Topic 21 Flashcards
Business aims VS objective
Aims: what the business wants to achieve long-term
Objectives: goals or targets that need to be met to achieve aim
SMART
S -> specific
M -> measurable
A -> agreed
R -> realistic
T -> time specific
Types of objectives -> survival
- Survive -> first 12 months
- Survive -> new competitors
- Survive -> when trending conditions become difficult
Types of objectives -> profit maximisation
Do this by:
. Keeping costs as low as possible while raising prices as high as they can
-> usually use skim pricing
Criticism: short-term = long-term opportunities overlooked + higher profits = lower wages for employers + higher prices for customers
Types of objectives -> sales maximisation
Aim: wanting to increase sales as much as possible
-> business can raise profit by selling more goods + can gain market share
-> can motivate workers
Types of objectives -> market share
Increases revenue and raise profile of business
-> allows business to dominate market + more control over price
-> output levels higher = lower costs of production — increases profit margins + profit for owners
Types of objectives -> cost efficiency
How to reduce business costs
-> if costs lower = profit margins higher + gain competitive edge in market
Methods to cut cost -> 5
- Lay off staff
- Find new suppliers
- Increase usage of recycled materials
- Develop new working practices that use fewer resources
- Develop ways of saving energy
Methods to improve employee welfare -> 5
- Making environment clean, less noisy & crowded
- Staff given proper brakes + comfortable places
- Staff properly equipped with resources
- Maintaining high standards of courtesy between staff members
- Encouraging regular exercise
Methods to achieve customer satisfaction -> 5
- Well trained customer-facing staff
- Provide platform for customer feedback
- Use social media to interact with customers
- Deal with customer complaint effectively
- Monitor customer service regularly
Methods to meet social objectives -> 6
- Keeping noise levels down
- Maintaining sensible open hours
- Minimising pollution
- Providing employment for local people
- Maintaining open channels for communication
- Making contributions to community
