Business Objectives
Cards (27)
- Types of business objectives:
- Sales Maximisation
- Market Share
- Cost efficiency
- Employee welfare
- Customer Satisfaction
- Social Objectives
- Survival
- Profit Maximisation
- Sales Maximisation is achieving maximum amount of sales possible
- Market Share is the proportion of a market one business controls
- Cost efficiency is minimising unit cost is the production process
- Employee Welfare is where employees work for the betterment of workers.
- Customer Satisfaction is how well a good/service meets the expectations of the customer.
- Social Objectives are objectives which are to be achieved for the benefit of society
- Business Objectives need to be SMART
- SMART stands for:
- Specific
- Measurable
- Achievable
- Realistic
- Tim-Bound
- Survival is ensuring the business continues to operate
- Profit Maximisation is ensuring the business makes as much profit as possible
- Advantages of Cost Efficiency:
- Ensures Profit
- Disadvantage of Cost Efficiency:
- Negative impact on quality
- Advantage of Employee Welfare:
- Employees increased productivity
- Disadvantage of Employee Welfare:
- Costly to the business
- Advantage of Customer Satisfaction:
- Gains customer loyalty
- Disadvantages of Customer Satisfaction
- It is subjective and can be difficult to measure.
- Advantages of Social Objective:
- Could charge higher prices
- Disadvantage of Social Objectives:
- Conflicts with the profit motive
- Advantages of Survival:
- Drives Employees to be successful
- Disadvantages of Survival:
- Staff might not want to take risks
- Advantages of Profit Maximisation:
- Higher profit means higher investments
- Disadvantages of Profit Maximisation:
- May forget about employee welfare
- Advantages of Sales Maximisation:
- Push Rivals out of business.
- Disadvantages of Sales Maximisation:
- Low profit margins may lead to struggling to survive
- Advantages of Market Share:
- Familiarity gives customers confidence
- Disadvantages of Market Share:
- It's approximate, not accurate