The Collapse Of The Middle Earth Bank Essay
18 May 2016 in partial completion of
Business Fundamentals 4 (BUF400S) in the
B Tech (IT) degree offered by the
Department of Information Technology in the
Faculty of Informatics and Design at the
Cape Peninsula University of Technology
1.1 Same old story when business crumbles
It is the same old story, when the company (i.e. big or small etc.) crumbles under poor management. “I trusted him or her like my own child and the family member”. For many generations the business have been doing well. Just one careless mistake, of trusting your brilliant employee.
Well these only one advise to this careless, never trust anybody with you money, even family members and close friends, and worse strangers.
All the businesses do the same thing “making sales of products or services to generate profit”. Business does not have fate, if it does not generating profit then stop wasting your resources.
1.2 Business model of Middle Earth Bank
Business model of Middle Earth is very simple trading in Shire (i.e. SSE) and Bree Stock Exchange (i.e. BSE) to gain small profit (i.e. 5% but not more 10%.). Their model is hedging (i.e. minimize risk or loss).
Middle Earth Bank have been existing for centuries and they have been using this routine practice with great success. The was no magic formula required. Why all of a sudden, they did not stick to their strategy?
1.3 Background check…