business theme 1 - 1.5.3

Business objective

It’s a measurable target a b sets to ahcive within a certain time frame

• They should be SMART → giving direction + allow peformemance to be measured

what is survival as a busines objective

St aim , especially for strategic ups / during crisis

• this can be done by building a consumer base + establish a brand in market . focus on CF mnagaments → ensure b meets break even piont as able to reach sustained level of sales . use penetration pricing to attract customers .

• once ahcive forms shifts to growth / profit maximisation

what is profit maximisation

making the highest amount of profit from a given amount of resources

• enables pay R+D cost . increase dividend for shareholders + raise share price → attract investors . allows reinvestment for LT growth

• May damage reputation if seen as exploitative / quality declines

what is a Tactical example of profit maximisation

shrinkflation

• keeping prices the same but reduce p size so don't have to pass cost onto consumers → avoiding a prise rise that could reduce D / negatively impact b

what are the 6 main types of b objectives

• ales maximisation

• Market share

• cost efficient

• E welfare

• customer satisfaction

• Social objects

1) sales maximisation

prioritising revenue growth over profit

• Profit figures end to be annual so can be examined . motivate staff who’s pay is linked to SV . attract investors who view strong sales data as performed indicators .

• BUT high sales dosnt always mean high profit if cost rise to fast

4) market share

the % of an industries total sales a b holds

• key indicators of comeptitive - loss of MS signals finical problems . High MS strengthens Bargaining power with suppliers + create brand recognition .

• BUT may cut price too heavily to win MS → damages profits

5) cost efficiency

producing the lowest possible unit cost which is crucial in transport + manufacturing where cost make up a large share of total expenses

• crucial in comeptitive market as low cost enables comepete on low price

• achieved through lean production ( elimates resource waste + time ) , cheaper suppliers , paying lower wages to unskilled workers

• BUT over focus on cost cutting may damage quality + brand reputation

6) e welfare

improving the environment + wellbeing of e

• improves morals , motivation , productivity . enhances reputation as an ethical employer → easier recruitment + retention → reduce LT cost

• BUT ST cost rise → lowers immediate profits

7) customer satisfaction

by providing exeunt customer service , delivering high quality p , offering attractive prices

• especialy important in service industries . + achieved through monitoring services + reduces complaints + marinating quality

• this → relates sales , brand loyalty , work of mouth marketing

• but can increase cost ( training , high quality input )

6) social objectives

balance profit making with commitment to social / environmental responsibilities

• done through reducing environmental impact ( sustainable packaging ) . paying faire wages in developing countries

• this builds psotive public image → strengthens brand equity + increases imports as consumers + investors value suitability

• BUT reduces ST profit to build LT comepttivenes + resilience