I name a limitation without explaining its consequence

A limitation earns its place only when you say what it does to the decision. Naming it is a label. Explaining the consequence is the analysis that follows the label.

This page gives a four-link chain and a worked fictional survey. It supports assessing sample limitations in market research and the wider case analysis and evaluation module.

Why does the answer stop at the label?

“The sample is small” feels complete because it sounds like a critical thought. The trouble is that it could be written about any survey, so it does not show you have read this case. It also leaves the reader to do the thinking.

Examiners read many limitation labels. What stands out is an answer that follows the limitation to what the business would do and what would happen to its goal.

A chain that develops a limitation

Use four links, in this order:

1. Name the limitation, using a fact from the case.
2. Say what could be wrong: what the evidence might overstate, understate or miss.
3. Show the decision the firm might make because of it.
4. State the effect on cost, cash, customers or the objective.

Worked example

Zara’s Lunch Boxes is a fictional café. The owner surveys 20 regular customers about a new reusable lunch box priced at RM12. **16 of them say they would buy one.

** The café has 400 customers a week. Each box costs the owner RM7 to buy in. The owner’s objective is to avoid tying up cash in unsold stock.

Weak answer. “A limitation is that the sample is small.”

Developed answer, link by link.

1. Name: the survey asked only 20 regular customers, all people who already like the café.
2. What could be wrong: regulars may be keener than the wider 400 customers, so 16 out of 20 (80%) may overstate how many would buy.
3. Decision: if the owner believes 80% of 400 customers will buy, that suggests 320 boxes a week, so she may order about 320.
4. Effect: suppose the true share is 25%, which is 100 boxes. The café would hold 220 unsold boxes costing 220 × RM7 = RM1,540, which is the stock-tied-up-cash result the owner wanted to avoid.

Check the arithmetic: 400 × 0.80 = 320. 400 × 0.25 = 100. 320 − 100 = 220. 220 × 7 = 1,540.

Finished answer. “The survey asked only 20 regular customers, who may be keener than the wider customer base, so the 80% result may overstate demand. If the owner orders 320 boxes on that basis and only 100 sell, 220 boxes costing RM1,540 would sit unsold, which works against her objective of avoiding cash tied up in stock. She could order a smaller first batch and ask a wider group before reordering.”

Notice that the 25% is shown as an illustration of the risk, not a fact from the case. The answer says “suppose” and avoids claiming it as data.

The mistake to avoid

Mistaken answer: “A limitation is that the forecast may be inaccurate, so the decision is not reliable.”

This is a label with a vague ending. It does not say why the forecast could be wrong or what the firm would do.

The correction is to replace “not reliable” with what the firm would do differently and what that costs or risks.

Self-check

1. A fictional firm bases its sales forecast on one busy December. Name the limitation and its consequence for ordering.

2. The case gives no costs. A student writes “an error may cost the firm a lot of money”. What should the student do instead?

3. Why is one developed limitation often worth more than three labels?

Where to go next

Try explaining a delayed receipt’s effect for another cause-and-effect chain, and checking that a judgement follows the evidence to connect limitations to your conclusion. The ratios tool shows what missing evidence can change in a calculation, and the cash versus profit bridge shows how a timing limitation affects cash. The Business learning guide has the full map.

If you want a teacher to go through your own limitation paragraphs, online one-to-one Business tuition works from your written answers.