1.5.3 - Business Objectives

Question 1

What are the 2 MAIN OBJECTIVES of a business?

Answer 1

SURVIVAL

PROFIT MAXIMISATION

Question 2

EXPLAIN the MAIN Business Objective - Survival

Answer 2

it’s a SHORT TERM objective, usually applied to a NEW BUSINESSES or START UP’S

objective is to REACH a SUSTAINABLE LEVEL of SALES that allows business to REACH its BREAK EVEN POINT

Question 3

Explain the MAIN Business Objective - Profit Maximisation

Answer 3

wanting to MAKE the MOST PROFIT possible FROM a GIVEN AMOUNT of RESOURCES

helps RECOVER any R&D costs

needed to help a business maintain high levels of product development and innovation

Question 4

What are 6 OTHER BUSINESS OBJECTIVES

Answer 4

(1) SALES MAXIMISATION
(2) MARKET SHARE
(3) COST EFFICIENCY
(4) EMPLOYEE WELFARE
(5) CUSTOMER SATISFACTION
(6) SOCIAL OBJECTIVE

Question 5

Explain the Objective - SALES MAXIMISATION

Answer 5

figures can be EXAMINED on a daily, weekly or monthly basis

data CAN be JUDGED as an INDICATOR of PERFORMANCE for PEOPLE wanting to INVEST in a Business

often found in car dealerships

Question 6

Explain the Objective - MARKET SHARE

Answer 6

may be an objective in a VERY COMPETITIVE MARKET where consumers switch suppliers

very IMPORTANT for INVESTORS to JUDGE business AGAINST COMPETITIORS.
LOSS in MARKET SHARE can be an INDICATOR of LONG TERM SERIOUS FINANICAL PROBLEMS

Question 7

Explain the Objective - COST EFFICIENCY

Answer 7

the MOST COMMON objective IN TRANSPORT and CONSTRUCTION industries where goods and services make up 70% of cost of project

can be ACHIEVED THROUGH LEAN PRODUCTION , where material, time and process waste is eliminated to save costs

Question 8

Explain the Objective - EMPLOYEE WELFARE

Answer 8

seeking HARMONIOUS RELATIONS WITH their WORKFORCE
External Examples: housing, medical insurance
Internal Examples: canteen, toliets, uniform
Employees that are SATISFIED are Loyal and Hard Working have INCREASED Morale, Motivation and Productivity

Benefits from an ENHANCED PUBLIC IMAGE as a good place to work

Question 9

Explain the Objective - CUSTOMER SATISFACTION

Answer 9

COMMON service industry and the COFFEE CORNER SHOP competitive market
THROUGH SURVEYS and will FOCUS on QUALITY

will ATTEMPT to IDENTIFY and understand what CUSTOMER WANTS and then provide this

SATISFIED CUSTOMERS will TELL OTHERS and REPUTATION and Word of Mouth are very CHEAP WAYS of HIGHLY EFFECTIVE MARKETING to improve sales

Question 10

Explain the Objective - SOCIAL OBJECTIVE

Answer 10

also known as Corporate Social Responsibility
may involve: REDUCING IMPACT on ENVIRONMENT
HELPS SOCIETY