Unit 1 - 1.4 - Business Aims And Objectives Flashcards
What are business objectives?
The aims of a business
List some common business objectives.
- Survival
- Profit
- Growth
- Providing a service
What does survival in a business context refer to?
Concerned with a business’ ability to continue to trade in the long term.
Can businesses survive without making a profit?
Yes, businesses may survive for a short period without making a profit.
What is profit in relation to business owners?
The reward to owners for taking a risk by investing their money in the business.
Why do many businesses seek to maximize profits?
For the benefit of the owners.
What is a key objective of business growth?
Increasing sales or market share.
How does growth act as a way of increasing profits?
By increasing sales or market share.
What do some business owners seek in providing a service?
The satisfaction of giving customers a good service.
How can providing a service be seen in terms of profitability?
As a way of making a profit as customers will return and new customers will use the business.
What are some reasons why objectives might change as businesses evolve?
Objectives might change because:
* they are at different stages of their development
* their owners have different motivations
* they are influenced by different market conditions
* they are experiencing different economic conditions.
These factors highlight the dynamic nature of business objectives.
Fill in the blank: Businesses have different objectives because they are at different stages of their _______.
[development]
True or False: Business objectives remain static throughout the life of a business.
False
What influences the change in business objectives aside from the development stage?
Different market conditions and different economic conditions.
These influences can significantly impact strategic planning.
What can motivate business owners to change objectives?
Different motivations of the owners.
Owner motivations can include personal goals, financial targets, or market opportunities.
What does ‘Evolving’ refer to in a business context?
The way a business develops and changes over time, by becoming bigger or smaller and by selling different goods and services or a wider range, as well as selling in different places and in different ways.
What is a primary objective for a new business?
Survival
A new business aims to establish itself by gaining customers and eventually making a profit.
During what circumstances might a business prioritize survival?
During a downturn in economic activity or in a highly competitive market
Survival is crucial for businesses facing economic challenges or intense competition.
What minimum level of financial return do new businesses seek?
Minimum level of profits
New businesses require profits to help them survive.
Why do established businesses seek profits?
To reinvest and expand
Profits help established businesses grow and develop further.
How do good profits affect investor interest?
Encourage new investors to invest
Good profits signal potential growth, attracting investment.
What objectives might new businesses set to ensure their survival?
Growth of sales or market share
These objectives are essential for new businesses to thrive.
Why do established businesses want to grow?
To gain more power in the market, reduce competition, and increase profits
Growth helps established businesses strengthen their market position.
How does providing a good service benefit a business?
Helps build a good reputation
A strong reputation attracts new customers and retains existing ones.
What can sometimes help a business survive or increase profits?
Providing a good service
Quality service can be a crucial factor in a business’s success.
What satisfaction might some business owners derive from their work?
Running a business that is useful to customers
Owners may find personal fulfillment in serving their customers while making a profit.
