1.1.2 - Business Objectives Flashcards
Profit maximisation
Increasing revenue or decreasing costs
Sales maximisation
Increase amount of sales while maintaining an acceptable profit margin
Satisficing
Doing the minimum possible to meet customers’ needs and safety
Survival
Aiming to continue operating - may include decreasing workforce to cover costs
Market share
The proportion of a market controlled by a single business
Cost efficiency
Reducing the cost per unit
Employee welfare
The employee’s satisfaction with their job, this affects motivation and productivity
Customer satisfaction
The experience a customer has engaging with the business, including when purchasing and post-purchase such as the return policy
Social objective
An objective relating to the welfar of people in a society
Purchasing economies of scale
Buying in bulk, cheaper cost per unit
Technical economies of scale
Expensive, more efficient machinery, capital intensive but cheaper in the long-term (lower labour costs)
Managerial economies of scale
Better managers results in higher productivity and better communication within the business
Financial economies of scale
High risk loan –> high interest
Low risk loan –> low interest
Marketing economies of scale
Marketing generates more revenue with more outlets, advertising costs per outlet are much cheaper
Diseconomies of scale
What a business is too big, the chain of command is too long so there are breakdowns in communication which raises the costs to the business and decreases efficiency
