Lesson 3 - Business Objectives

Question 1

KPI

Answer 1

Criteria that measures how effective and efficient a business is at achieving its business objectives.
Allows a business to constantly review there performance by providing data that measures how well it is performing in different areas.

Question 2

Efficiency and effectiveness

Answer 2

How productively a business uses its resources when producing a good or service
Effectiveness= the extent to which the business achieves its business objectives

Question 3

Simple business process

Answer 3

Set objectives > implement strategies to achieve objectives > monitor using KPI’s

Question 4

5 business objectives

Answer 4

Make a profit
Increase market share
Meet shareholders expectations
Fulfil a market need
Fulfil a social need

Question 5

Make a profit objective

Answer 5

What: when revenue is greater than expenses
Why: profit is essential for survival
How to achieve it: any strategy that will increase revenue e.g marketing OR reduce expenses e.g eliminate waste, cheaper materials

Question 6

Increase market share objective

Answer 6

What: increase control of the market to become more competitive
Why: increased customer loyalty = increased stability - also lead to increased profit
How: make price lower than competitor OR provide a unique benefit about your product e.g higher quality

Question 7

Meet shareholders expectations objective

Answer 7

What: Ensure a return of investment to shareholders through dividends and share price
Why: Attract new shareholders b/c seen as strong investment + prevent conflict b/w management and shareholders
How: increased profit

Question 8

Fulfil a market need objective

Answer 8

What: provide a g/s that meets the desires of the group of customers
Why: increased sales > increased revenue > increased profit + if the only organisation filling the ‘gap in the market’ then creates customer loyalty
How: identify what the market needs and currently is not meeting an develop a product or service to meet that need

Question 9

Fulfil a social need Objective

Answer 9

What: improve the community or environment through business activities e.g address poverty,waste
Why: improves reputations > increase sales + market share OR because its the OR because its the organisations purpose > nobody can make a profit at the same time
How: consider social and environmental impact when making decisions OR supporting other organisations work