U3AOS1 - Business objectives Flashcards
What are the business objectives?
P to make a profit
S to meet shareholder expectations
M to increase market share
E efficiency
M to fulfil a market need
E effectiveness
S to fulfil a social need
Business objectives?
Statements of desired achievement which provide direction for the business
How to make a profit?
maximising the margin between revenue and expenses is a major indicator of business size and success from the sales of their goods and services
Revenue - expenses = profit
- Find ways to increase revenue
- Find ways to reduce expenses
- Increasing marketing strategies
- Diversity product range
How to increase market share?
the proportion of total sales in a market strategy or industry compared to like-businesses
% of sales compared to others in the same market
- Keeping an eye on the strategies of competition
- Differentiate from competitors
- Take over competitors ($$$)
- Review pricing strategies to offer low than competitors
- Increase advertising of special offers
- Sponsorship of local community groups
How to meet shareholder expectations?
investors assume that they will get a return on their investment and that it will increase in value
- Make a profit/ increase in profits
- Increase value of company shares
How to fulfil a market need?
providing a good service that is currently not available or is limited in supply/ accessibility/ affordability
- Meet customer expectations
- Provide a good service that is not otherwise available to a market
- Do market research
How to fulfil a social need?
providing a good service that contributes to or benefits the community or environment in which it operates
- Providing opportunity for local unemployed people
- Improving human wellbeing
- Assisting disadvantaged people in the community
- Focusing on the environment like minimising waste
- Minimise waste from products
- Flexible work arrangements for employees
How to improve efficiency?
- Invest in technologies/ innovations that minimise waste of materials or time dedicated to tasks
- Reviewing process of how ‘things are done’ to look towards simplifying processes
- Using up-to-date technology and innovative processes
- Having highly skilled employees
- Using best quality components for the product so waste and inefficiencies are reduced
How to improve effectiveness?
- Regular review of KPIs throughout the financial year
- Implement strategies of KPI benchmarks are not being achieved
- Change management
What is efficiency?
Efficiency is when a business uses its resources to achieve its objectives. (Minimise inputs to maximise outputs)
What is effectiveness?
What are financial objectives?
relate to the desired financial performance of the business e.g profit, market share, shareholder expectation
What are social objectives?
relate to the role of business in the community e.g. provision of community service
What are marketing objectives?
relate to the way in which customers know about the products/services and how to sell more
