THEME 1.5.3

Question 1

What are the 8 business objectives?

Answer 1

Survival
profit maximisation
sales max
market share
cost efficiency
employee welfare
customer satisfaction
social objectives

Question 2

What is a business objective?

Answer 2

Business Objectives are quantifiable targets or goals to be achieved within a given time frame

Question 3

What is SURVIVAL?

Answer 3

survival is continuing to exist as a business.

• very important in short term
• main for start up business

Question 4

what is PROFIT MAXIMISATION?

Answer 4

profit max. is where the surplus of sales revenue over total costs is at its highest.

keeps investors happy and funds growth.

Question 5

FORMULA FOR PROFIT

Answer 5

PROFIT= SALES REVENUE - TOTAL COST

Question 6

WHAT IS SALES MAXIMISATION?

Answer 6

sales maximisation is achieving the the highest achievable amount of sales either by volume or by value

sales volume is the amount of sales expressed as a number of units sold e.g. 20 tonnes of wool
Sales value is the amount of sales expressed as the total sum of money spent by consumers e.g. £3 million expenditure on clothing

Question 7

What is MARKET SHARE?

Answer 7

Market share is the proportion of total market sales that a firm has

this can be calculated as:
Business A sales
_____________ X 100
market sales

Question 8

What is cost efficiency?

Answer 8

To control costs so that the maximum value of outputs is achievable with the lowest value of inputs

This is necessary to support an objective of profit maximisation

Question 9

What is EMPLOYEE WELFARE?

Answer 9

Employee welfare
To look after the economic
and physical well being of
the workforce

   A motivated workforce will 
   increase productivity
    Helps maintain positive 
   employer/employee 
    relations

Question 10

what is customer satisfaction?

Answer 10

Customer satisfaction
To ensue that goods and services meet the needs and expectations of the customer

Helps to build customer loyalty and repeat business maximising sales in the long run

Question 11

what is social?

Answer 11

Social
To behave in a way which benefits society
This could include to create employment, support the local community or improve educational standards

Question 12

What are SMART objectives?

Answer 12

Specific
Measurable
Achievable
Realistic
Timebound

Question 13

Why do businesses set objectives?

Answer 13

businesses set objectives to

Common sense of purpose
Motivate employees
Create reward systems
Measure and review performance
Inform decisions to improve performance