Business objectives Flashcards
definition of business objectives
a goal or an aim that a business wants to achieve, the best objecitves are SMART and not vague so that everyone in the business knows what direction the busienss is going
what does SMART stand for?
Specific
Mesurable
Achievable
Realistic
Time bound
what is survivial as a business objective?
reach a sustainalbe level of sales that sllows the business to reach its break-even point (total revenue=total costs)
what is Profit maximisation?
when a business wants to make the most profit possible from a given amoujnt of recources
when is profit maximasation needed?
to help a business to maintain high levels of product development and innovation
what is shrinkflation
where the manufacturer keeps the price the same bur makes the product smaller instead of passing on a price rise which would have a negative impact on demand
difference between sales and profit?
Sales refer to the total revenue a business generates by selling goods or services.
Profit is what remains after subtracting all the costs (expenses, taxes, etc.) from the sales revenue.
other sales objectives
sales maximisation, market share, cost efficiency
definition of market share
the % of a market that a business has in terms of revenue or units sold
how can cost efficiency be achieved?
ECONOMIES OF SCALE, paying minimum wage workers, subcontracting where econocally viable, lean production or construciton where material time and process waste is eliminated, lower quality and price of product
what is Economies of scale?
cost advantages that businesses gain when they increase production. As they make more goods, the cost per unit typically decreases due to factors like bulk purchasing, specialization of labor, and spreading fixed costs over more units.
Employee welfare examples
external: medical insurance, housing
internal: canteen, toilets, uniform
what is customer satisfaction?
identify and understand what customer wants and then provide this
social objectives examples
reducing impact on environment, helping society, fair wages, doing things ethically, shouldn’t be cheque approach (not just give them money)
