Operational Objectives


Operational Objectives

A business has Broad Aims these can be things like for example

'In 10 years time they want to be a leader in Europe'

To achieve this they create objectives as smaller goals, making it easier to achieve larger aims

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Quality- e.g. the product or service, measured by customer satifaction and no. of complaints

Profit- To ensure they can get as mouch as possible

Note. Some objectives can be in conflict with one and another, such as providing both good quality and maintaining a profit

Product Offering- Consistancy draws people in eg. McDonalds is always cheap and offers what oyu want

Efficiency- An organisation needs to ensure that uses its recources efficiently. Things like Labour productivity, Capital used, Staff turnover and Absenteeism should be as efficient as possible.

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Objectives continued...

Costs- Unit, Fixed or Variable costs. A business tries to reduce these as much as possible. It might be through getting more output per unit

Zero hours contracts are a good way of doing this, however you have to be careful not to effect quality.

Volume- Increasing the business' market share. Aldi and Lidl's agressive attack on gorceries in the UK against other companies is an example of this. This is achieved through pricing.

Environmental- Reduce carbon footprint

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Objectives continued 2

Innovation- This is improving incrementally (small bits)

There are products that are creatively distructive, they are disruptive innovation/invention

Things such as facebook, changed the social media and technology market.

Fracking disrupted the oil market, causing prices to drop, effecting everything else from petrol to clothing.

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Strategies and Tactics

Strategies- Long-term plan (2-3 years +)

Tactics- Short-term plan (<1 year)

A business needs to have a plan of where they want to be in the long term

They need to ensure that they look at where the market is going

Similar to how apple moved away from computers on to phones

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Operational Strategies

These are long term decisions
Economies of Scale- How big should we be in terms of production?, -benefits, -cost disadvantages
Sacrafices of getting bigger... -communication loses, -target market lost

Must ensure you are on the right scale, must also consider companies growth

Diseconomies of Scale- Tesco benefitted from bulk buying to be able to get products cheaper. They may however overbuy and not be able to sell it all.

For things such as cars, there is an ultimate/optimum size for a car plant especially if the cars are exclusive/ bespoke like Bugatti

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