Chapter 2 BUSINESS AIMS AND OBJECTIVES

Question 1

What is a mission statement?

Answer 1

A mission statement is a short phrase that is used to describe the purpose of or a reason for the existence of a business/organisation.
Example; boots– help customer look and feel better than they ever thought

Question 2

What are aims?, Give an example

Answer 2

The aims of a business are what it hopes to achieve as a result of work in the
future (non– specific)
E.g. to become an international company

Question 3

What are objectives? ,

Give an example

Answer 3

The objectives are the activities or targets that the business sets itself in order to achieve aims; they are financial and have time scales.
E.g. increase sales by 10% by January.

Question 4

What is maximising profits? How do they do it?

Answer 4

Means to make the most profit that is possible. This means keeping costs as low as possible and its income revenue as high as possible. They have to be efficient with their resources to reduce costs and sell lots for high prices to
increase profits.

Question 5

What is maximising market share? How do they do it?

Answer 5

A company’s market share is the percentage or proportion that the company has of the total market. This can be done by greater promotion, reducing prices, add new features to compete with the competition

Question 6

What is survival?

Answer 6

Survival is to literally break even and continue working as a business without closing down. Many small or new businesses have this aim.

Question 7

What is breaking even?

Answer 7

Is the typical objective of a new business to make enough money from the revenue (sales) to equal the total cost.

Question 8

What is market growth? How do they do so?

Answer 8

Market growth means to increase profit. This is by opening new branches and growing from within, or growing externally by purchasing other businesses.

Question 9

What are non-financial aims? Give an example.

Answer 9

Non-financial aims are not to do with profit but the quality of life by being their own boss;

E.g. Then the aim is likely to be to retain independence so they can make all decisions and not have to work for others (self-employed).

Question 10

What will happen if a company gains a good reputation?

Answer 10

• Satisfied customers
• Reputation Improvement
• More Customers
• Repeat business
• Brand loyalty
• Less advertising costs

Question 11

What is Corporate Social

Responsibility?

Answer 11

Emphasis on stating business aims in terms of responsibility to the community, the environment and the planet.