Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Read the scenerio and then answer the question - 50 words or more: Mack: Hi, Im Mack. My best friend Peter Charles (aka: PC) and

Read the scenerio and then answer the question - 50 words or more: Mack: Hi, Im Mack. My best friend Peter Charles (aka: PC) and I have been best friends for 10 years. Both of us have an extensive background in computers. For years, our friends and family have encouraged us to go into business for ourselves as computer technicians. One day over coffee, we decide to take action and start our own company. We spend about 2 hours discussing all our needs and then develop an estimate of how much it would cost to get our company started. Mack: PC and I approach my father with our business proposal. We inform him that we have decided to start a company that will service the Greater Northern Virginia area. Our niche market will be owners of home based businesses who do not have their own technical support team. We estimated that we would need $25,000.00 in startup capital. The following is a breakdown of our estimate: Mack: My father is so impressed that he offers us a $25,000 business loan over 48 months at an interest rate of 8%! Mack: The business model is simple. I will take the calls and dispatch Peter to service the clients. Our marketing plan is word of mouth referrals, a website, and a moderate email campaign. We contacted local companies offering similar services to determine our pricing. In an effort to gain business, we structured our pricing at a very competitive 20% lower than the closest competition and major electronic chains (Best Buy, Circuit City, Comp USA etc). The first two weeks of business was fairly slow, averaging only 2 calls per day. However, things started to pick up in week three. By week six, the calls for service began to increase to over 20 calls a day for service. Due to our niche in the market, these customers are small business owners who cannot afford downtime in their business. Mack What was originally designed to be a MondayFriday 8 to 5 operation, turned into a 24/7 business, and neither PC nor I could support the number of calls, or email requests for service. The customers we did respond to received average to below average service due to the physical demands placed on us. Although the company, Computers 2 U produced a profit in the second, third and fourth month of operations, we had to close shop after only 6 months in business. What are the main factors that contributed to the failure of this company in your opinion? question 4 of 4 100 workds min

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Tools For Business Decision Making

Authors: Jerry J Weygandt, Paul D Kimmel, Jill E Mitchell

9th Edition

1119754054, 9781119754053

More Books

Students also viewed these Accounting questions

Question

Personal role: This consists of service to family and friends.

Answered: 1 week ago

Question

The role of life: It consists of your own service to yourself.

Answered: 1 week ago