Transcript 1.5.1 Business Objectives Pres

1.5.1 Business objectives
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Learning Outcomes
• To understand what is meant by a business
objective and the objectives available to a business
• To understand why business objectives are
important
• To understand that businesses can have more than
one objective
• To understand the objectives of a social enterprise
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Starter – Match up the key terms
with their definitions
Profit
The firm or product with the highest
market share in a given market
Market Leader
The amount of money a firm makes from
selling it’s goods and services
Revenue
When a firm is neither making a profit or
a loss.
Total Costs
Revenue – Total Costs
Breakeven
The percentage of sales in a market that
are made by a particular product or firm
Market Share
The amount of money that a firm spends
in order to produce goods and services.
Business objectives
SMART objectives
• Business objectives are the stated goals
of the business
• To be effective, objectives should be
SMART:
Click
S
Specific
T
Time-framed
here
M
Measureable
SMART
R
Realistic
A
Agreed
What
do2016you understand by these
characteristics?
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2006-10
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Are these objectives SMART?
• To lose 15kg within 2 weeks
• To save $600 dollars within the
next year
• To achieve at least 4 grade 7’s in
the IB in June
• To get fitter by Christmas
Hierarchy of Objectives…..
Corporate Aims
Strategic Objectives
Tactical/Operational
Objectives
Individual Objectives
Why do the arrows flow in this direction?
Importance of Objectives….
• Why are Objectives so important?
Business Objectives
• The main motivation for setting a own business is to
make a PROFIT
• However people who set up in business may want to
achieve a number of objectives
• These can be Financial or Non-Financial
Financial
Objectives
Non-Financial
Objectives
•Survival
•Profit
•Growth
•Market Share
•Employees
•Customers
•Environmental
Common business objectives
•
•
•
•
•
•
Survival
Profit maximisation/profitability
Sales turnover
Market share
Satisficing
Growth
When might each of
these objectives be most appropriate?
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Task - 5 mins
• Choose 2 businesses and use the internet to try and
research their objectives
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Discuss:
Why business objectives can
change over time?
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Business objectives
Lets Get Practical
Business objectives
Task
• You have recently decided to set up a shop selling..?
– Write a mission statement for the shop
– Write down two SMART
objectives for the
business, explaining
your reasoning
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Would your objectives
Change If….
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Your market was
experiencing rapid growth?
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The National or International
Economy went into
recession?
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Your market was facing
increasing competition?
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Your market was in decline?
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Your business faced a crisis
e.g. a negative press release
about use of child labour in
your business?
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Social Enterprises…
What are they?
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Social Enterprises
• A business with a social or environmental mission
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Task
• Go to this website:
• http://www.socialenterprise.org.uk/
• Go to the members directory and view some social
enterprises.
• Find out:
> What they do
> Consider their business objectives
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