CHAPTER 14 - Measuring Succes in Businesses

Question 1

MEASURES OF SUCCES

Answer 1

• revenue
• market share
• customer satisfaction
• profit
• growth
• owner / shareholder satisfaction
• employee satisfaction

Question 2

REVENUE

Answer 2

if revenues increase each year = business is succesing

Question 3

MARKET SHARE

Answer 3

With a larger market share a business might be able to dominate the market; this will raise the profile of the business and perhaps allow it to charge a higher price

Question 4

CUSTOMER SATISFACTION

Answer 4

• many businesses will look at how consumers’ needs and wants have been satisfied when measuring success.
• businesses use customer surveys to gather information about customer satisfaction.

Question 5

PROFIT

Answer 5

• most private businesses aim to make a profit, therefore rising profits should signal improving succes
• profit should also be compared with that made by other businesses in the same industry

Question 6

GROWTH

Answer 6

• many businesses aim p to grow, therefore the size of the business is important when measuring success
• there are several different ways of measuring size, main ones:
  
  • turnover or revenue
  • the number of employees
  • market share
  • the amount of capital employed ( amount of money invested in a business )
  • EU definitions of size ( micro, small, medium - sized, large )

Question 7

OWNER / SHAREHOLDER SATISFACTION:

Answer 7

IN PUBLIC LIMITED COMPANIES:

• most shareholders have bought shares with the aim of making some money so, they will focus on divided payments and share price.
• in their opinion, successful companies are those that increase dividends each year

IN PRIVATE LIMITED COMPANIES
- success to the might mean survival in the market, rising salaries or business growth

SMALL BUSINESS
- small businesses measure success differently, for example: if it continues to provide financial security

Question 8

EMPLOYEE SATISFACTION

Answer 8

employees depend on businesses for their livelihood, they also want:

• good working conditions
• opportunities for promotion
• fair and honest treatment