Objectives and Business Success

Question 1

How does a business know when it has been successful?

Answer 1

It has met it’s objectives

Question 2

What’s an objective?

Answer 2

Anything that a business wants to achieve

The most important is for a business to make a profit

Question 3

What is and why does a business have a success criteria?

Answer 3

Success criteria are targets a business sets

They are used to measure whether or not it has met its objectives

Question 4

List what types of things a business would look at for success

Answer 4

Survival, Profitability, Growth, Market Share, Customer Satisfaction, Ethical Considerations, Environmental Sustainability

Question 5

How is profitability measured?

Answer 5

Indicators such as profit margins and return on capital employed (the bigger the more profitable)

Question 6

How is growth measured?

Answer 6

There are a number of ways: number of employees, number of products sold or income from sales

Question 7

How do you work out market share?

Answer 7

Dividing sales of a firm’s products into the total sales of the market and times it by 100

Question 8

How do stakeholders impact success?

Answer 8

They have different ideas of success
Consumers want good quality products, low costs, environmentally friendly
Government want businesses to create wealth and jobs
Shareholders want profitable firms

Question 9

How does a firms success criteria change over time?

Answer 9

New businesses are likely to be concerned with survival, whereas PLCs are more likely to care about profit

Question 10

List some potential objectives

Answer 10

Be the biggest in the market
Provide the highest quality products in their market
Make a profit in order to survive
Focus on expanding the business
Maximize sales