ANNEX I. WORK TOOLS
1.-1 BUSINESS PROBLEMS AND THEIR CAUSES
As a general rule, the crises of companies with external causes are justified internally, which is said to be little can be done.
- Crisis
- Changes in the market
- Technological changes
- Low demand
- Tyranny of suppliers
- External competence (for quality or costs)
- High taxes
- Lack of support from the Administration
- Delays in collection (especially from Public Administrations)
- Customer insolvencies
- Inflation
- Exaggeration negative rumors
- Adverse weather
- Disasters, earthquakes, floods
- Bad luck…
Without a doubt, the external aspects condition the progress of any company, there is a high correlation between the progress of the economy and the evolution of the results of the companies
In the face of this:
IT’S ALL ABOUT ADAPTING OR TAKING MAXIMUM ADVANTAGE
But not all ills come from outside, and while it cannot be generalized, it is estimated that most of the defaults and bankruptcies are due to the incompetence of their leaders, mainly because of their poor business diagnosis
The absence of a correct diagnosis of the company is what prevents the company from facing weaknesses that sink the company in the medium term
Some examples may include:
Cost problems
- Margins reduced by excess costs
- Excessive distribution, advertising, or promotion costs
- Uncompetitive production costs
- Excessive structure costs for the level of sales achieved
- Losses or benefits too small
- Business units with continued losses without action
Organizational problems
- Insufficient or poorly planned decentralization
- Insufficient control of new activities
Information system issues
- No cost accounting
- Accounting systems with errors or delays
Financial problems
- Insufficient capital contribution by partners
- Excess debt to finance investments
- Current passive excess
- Growth too accelerated for the company’s financial possibilities
- Increased customer delinquency
- Excessive investment in stocks
- Underutilized assets for poor management
- Excessive distribution of dividends to shareholders
Business problems
- Insufficient sales for the level of expenditure
- Diversification of ill-raised products
- Obsolete products
- Massive failures in the launch of new products
- Selling prices too low
- Insufficient response to competitors’ innovations
- Ignorance of the market, competitors or customers
Technology and production problems
- Underutilization of investment in buildings, machinery and facilities
- Cost or quality issues from use of outdated technologies
- Excessive failure costs
Human resources problems
- Low productivity due to lack of training or motivation
- Excessive labor costs
- Insufficient information to employees
Conflicts of interest between employees
ACTIVITY
Identify external and internal problems that we may have in our activity