U3 AOS1 CHPB FELIX's Flashcards
What are the seven business objectives
-Making a profit
-Increase market share
-Improve efficiency
-Improve effectiveness
-To fulfill a market need
-To fulfill a social need
-To meet shareholder expectations.
What is making a profit
Why does a business want to make a profit
-Profit(n.)=The surplus remaining after total costs are deducted from total revenue.
-Profit is in the definition of what is a business
-Profit is not always the #1 objective for all business types but it is one of the most important objectives for all businesses.
Why does business want to make a profit=
:Business wants to make profit in order to grow and earn more of an income, and to increase the wages of employees and managers, and to increase the price of shares for shareholders and owners of the business.
What is increasing market share
Why does a business want to increase its market share
-Market share(n.)=a business’s percentage of total sales within an industry
Why does a business want to increase its market share=
:Business wants to increase market share for competitive advantage against other similar businesses, to increase company reputation, to increase awareness of the business.
How do you increase market share
-How can you increase market share?:
:Lower costs, lower prices, increase sales
:Increase your quality
:Boost reputation
:Increase advertising
:Damage occurs to a competitor
What is improving efficiency
Why does a business want to improve its efficiency
-Efficiency(n.)=(in business) How well resources are used to achieve objectives.
Why does a business want to improve its efficiency=
:To sell more from the amount of resources used in production, and to decrease the price needed to produce products(decrease employee wage price and resources costs).
What happens if a business is not efficient.
-What happens when business is not efficient=
:we waste raw materials and time, and pay more for labour than we should. This costs us more meaning=
=Business costs go up
=Prices go up
=We are less competitive
=We sell less
What is the link between efficiency ad productivity
-Efficiency(n.)=(in business) How well resources are used to achieve objectives.
-Productivity(n.)=(in business) the ratio of outputs produced compared to inputs required
-Efficiency is how well resources are used to achieve objectives(a goal/objective).
-Productivity is the ratio of outputs produced compared to inputs required(a measurement).
What is improving effectiveness
Why does a business want to improve its effectiveness
-Effectiveness(n.)=(in business) The degree to which stated objectives have been achieved.
Why does a business want to improve its effectiveness=
:In order to achieve the same business objectives in shorter time periods, and in more effective ways.
How do you improve effectiveness
Improving effectiveness is dependent on the objective you are trying to achieve
Deep dive=
-A business’ stated objectives could be:
:to increase profit
:to increase market share
:to meet a market need
:to reduce waste in the production process
:to move to sustainable energy
Effectiveness= to what extent are we achieving the objectives
What is fulfilling a market need
Why does business want to fulfil a market need
-market need(n.)=The desires or demands of customers
-To fulfil a market need is to meet the demands of customers
Why does business want to fulfil a market need=
:If customer satisfaction is high as their need is met=
=Increased brand loyalty (more likely to buy more of the product)
=increases market share
How can a business tell if it is fulfilling a market need
-market need has been met?=
:if a customers happy=as their demands have been met= they are more likely to buy more of your products
:If you see your sales going up over time, you can say it is due to the market needs being met.
:if have are getting a bigger percentage of the market share, then clearly the customers are happy.
-Market need not met?=
:if you are getting a lower percentage of the market share, if sales decrease, and if your profits are going down, then the customers demands are not being met.
What is fulfilling a social need
Why does a business want to fulfill a social need
-social need(n.)=To fulfill a social need is to make society a better place through the actions of the business.
-or social need(n.)=addresses an environmental or community issue through business activities
Why does a business want to fulfill a social need=
:Business will fulfill social need to feel pride of being able to help, and for their reputation as they are then viewed as a business that cares about society broader than its own personal interests
-Why would a business invest in positive community relations?=
:builds up the image of the business, giving the business a nice association with the community
:increasing peoples willingness to buy your products
:and hopefully when something bad happens your reputation has been raised to a point where it can take a little bit of a hit, while still allowing you to continue your operations.
How do you fulfill a social need
Business fulfills social need if it has donated money towards social causes and has funded money to keep social causes running.
What is meeting a shareholders expectations
Why does a business want to meet shareholders expectations
-Share(n.)=A portion of ownership in a company.
-Shareholder(n.)=A person who owns at least one share in a company, making them a partial owner.
How are shareholder’s expectations met?=
:Through receiving a return on their investment: through dividends, selling their shares in the future when the business has grown,
-If you don’t keep your shareholders happy, they can turn on you.
Why does a business want to meet shareholders expectations=
:Business wants to keep shareholders happy as they may turn on the businesses managers.
How do you meet a shareholders expectations
:Through receiving a return on their investment: through dividends, selling their shares in the future when the business has grown,
