1.3 Business Objectives

Question 1

Mission Statement

Answer 1

A statement of the business’s core aims phrased in a way to motivate employees and to stimulate interest by outside groups (eg. Consumers)

Question 2

Vision Statement

Answer 2

A statement of what the organisation would like to achieve or accomplish in the long term

Question 3

Objectives

Answer 3

Important to assess business success (must be SMART: Specific, Measurable Achievable, Realistic/Relavant, Time-specific (bound))

Question 4

Firm’s Objectives

Answer 4

Survival
Profit Maximisation (see chp3) (Profit Margin and Return on the capital employ)
Growth: (number of employees, income from sales, number of products produced)
Market Share: (Sales of the business/Total sales in the market) x100. The bigger the market shore the more control of the market
Customer Satisfaction: Surveys
Ethical considerations (CSR)
Environmentally Friendly (CSR)

Question 5

Objectives over time

Answer 5

New and small firms focus on survival
As a business grows, the focus changes to its wider stakeholders
PLCs want to keep shareholders happy by distributing dividends. So the focus is on the profitability
Objectives may change as economic or social conditions change

Question 6

Business Success

Answer 6

Set numerical target for a time period and compare with actual numbers (SMART objective)
Impact assessment: ‘soft’ objectives with surveys and lists of to do’s and not to do’s

Question 7

SWOT Analysis

Answer 7

Is a form of strategic analysis that identifies and analyses the main internal Strengths and Weaknesses and the external Opportunities and Threats that influence the business and its future direction and success

Question 8

Strengths SWOT

Answer 8

Internal factors about the business that can be looked upon as real advantages (Eg. a highly motivated workforce)

Question 9

Weaknesses SWOT

Answer 9

Internal factors about the business that can be seen as a negative factor (Eg. A lack of financial expertise

Question 10

Opportunities SWOT

Answer 10

An External factor with potential areas for expansion ( Eg. A new international market or the failure of a competitor)

Question 11

Threats SWOT

Answer 11

An External factor determined by an audit of the market conditions and the external environment of the business (Eg. A new technology discovered by the competition)

Question 12

Ansoff’s Matrix

Answer 12

A model that represents the degree of risk of 4 different strategies of growth