Business objectives

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  • Objectives
    • What is it?
      • Target you are aiming to achieve
      • You can measure success with it
      • Realistic and achievable
      • Provides a focus
      • Helps with decision making
        • What matters and priority
      • Helps with facing potential investors
        • They can see where the business is going
      • Provides a clear framework for everyone: they can see what role they play and how their contribution will help
        • Motivation
      • SMART
        • SPECIFIC: not generalised (e.g. males over 50)
        • MEASURABLE: ability to make a judgement on progress(e.g. by 10%)
        • ACHIEVABLE: if staff can't see it happening, they won't try
        • REALISTIC: should the business even be trying to achieve this?
        • TIME-BOUND: it needs to have a set time-frame to measure success
    • Types
      • Dependant on business's experience and establishment
        • New businesses more likely to be focused on survival/early growth
          • SURVIVAL: modest short-term financial objectives, high risk of failure: not well-established, not sure about market response
          • ESTABLISHMENT: needs a customer base to get return business, this often happens before launch, good reputation will spread through word of mouth
          • CUSTOMER SATISFACTION: expanding customer base will only happen if there is the quality that customers expect, loyalty is important
          • MARKET SHARE: when there is a limited overall growth in market (e.g. population) businesses have to compete for a share (e.g. supermarkets), some companies have a natural churn as they will be loosing/gaining customers to/from other companies
          • SOCIAL RESPONSIB-ILITY: customers are more comfortable using companies that use some key ethical principles
      • Need to reflect the business's markets
    • Judging business success
      • Varies from person to person
      • Objectives could be used as measuring and diagnostic tools
      • Most businesses use the variance analysis system
        • Objectives could be used as measuring and diagnostic tools
        • Monitoring performance against financial objectives
        • Valuable early warning system
        • Set milestones (expected achievements at certain points in the year-e.g. monthly or quarterly)
      • Balanced scorecard system
        • Lists success measures and monitors success against these
          • Financial
          • Internal organisational processes (efficiency, etc)
          • Learning and Innovation
          • Customer focused


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