3.1

• a mission statement is the overall aim of the business and is written as a statement
• corporate objectives are the goals to be completed in order to achieve the mission statement
• functional objectives are specific tasks given to each department in order to work towards the corporate aims and mission statement
• objectives of a sole trader

  survival

  growth

  break - even
• objectives of a plc

  profit maximisation

  increase market share

  market capitalisation
• public sector organisations are run and owned by the government and are public for everyone to use

  private sector organisations are owned by private people and run like a business and they mainly focus on profit
• examples of public sector organisations

  education

  health care

  police
• What does Smart stand for

  Specific

  Mesureable

  Agreed

  Reasonable

  Time bound
• A dividend is a share of the companies retained profit given to shareholders based on the shares they have
• Types of economies of scale

  Purchasing

  Financial

  Social and welfare

  Technical

  Specialisation
• Economies of scope enables us to benefit in other product lines
• Types of economies of scope

  Marketing

  Exploiting product range

  Managerial and administrative

  Research and development
• Unincorporated is when there is no distinction between owners and the business as they are the same legal entity whereas if you are incorporated then the business is a separate legal entity to the owner
• Franchises are where a business sells a sole proprietor the right to set up a business using their name
• A social enterprise has social objectives and surpluses are mainly reinvested for this purpose
• A trade embargo is a restriction on trade with a nation or country
• Common business objectives

  Profit maximisation

  Growth (market share, number of outlets)

  Survival

  Cash flow

  Ethics
• Profit is...

  Motivator

  Measure of success

  Guide for future investment

  Source of finance

  Attractive to stakeholders
• Ordinary share capital is money given to a company in return for a share in the business
• A dividend is a payment made by a company to its shareholders out of profits earned. Allocated as fixed amounts per share so shareholders receive a dividend in proportion to the amount of share they have
• Market capitalisation is the value of the total shares in a company that are fully paid for
• Non profit organisations

  Non government organisations

  Have social, environmental and community aims

  Established for purposes other than financial gain and profits that are gained are reinvested to further their aims

  Volunteers as well as employees
• diseconomies of scale

  as a business gets bigger, their costs become larger

  an example is communication getting worse
• soletrader

  owned and controlled by you

  you make all decisions

  you gain all profit

  a lack of business continuity if anything happens to you

  unlimited liability

  difficult to obtain finance
• PESTLE-C political and legal

  changes in government > changes in legislative agenda > changes in business confidence
• PESTLE-C environment and ethics

  scarcity of natural resources

  issues with this are that resources are distributed unevenly across the planet so access if uneven for different countries. this can lead to trade emargos and political strains as places like Russia have lots of oil and is a major exporter of it and the war there has had impacts on the whole world
• PESTLE-C technological

  e-commerce and m-commerce used for online transactions, EPOS, in app purchases and mobile checkouts

  data collection used for personalisation and trend analysis
• PESTLE-C social

  things like, covid, brexit, veganism, global warming, LGBT, environmentalism, trends, culture wars

  marketing - social changes have increased brand reputation and representation but must consider the political consequences
• PESTLE-C economic

  transactions between the buyer and the seller

  the sum of all transactions is the GDP

  economic cycle - recession, recovery, growth, boom, recession...
• PESTLE examples than can affect a business

  P - government spending, tax policies, business incentives, industry regulations

  E - interest rates, consumer income, exchange rates, GDP

  S - fashions and trends, impact of pressure groups, change in lifestyle, population changes

  T - big data, new production processes, new mobile technology

  L - minimum wage, employment law, health and safety environment legislation

  E - sustainability, pollution, ethical sources
• setting and reviewing strategic objectives

  review and evaluate objectives

  look at mission statement

  look at corporate objectives

  look at internal and external factors

  conduct a SWOT analysis

  make a strategic decision

  consider strategic limitation

  review and evaluate
• economies of scope is growth that enables us to benefit in other product lines. also known ad brand expansion. can be done through marketing (marketing costs spread across different products), exploiting product lines (using existing brands to increase sales of others), managerial and administrative (individuals specialising in one product can become specialists in similiar ones which increases productivity and efficiency)and research and development (more money can be put into it meaning larger business discover more new products)
• microeconomics looks at economic behaviour of individuals, households and companies
• macroeconomics has a wider view and looks at economics on a regional, national and global level
• objective hierarchy

  mission statement -broad goals, communicated to stakeholders

  corporate objectives - gives direction for employees, whole business improvement

  functional objectives - department specific
• how can competition effect a business

  may have better advertising

  may start catering to more demographics

  offer lower prices or discounts

  could have a USP

  may have better e-commerce and m-commerce usage

  could recruit staff from us

  may sell internationally
• 4 types of market

  Monopoly

  Ologopoly

  Monopolistic competition ie restaurants

  Perfect Comletition ie the product is the same from every company and oy differentiators are price and reputation