1.5.1 Business objectives 1. Learning Outcomes To understand what is meant by a business objective and the objectives available to a business To understand.

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 objectivesSMART objectives

• Business objectives are the stated goals of the business

• To be effective, objectives should be SMART:

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SMART

SpecificSMeasureableM

AgreedARealisticR

Time-framedT

Clickhere

What do you understand by these characteristics?

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…..

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

•Survival•Profit

•Growth•Market Share

Financial Objectives

•Employees•Customers

•Environmental

Non-Financial Objectives

Common business objectives

• Survival• Profit maximisation/profitability• Sales turnover• Market share• Satisficing• Growth

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When might each of these objectives be most appropriate?

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 objectivesTask

• 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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