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

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
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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. 
b. Conduct a SWOT analysis on Kabelo’s restaurant business.

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