1. Aims and Objectives
Business Studies

2. Objectives To understand the purpose of a business.
To understand why business set aims and objectives.
To be able to give examples of different business aims.

3. Starter Activity
Task 1 - Think about yourself for a minute and list all the aims you have.
This year
Next year
In about 5 years time
Task 2 – Now think of a few aims Lloyds TSB bank would have?

4. Aims To make a profit To increase market share
Magic formula
To increase market share
To provide services to customers
To improve the quality of the goods and products

5. Making a profit
List some typical business that are interested in making a profit
What is profit?
SALES REVENUE - – COST = PROFIT
(Price * quantity ) expenses

6. What is sales revenue Sales revenue = Selling price * no. item sold
For example,
10 CD sold
£10 each
Selling price = 10* £10 = £100

7. 1. Making Profit All private business are interested in making profit.
They want the sales revenue to be more than the total cost
The owners of business are sometimes called ‘entrepreneur and so risk their capital to earn profits.
Some of the profit can be re-invested.

8. Diagram showing making profit
Sales Revenue Expenses
Profit
Less
Reward for owners
Re-invested in the business

9. Increasing market Share
Market share is the proportion of the total market sales that are made by one company to brand or product.
The market sales figure is the total value of sales made by all firms in the market during one year

10. Market share using formula
Sales Brand X
Total market sales * 100 = % market share
Example – Woof brand last year has sales of £30 million CD’s and the total market worth £100 million
£30m .
£100m * 100% = 30%

11. Market share
The business with the biggest market share is known as the MARKET LEADER.
If a business is growing in market that means it is winning customers from its competitors
However if the market is growing, .i.e there are more customers buying the product/service then market share can also grow
Example, Walker is market leader in the crisps industry and golden wonder is small competitors and so they would want increase market share by winning walkers customers.

12. UK supermarket’s market share

13. Providing services
Majority of business in the UK do not manufacture a product and instead provide a service to their customer.
Business include: banks, transport firms, advertising agencies, advertising agencies, retailers etc…
Free services provided by local or central governments include: the NHS, Local authority schools.
However, most business charge for their services

14. Providing services
Businesses such as the Post Office have mixed objectives
Its is owned by the state (government) but it is run like a business and charges for its services.
It has to fulfil obligations such as postal deliveries in rural areas which may not be profitable.

15. Improving quality of the product or service
In most markets customers have a choice about the product or service that they use.
If quality is not good customer may go to competitors.
Customers expect high standards.
Business continue to improve service to better the quality.

16. How can businesses improve the quality
Improving the design of a product, e.g mobile phones, cars etc..
Making them more reliable
Giving a quick service
E.g. restaurants will provide good-quality food at reasonable prices In a pleasant environment.
Taxi firm will offer a reliable service.
Business that cannot provide good quality service will not survive.

17. Other business Aims.
All business need to make a profit esp. for long run
New business may only need to survive (cover all their total costs)
E.g. break-even in the first year, for example.
A large business may aim to develop and launch new products or break into new markets
The aims of a business will affect the behaviour of the firm, e.g. how it organises itself.
Break-even-point – where the Total Revenue = Total cost (so not profit or loss is being made)

18. Mission Statements Mission or vision statement.
Mission statement – gives key aims of the business and how it intends to operate and achieve these aims
E.g Ford Motor Company’s vision is ‘ to become the worlds leading company for automotive products and services’
Vodaphones is ‘ our shared vision is to be the world’s mobile communications leader’.
However Oxfam – ‘Oxfam works with others to overcome poverty and suffering.