Business objectives
- Created by: noe
- Created on: 21-09-20 15:19
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- Business objectives
- Aim: what a business tries to achieve in the long term
- Objectives: goals or targets set by a business to help achieve its long-term purpose
- They must be specific, measurable, agreed, realistic and time specific
- Necessary because...
- Employees need something to work towards to which motivates them
- Without them owners might lose control and allow the business to become aimless
- They help owners decide where to take a business and the necessary steps
- Survival
- Most important when a business first starts or if new competitors enter the market
- Profit maximisation
- Owners will try to keep cost down while rising prices as high as possible without damaging customer loyalty
- Price skimming often used in luxury goods which have price inelastic demand
- Criticised for being too short-termist and can damage relationships with other stakeholders
- Owners will try to keep cost down while rising prices as high as possible without damaging customer loyalty
- Sales maximisation
- Growing sales is a positive sign and this can raise profits and business might win market share. As a business grows, specialist sales staff may be employed
- Market share
- This helps to increase revenue and raise profile of the business. Business might be able to dominate market having more control over price. Also possible to lower costs as output levels will be higher
- Cost efficiency
- This might be done by laying off staff, finding cheaper supplies or increasing usage of recycled materials
- If costs are lower, profit margins will be higher and they might gain a competitive edge in the market but product quality or customer service might suffer.
- This might be done by laying off staff, finding cheaper supplies or increasing usage of recycled materials
- Employee welfare
- If workers are happier, better motivated, more productive, cooperative and flexible and less likely to leave
- This can be achieved by improving working environment and ensuring staff have proper breaks and equipped with proper equipment
- If workers are happier, better motivated, more productive, cooperative and flexible and less likely to leave
- Customer satisfaction
- Satisfied customers more likely to return
- Might be achieved by providing a platform of customer feedback or dealing quickly and effectively with complaints
- Social objectives
- Developing a strong relationship with local community by providing employment or minimising pollution
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