1.3 Changing Aims and Objectives Flashcards
What are the Objectives for a Growing Business?
Profit Growth Increasing Market Share Customer Satisfaction Go Global Increasing Shareholder return
How are Objectives for a Growing Business achieved and what is the benefit to the company?
Profit Growth:
How it’s achieved - Sell a wider range of products/reduce costs
Benefit to company - More income = more profit growth and money is used to expand business further
Increasing Market Share:
How it’s achieved - Gain loyal customers, Promote to wider audience, Franchising
Benefit to Company - More competitive, reduce prices through Economies of Scale
Customer Satisfaction:
How it’s achieved - Offers good quality products and customer service
Benefit to company - Customers buy the product and give recommendation
Go Global:
How it’s achieved - Advertising/selling online, Takeovers and Franchising
Benefit to Company - More customers = more profit, Appeals to a wider audience, Greater brand recognition
Increasing Shareholder Return:
How it’s achieved - Giving a dividend, Increasing Share Price
Benefit to Company - Easier to attract investors
How do you calculate Growth in Volume (quantity sold)?
Year 2 - Year 1/ Year 1 x 100
How do you calculate Growth in Value (Profit)?
Year 2 - Year 1/Year 1 x 100
What is an Aim?
A broad direction a business wants to go in
What is an Objective?
Is a clear indication of where the business decides to head
What are Social Costs?
Costs that affect or are paid by the rest of the society as a result of a business decision
What are Social Benefits?
Benefits that are received by the rest of the society as a result of a business decision
How can businesses become more Socially responsible?
No discrimination (Gender, Ethnicity) Sustainability Recycling Minimise pollution caused Making products that supports basic moral values
Why do Businesses consider Social Costs and Benefits as important when setting objectives?
Some decisions made can have a huge effect on society
