Business Objectives

Question 1

Name atleast 4 business objectives

Answer 1

Market share
Enterprise
Provision of service
Social responsibility
Customer satisfaction
Survival
Profit

Question 2

What is a business objective?

Answer 2

An objective is a target set by a business which helps it prioritise what has to be done to achieve success

Question 3

Choice of business objectives depend on what factors?

Answer 3

Stage of development and sector of economy the business is in

Question 4

Describe the survival objective

Answer 4

Most basic business objective. Every business has to make enough profit to keep operating.

Question 5

What businesses usually have the survival objective?

Answer 5

The survival objective is most common amongst new businesses which will have this objective for the first few years, small businesses may have this objective if they struggle against competition or recession

Question 6

Describe the profit objective

Answer 6

This objective is achieved when you have more income than cost.

Question 7

What type of businesses have the profit objective?

Answer 7

The profit objective is most common amongst private sector businesses

Question 8

What is profit maximisation?

Answer 8

Profit maximisation is variation of the profit objective. It describes an organisation’s aim to make as much profit as possible.

Question 9

How is profit maximisation achieved?

Answer 9

Profit maximisation is achieved by finding the right balance between the selling price, sales volume and the cost of production.

Question 10

Describe the provision of a service objective.

Answer 10

This objective is about focusing on providing a service to the customers.

Question 11

Name an example of provision of a service

Answer 11

Transport Scotland - 2015, re established passenger railway services from Edinburgh to tweedbank, this connected the border with the capital city

NHS Scotland - Provides free healthcare to patients at the point of entry.

Question 12

Describe the social responsibility objective.

Answer 12

This objective is concerned with the business’s activities not causing harm to the environment or people. ( Eg using biodegradable packaging to reduce harm caused to wildlife)

Question 13

What is a disadvantage of the social responsibility objective?

Answer 13

Socially responsible products and services usually cost more resulting in either lower profit for the business or higher cost for the customer.

Question 14

Describe the customer satisfaction objective.

Answer 14

This objective aims to ensure customers are happy with the product and level of service offered by the business.

Question 15

What is an aim of the customer satisfaction objective?

Answer 15

To ensure customers show loyalty and return to buy from the business in the future.

Question 16

How is the customer satisfaction goal measured and evaluated?

Answer 16

Customer satisfaction can be measured using surveys and interviews. Feedback from these is than acted upon.

Question 17

Explain the market share objective.

Answer 17

Market share relates to the sales made in a particular market.

Question 18

How does a business increase market share?

Answer 18

To increase market share a business will aim to increase their sales or aim to become the number one business in that industry.

Question 19

Describe the enterprise objective.

Answer 19

This objective is about turning an idea into a reality. This done by an entrepreneur or business taking the risk of bringing together the factors of production. Before the product or service can be taken to market finance market research and testing need to be organised.