In this lecture notes you will find in depth notes for the topic "Business objectives" Theme 1 of Edexcel A level business which is called marketing and people.The textbook "Edexcel AS/A level BUSINESS, 5th edition, Pearson" is referenced in these lecture notes. They are really well written and si...
LESSON 20
.Business objectives
It’s a goal or aim that a business wants to achieve. The best objectives are smart and not
vague, so that everyone in the business knows what direction they are going.
Example: a business
wants to increase
turnover by 8% in
the next 12 months.
.Survival
It’s a very important objective.
A business in the first year might just have survival as the objective while it builds a
customer base and establishes itself in the market.
Use of penetration pricing.
The objective is to reach a sustainable level of sales that allows the business to reach its
breaking-com point.
.Profit maximisation
The aim of most businesses because it will give them the capital needed to expand and to
grow the business.
In the short-term survival through good cash-flow management is more important than profit
maximisation.
Shrinkflation= where a manufacturer keeps the price the same, but makes the product
smaller (used in the supermarkets)
.Other objectives
- Sales maximisation (try to increase sales)
- Market share
- Cost efficiency (lowering the cost,i.e. Find new suppliers to get cheaper resources.
drawback: product quality and customer service may suffer).
- Employee welfare (if it’s improved they will be happier, more motivated and
productive)
- Customer satisfaction
- Social objectives (it’s shown concern for the local area. It should promote prosperity
and develop a strong relationship so that they can co-exist harmoniously.)
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