Kabelo has ventured into a restaurant business. The business is located in a mall with a high traffic and is in an upmarket area. Because it is in the mall there are many other restaurants in the vicinity. Kabelo states that he beats competition by hiring fast young and energetic waitors/waitresses who are always smiling. He also makes sure that customers are given best service and never kept in the queue for long. He also pointed out that he sells Setswana dishes and other varieties to his customers while his competitors sell only one variety of food. The food is tasty and his customers love it. He stated that his prices are a little bit above his competitors’ though he usually lowers his prices at the monthend and also offers out door catering. Kabelo is charming and friendly and said he started his business from savings and loans from friends. Kabelo has a Diploma in Accounting and uses PASTEL accounting software that he uses to record his transactions. He prepares a cash flow statement on a weekly basis to determine how much cash he makes on a weekly basis. His policy is that the cash till should always have P700 cash to carry out daily business operations. He makes a budget and determines his prices by adding 30% on cost. He buys most of his stock on credit and has reliable suppliers. The business is flourishing and Kabelo wants to open another restaurant in another mall and is thinking of making his own global brand called KB wa Banuza. However, there is a problem with this current location as it has a high crime rate. Moreover, more luxurious malls are being opened and some big companies are moving out which can be a fatal blow to his business. Further, internationally renowned restaurants are entering the market, which stiffens competition.

Required: a. Briefly explain the purpose of a SWOT analysis for a business. (5 marks)

b. Conduct a SWOT analysis on Kabelo’s restaurant business. (20 marks