debt Financing

j) Cash Flow Statement

Answer 1

Solution :

A) Mission :

"The overarching purpose for opening a Restaurant, was to be the second to none producers of Quality service in the Restaurant Business in Accra and respect for the customer."

B) Competitive Intelligence :

"They had a meeting and agreed that it is important to systematically gather information and analyze these information concerning other Restaurants Business trends and activities within Accra, in order to further their Objective."

C) Cost Leadership Strategy :

"They agreed to make offer the lowest possible price to increase sales volume in the next three to five years."

D) FocusStrategy :

"One way by which they can get larger share of the market in the next three to five years is to concentrate more on Students and satisfy their needs, wants, interest and specification of Packaging."

E) Key Factors for Success (KFS) :

"They resolve to make their Restaurant very clean, comfortable seats to suit customers, high food quality, treat customers with dignity and respect, timely service, have a well trained staff and most importantly putting the customer first."

F) Business incubator :

"Additionally, the financial institution agreed to introduce their restaurant business to a company that helps new and startup business to develop by providing service such as management training and office space."

G) Business Plan :

"To ensure prudent management of the business financial position for development, growth, sustenance and realisation of its profit motives in the short-long term through the deployment of sound financial practices such as effective record-keeping, frequent inventory taking, monitoring of cash coming into and out of the Business, other relevant accounting control measures and strategic sourcing and disbursement of funds will be strictly adhered to."

H) Internal locus of control :

"After their National Service they decided to start a Restaurant Business."

I) Debt Financing :

"The financial institution in a letter to these young Graduates who intend to start the Restaurant business agreed to provide them with a loan facility to the tune of fifty thousand Ghana cedis (GH 50000) at the rate of one percent (1%) interest per annum."

J) Cash Flow Statement :

"monitoring of cash coming into and out of the Business"