1.5.3 Business Objectives 📝 Flashcards
What is an aim? 
A strategic goal 🥅 of the business
What is an Objective ? 
Specific steps needed to achieve the aims
What are the three purposes of aims and objectives?
Focuses all members of the business around a common goal
Aids decision-making
objectives motivate staff
How do we write an effective objective?
S pecific m easurable a ttainable r elevant t ime bound
SMART
What are the six aims businesses have?
Survival
profit maximisation
Marketshare
cost Efficiency
Employee welfare
customer satisfaction
What is survival ?
When you reach an substantial level of sales allowed the business to break even
How is survival achieved? When do we need to survive ?
penetration pricing to break into the market
use that there is
a new competitor
When we are trying to break into a new
market external shocks
difficult trading time
What is profit maximisation?
Will you make as much profit as possible within the time given - used with shareholders in Business
Hoe may we achieve profit maximisation?
Having the lowest possible production costs
using skimming pricing strategy -
setting the highest price
having short-term strategies with shareholders
What is market share?
The percentage of the market that the business has in revenue or units sold
Why do businesses want to increase market share?
Insures control over pricing
increases output economies of scale
profit margins will increase
What is cost efficiency?
When the business reduce costs to increase profit and survive an economic downturn
How can we achieve cost efficiency?
Lean production
reducing labour costs - redundancies changing suppliers
subcontracting
developing ways that save energy
What is employee welfare?
A more modern focus on an business objective that meets the needs of employees
What are some external or internal examples of employee welfare?
What may this lead to
External - insurance for gym
internal - proper brakes uniform correct equipment
Leads to satisfied and loyal and hard-working employees
increase morale motivation and increase in productivity
enhances image
recruitment is easier and retention is better
