Business Objectives- What a business wants to achi
Different businesses have different objectives but usually their main objective is to MAKE A PROFIT! other objectives include...
- becoming the biggest in the market
- having the highest quality goods
- to maximise sales
- the maintain stability
- to have independence
- high customer satisfaction
- to limit environmental damage
However, Profit is NOT an objective for "not for profit" organisations (such as charities) and in the public sector(which is government run)
"More than profit" organisations use their profit to beneift society and have social objectives such as helping the homeless.
Reasons for starting a business
People start businesses for different reasons, including:
- to gain finanical success
- to experience the freedom of being their own boss
- to give themselves the enjoyment of a challenge
- to benefit others
Enterprise-identifying and taking advantage of business opportunities
- starting or expanding a business
- meeting a gap in the market
Market niche- a small market featuring customers who have particular needs which are often filled by small companies as bigger companies aim to target the majority of consumers.
Qualities of successful Entrepreneurs
Entrepreneurs need to be able to create a successful business by:
- gathering resources (particularly money) in order to start a business
- be able to seek out investors who can support the company
- have the desire to make a profit
- be able to take a calculated risk following research
- have the initiative to seize new opportunities
- be able to make tough decisions independantly
- have good networking skills in order to communicate with others
there are two types of firms...
MARKET DRIVEN- which make useful products that people want, after analysing the market
PRODUCT DRIVEN- whcih design products and then try to sell them, usually producing unwanted products
- market driven firms obviously do better as they make what customers want
A business needs to please their customers in order to do well
Before a customer makes a purchase
- business must do market research and produce products that are reliable and fit for purpose
During the purchase
- business must fulfil the requirements of their customers in order to persuade them to make repeat purchases
After the customer has made their purchase
- business must provide reliable customer service for when a customer may face problems- warranties/after sales support
A stakeholder is someone who is affected by the success of a business.
There are two types:
Internal (within the business)
- owners- make a profit from business success
- employess- get job security/ decent wages
External (outside of business)
- customers- want high quality/low cost goods
- local community- jobs/sponsers/facilities
- government-recieves tax
- competitors- may lose own customers if another business is sucessful
Measuring Business Success
Success of a business means different things for different stakeholders (dependent on their interests):
The owners view their business a success if it meets the objectives and targets they have set.
Success is measured by:
- Measuring growth- amount of employees/products
- Market share- firms sales divided by total sales multiplied by 100
- customer satisfaction
- ethical considerations- what society believes is morally right
- sustainability- limiting environmental impact
Businesses are made up of:
- Directors- who are responsible for strategies (giving the business direction)
- Managers-carry out strategies
- Supervisors- look after projects/groups of people
- Operatives- workers who carry out tasks
the structure of a business can be shown in 4 ways...
- a hierarchical system- this means communication is slow as info has to pass though many levels.
- flat hierachy- communication is faster as there are less levels, however supervisors may feel overwhelmed by having to look after so many people.
- Matrix- more flexible people can work on more than one project, managers may give people conflicting tasks
- Circular- people feel part of a team
Offices can either be Open Plan or Cellular:
- improved communication
- easy supervision
- little privacy
- more privacy
- difficult to supervise
- less communication
Ergonomics is the relationship between workers and their environment.
- office equipment is ergonomically designed to make workers more comfortable
- without it, equipment can cause RSI (repetitive strain injury), back pain and eye strain