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Year 12 - Unit 1 Business Aims, Objectives and Organisation September 5 th 2008
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*Keywords sheet will be used throughout lessons – stick in front of note books Look out for every opportunity to fill them in!
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Learning Objective To learn what are typical aims and objectives of business organisations. Learning Outcomes All of you will be able describe what a mission, aim & objective is. Most of you will be able to give examples of business objectives. Some of you will be able to suggest how a business can meet its objectives.
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Starter “A business is an organisation which provides goods or services for its customers” Differences between goods and services. This will help in finding a businesses direction. Activity: BIN CHUCKING!
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It might be easier to look at it this way: Do the following businesses provide goods or services or both? 1. Thomas Cook 2. Cadbury’s 3. Direct Line Motor Insurance 4. Coca-Cola 5. Ferrari 6. Tesco
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Mission A mission statement is a formal statement setting out the aims of the business. E.g. Microsoft’s mission statement is... “To enable people and businesses throughout the world to realize their full potential.”
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On a Mission Can you guess which companies have the following missions… “To make people happy.” Disney “To refresh the world” Coca-Cola “To bring inspiration & innovation to every athlete in The world.* *If you have a body you are an athlete Nike
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The Type of Business determines the Aims and Objectives it sets Mining, farming, market gardening, fishing, forestry Fruit into pies or juice, wood into chipboard, metal into cars Not manufactured – catering, shops, insurance, travel, advertising 1. Primary: Extracting natural resources. Raw materials 2. Secondary: Manufacturing Products. Processing raw materials into manufactured products 3. Tertiary: Providing Services Businesses are generally put into 1 of 3 Industrial Sectors:
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The Type of Business cont... Ownership Key word/termDefinitionExamples Public Sector Private Sector Public corporations - Post Office, BBC Govt. Dept – Civil Service Local Authorities - Councils Sole Traders Partnerships Franchises Limited Companies Government owned or govt. Controlled bodies. Restricted by government guidelines – ‘value for money’ rather than large profits. Job opportunities & secure employment Directly or indirectly in private ownership. General aims are to maximise sales, profits and market share.
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Activity break Take 5 minutes to fill in the table with as many businesses/companies you can list on the activity sheet 1
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Aims Aims are what a business set out to achieve The most important aim of a private business is to make a profit by selling or providing products to people who will pay for them. If a private business does not make a profit, they will get into trouble financially and will eventually go bankrupt.
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Aims: generally long term but can change through the years... 1955 Aims: To survive in business for first year, To sell as many good as possible, To make a profit, To concentrate on selling to the local community 21 st Century Aims: To expand and beat the worldwide competition To Maximise sales and profit To help charities To be environmentally friendly Corporate social responsibilities/ sustainability
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Objectives The objectives are the goals a business sets itself in order to achieve it’s aims An objective is a short-term goal or target which will help to achieve an aim. An objective must be measurable, so that a business can tell what has been achieved.
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Check point! An Aim or purpose expresses, in general terms, what the __________ sets out to do in the _____ term An Objective is a specific ____ the business wishes to achieve to meet the _ _ _ A Business will succeed in its _ _ _ through the achievement of a variety of __________’s
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Linking Aims & Objectives Each aim may have several objectives, e.g. a company who wishes to dominate the market, may have the following objectives: Introduce new products Improve the efficiency of the advertising Raise money to develop new product Raise money for new premises Recruit a new marketing manager
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Review Activity – 20 mins In pairs, choose either: 1. An Existing Business/Company (where you or someone you know works or would like to) or 2. Invent your own Business/Company You are the new Marketing Manager Create a 4 slide presentation to show: Page 1: Logo & short intro (which sector is it?, where based? public or private?) Page 2: Old business AIMS plus new improved ones Page 3: Existing Objectives vs. new improved ones Page 4: Create a new Mission Statement
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Perspective on Objectives... Making a Profit “The profit of a business is the income from the sale of it’s products minus the running costs” An important business objective is to maximise sales, which in turn creates profit
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Profit Making Organisations Profit provides: Resources for business expansion A reward or return on investment from the owners /shareholders in the form of dividends Making a profit will be one of the main objectives of the business Sales revenue – cost of sales = gross profit Gross Profit – Overheads = Net Profits Dividends are paid to the shareholders from the net profit Perspective on Objectives cont..
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Non –Profit making organisations Some examples... A non-profit organisation will not have ‘making a profit’ as one of their objectives It will want to cover its costs and in some cases make a ‘surplus’ Why? Think about a charity or a public corporation (BBC) Perspective on Objectives cont...
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Growth – Increasing Sales & Market Share Beating the competition may be a businesses main objective – the survival of the business may depend on it. A weak Business can be a prime target for a takeover by another business Survival – Objectives can work against each other Price cutting for growth can cut profits Perspectives on Objectives cont..
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Activity – Survival of the fittest A number of businesses are cutting prices in order to increase market share.. 1. Find out the lowest price of a sliced loaf of white bread from a supermarket and the price charged by a local corner shop -What is the difference? -Why is there a difference? -What might happen to the business as a result? 2. Can you think of any other businesses which carry out cost cutting like this? What are those businesses aiming to do?
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Up next... Providing quality (as an objective) Corporate Responsibility Objectives Caring for the environment – sustainability Internal stakeholders : the workplace and it’s culture
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