unit 1 aims and objectives of a business Flashcards
name me examples of aims
survival
increased profit
growth
increasing market share
definition of aims and objectives
An aim or objective is a statement of what a business is trying to achieve over the next 12 months.
what is the difference between aims and objectives
objective meaning:
Having an objective is useful because it helps staff to focus on shared aims. A business could instruct its staff to work towards increasing sales by 10% by the end of the year.
an aim is a long term goal that a business wants to achieve
what is SMART aims
Specific: clearly state what is to be achieved, eg increased profits.
Measurable: the desired outcome is a number value that can be measured, eg increase profits by 10%.
Agreed: all staff are involved in discussing and agreeing an aim.
Realistic: the target is possible given the market conditions and the staff and financial resources available.
Timed: the target will be met within a given period of time, eg 12 months.
An example of SMART
An example of a SMART objective is ‘to increase profits by 10% within the next 12 months’.
An example of business aim changing
A small start-up business may aim to survive in the first year. Once successful, the business then sets itself the objective of increasing profits or growing in size.
Alternatively, a profitable business that is hard hit by an economic recession. Faced with declining sales, a business may change its objective from growth or making a profit, to simply surviving.
why do aims change in a business
The aim of a business can change over time. This can happen in response to internal factors, such as business growth, or in response to external factors, such as an economic recession.
aim - profit
most businesses aim to be profitable, this means to make as much money as possible.
maximizing profits could be a problem to customers as the businesses may not value their feelings about how much it will cost for them
social and charity enterprise may not value profit and it is the customer service first
aim- growth
Growth is important to raise profits
especially large companies
increase market share, sale growth and elimination of new products competition and to create new outlets
aim - survival
most basic aim is to survival (mostly for new businesses)
the first so months can be faced with sales dropping a lack of customers and reduced market share
these are usually temporary problems
aim- providing a service
closely linked to making a profit
good services attract more customers and will approve of their business and it will have a good reputation
smaller companies may value this than profit
aim- ethical
usually make-up companies that would not test on animals which will give them a good reputation which can also lead to more profit
fair trade that pays farmers more but their products may be slightly more expensive than normal brands
aim- environmental
recycling wasted products are making the product recyclable for user
low carbon foot print e.g. having food which are from local British farm rather than abroad
Are all aims the same for all businesses
no all businesses would have different aims at different times
new business aims
compete with other businesses
win over customers by lowering prices
have qualities that other older businesses may not have
