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Questions: 1. If you were a friend of Sammy, what would you tell him? Explain. 2. Is Sammy’s situation hopeless? Why and why not? Justify your answer. 3. What did Sammy miss regarding his business plan? Be specific and explain.

Questions: 1. If you were a friend of Sammy, what would you tell him? Explain. 2. Is Sammy’s situation hopeless? Why and why not? Justify your answer. 3. What did Sammy miss regarding his business plan? Be specific and explain.

Understanding 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
Problem 1CE
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Questions:

1. If you were a friend of Sammy, what would you tell him? Explain.

2. Is Sammy’s situation hopeless? Why and why not? Justify your answer.

3. What did Sammy miss regarding his business plan? Be specific and explain.

Case Study: Sammy's Motor Repair Shop At age 26, Samuel Bugarin established his motor repair shop along the highway, one kilometer away from the commercial district of his town. He holds a degree in Mechanical Engineering and just after graduation, he started working as an apprentice in his uncle's repair shop. He prodded his uncle to expand his business, but his advice was not heeded. He thinks that the motor repair business is growing steadily. He noticed that the new car models are operated with electronic systems installed in them. Sammy believes that repair and maintenance of the new car models cannot be served adequately by repair shops existing in the area. Sammy immersed himself into learning the care and maintenance of electronic installations in cars. He also acquired the skills necessary for maintaining efficient performance of cars. When he thought he already possessed the required training, he decided to become a motor repair shop entrepreneur. Sammy gathered relevant information he thought would be necessary in the preparation of a business plan. He considered hiring at least five experienced mechanics. He started constructing the building where his office and service facilities will be housed. He made sure that customers can contact him through the telephone he installed in his office. In addition, he maintains a handy phone so he can serve those whose cars get stalled somewhere. Sammy stuck to his business plan and business was very encouraging during the first three years. On the fourth year of his operation, a new motor repair shop opened just across the highway from his shop. It was inevitable that some of his customers would move over to his new competitor. Sammy did not anticipate the threat now confronting his business. He was already entertaining the idea of putting up another shop at the other end of the commercial district. But now, it seems that his dream of opening another shop is slowly drifting away. With entry of the competitor, he is beginning to lose faith in the usefulness of a business plan. He is apprehensive and he wants quick advice.
Transcribed Image Text:Case Study: Sammy's Motor Repair Shop At age 26, Samuel Bugarin established his motor repair shop along the highway, one kilometer away from the commercial district of his town. He holds a degree in Mechanical Engineering and just after graduation, he started working as an apprentice in his uncle's repair shop. He prodded his uncle to expand his business, but his advice was not heeded. He thinks that the motor repair business is growing steadily. He noticed that the new car models are operated with electronic systems installed in them. Sammy believes that repair and maintenance of the new car models cannot be served adequately by repair shops existing in the area. Sammy immersed himself into learning the care and maintenance of electronic installations in cars. He also acquired the skills necessary for maintaining efficient performance of cars. When he thought he already possessed the required training, he decided to become a motor repair shop entrepreneur. Sammy gathered relevant information he thought would be necessary in the preparation of a business plan. He considered hiring at least five experienced mechanics. He started constructing the building where his office and service facilities will be housed. He made sure that customers can contact him through the telephone he installed in his office. In addition, he maintains a handy phone so he can serve those whose cars get stalled somewhere. Sammy stuck to his business plan and business was very encouraging during the first three years. On the fourth year of his operation, a new motor repair shop opened just across the highway from his shop. It was inevitable that some of his customers would move over to his new competitor. Sammy did not anticipate the threat now confronting his business. He was already entertaining the idea of putting up another shop at the other end of the commercial district. But now, it seems that his dream of opening another shop is slowly drifting away. With entry of the competitor, he is beginning to lose faith in the usefulness of a business plan. He is apprehensive and he wants quick advice.
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