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An objective is a statement of specific outcomes that is to be achieved
Aims · how much profit the business wants to earn
· what level of sales it the target for the next year
· how fast the business wants to grow
· how much profit is to be paid out to shareholders in dividends
· how much market share the business wants to get
Corporate Objectives
· about the business as a whole
· usually set by the top management
· provide the focus for setting more
detailed objectives
· focus on the desired performance
and results of the business
· cover a range of key areas where
the business wants to achieve
Functional Objectives
· set for each major business function
and are designed to ensure that the
corporate objective are achieved
· as a business expands and
becomes more complex it will divide SMART Objectives
its activities into different business Specific
functions, these will have their own Measurable
objectives: finance & administration, Achievable
marketing & sales, production & Relevant
operations, human resource Time Bound…read more

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Economies of Scale
Why Grow? Larger firms can produce at lower
average cost than smaller firms. They
can pass on these economies of
Diversification scale to consumers as lower prices
· larger firms can afford to produce more products which increases sales, market share
than smaller firms and their profit.
· able sell into different markets, reducing the risk that · purchasing economies: buying its
a decline in sales of one product will harm the supplies in bulk so cheap unit price
business and less threat to their profits · marketing economies: cost of
advertising campaign is a fixed cost
Financial Support
so they will spend less per unit
· larger firms are less likely to fail than smaller firms
advertising its products
· able to borrow money easily from banks so will find
· managerial economies: can afford
it easier to survive cash flow problems
to employ specialist managers who
· more likely to get financial support from the
have expert knowledge
government as they employ lots of people
· financial economies: banks are
prepared to lend more money to
Personal Vanity
larger firms at lower interest rates as
· owners enjoy the power and status that comes from
larger firms are more likely to pay
owning a large business
them back
· technical economies: can afford to
Domination of the Market
operate more advanced machinery
· larger the market share a firm has the more it can
· risk bearing economies: can
control the price of its products
afford to sell a range of products into
· fewer threats from competitors and could eliminate
many different markets
rivals by charging prices that they can't compete with…read more

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Problems With Growing
· it is harder for the founder/owner to remain in control
· it is harder to remain close to customers
· harder and slower to make decisions for the whole
business…read more

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Organic Growth
Organic Growth/Internal Expansion is increasing sales by using
businesses own internal resources.
The firm can produce more of its current products to sell in its
existing markets. The firm can sell its current products into new
markets. The firm could launch a new product which is a
similar product to existing ones (line extension) or a completely
new product (diversification).
Advantages Disadvantages
· easier to raise finance · takes a long time to achieve growth
· economies of scale · growth achieved can be dependant on the
· more profit of the overall market
· inexpensive to achieve · hard to build market share if the business is
· workers have more job security already the market leader
· less riskier than taking over other
· can be finances through internal funds
· builds on business strengths
· allows the business to grow at a more
sensible rate…read more

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Such a great revision resource, helped me so much, thank you!!!

Jordan goldsworthy


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