N5S3 - Business Objectives

Question 1

Name all 6 Business Objectives

Answer 1

• profit
• provision of a service
• increase market share
• growth
• social responsibility
• survival
  (customer satisfaction)

(REMEMBER PPIGSS)

Question 2

Explain why businesses want to provide a service

Answer 2

Applies to: Private, Public and Third

Businesses want to provide a high quality service so that customers return

Private and social enterprises: good customer service
Public and charities: service for the community

Question 3

Explain why businesses want to make profit

Answer 3

Applies to: Private sector and social enterprises only (third sector)

They make profit to cut costs and increase prices

Private sector organisation want to maximise profits as it will be able to grow if it has increased retained profits

Social enterprises may want to maximise profits to have more money to help their cause

Question 4

Explain why businesses want to increase market share

Answer 4

Applies to: Private sector only- large organisations (LTD)

• increase sales so that they are the market leaderand can release a new product or increase promotion

Question 5

Explain why businesses want to grow

Answer 5

Applies: Private and third sector

Growth is important because it enables businesses to increase the scale of their operation and competitiveness

• Private sector businesses grow through increasing the number of shops, selling online, bringing out new products
• Charities grow through raising awareness
• Social enterprises grow through increasing sales and also raising awareness

Question 6

Explain why businesses want to survive

Answer 6

Applies to: Private and third sector (/public too)

Usually aim of smaller organisations

• Private and social enterprises want to have enough income from sales to cover costs
• Charities aim to increase donations to cover costs

Public will aim to use taxes efficiently

Question 7

Explain why businesses aim to have social responsibilities

Answer 7

Applies to: Private, Public and third sector

This is when a business aims to carry out its activities AND benefit society or the environment

Advantages:

• Good reputation
• Customer are attracted to support an ethical business
• Good quality employees may be attracted to an ethical business
• May be able to attract ethical investors