1.4 Buisiness Aims And Objectives Flashcards
What is an aim
General target
What is an objective?
Specific and helps to achieve your aim
General business aims (PIGS)
Profit
Image
Growth
Survival
Reasons to set objectives (5p)
To inform customers and shareholders
Motivate staff
Compete with competitors
Gain investors
To give business direction
How to set objectives (SMART)
Specific
Measurable
Achievable
Realistic
Time bound
Profit
How much money is left once all costs have been payed
Profit equation
Profit = sales revenue - total cost
Importance of profit to stakeholders (2p)
- Importance to shareholders because they expect a dividend
- Important to staff because it suggests job security
Growth
- When something in the business increases
- Expanding the business.
Importance of growth
Large businesses need growth (like Plcs) to pay increased dividends to shareholders
Market shares
- The percentage of an industry’s total sales that a company controls
- it shows a company’s size relative to its competitors
Importance of market shares
- it tells investors how strong the businesses competition is and helps to assess the companies potential
Providing a service
- Offers customers something they usually can’t get
- Usually with a fee
Importance of providing a service
- Gives staff satisfaction
- Can show the business how successful they are because a hood service can create customer loyalty
Survival
When a business has to operate in a certain way for an amount of time, especially during a crisis
