Business Aims and Objectives

The aim of a football game is…TO WIN! To defend To score To communicate To stay onside To take the ball forward past the opposition To use tactics to beat the opposition To train well To stop the goals So what are the objectives?

Business aims and objectives – what we know already The main aims of businesses are: –To survive –To maximise profits –To expand –To provide quality goods and services Different types of organisation have different objectives: –Private sector businesses exist to make a profit –Organisations in the public sector exist to provide public services

Let’s now look in more detail at business objectives Objectives start with the mission statement of the business – this sets out their general aims and values Some objectives are financial so can be easily measured e.g. level of sales Some objectives are harder to measure e.g. provide customer satisfaction  What is the benefit of being able to measure an objective?  Which are more important – financial or non- financial?

Maximisation Can you remember what this means? Businesses may try to maximise the following: –Sales – to sell as many goods as possible Profits – high sales, low costs –Efficiency – being efficient enables the business to keep its costs down –Market share – the percentage of all the sales in the market owned by the business Maximisation can conflict with other objectives e.g. customer satisfaction – how?

Satisficing Some businesses do not try to maximise but instead set realistic targets and then are satisfied when targets are reached This is true of most new businesses

Survival Survival means just being able to keep trading This is the main aim of most new businesses To survive, a business must make enough sales to cover its total costs When this happens, it is called breaking even i.e. Break even point is where sales = costs After break even point, the business starts to make a profit

Non-financial objectives Independence – being able to work for yourself and make your own decisions Customer satisfaction– with the product or level or customer service offered – encourages repeat trade Reputation – word of mouth advertising is important in some industries e.g. garages Provide a public service – this is the objective in the public sector