Study Notes
Business objectives are the targets that a business works towards, and they can change over time. They provide motivation, increase efficiency, and allow managers to assess success.
- Survival — the ability to continue operating in a competitive market.
Example: A new business focusing on staying afloat during its first year. - Profit — total income minus total costs.
Example: A company aiming to maximize its earnings after expenses. - Return to Shareholders — increasing dividends and share prices to satisfy investors.
Example: A business increasing its dividend payout to keep shareholders happy. - Growth — expanding the size of the business.
Example: A company opening new branches to increase its market presence. - Market Share — the portion of a market controlled by a company.
Example: A firm aiming to capture a larger percentage of the market to reduce competition.
Exam Tips
Key Definitions to Remember
- Business objectives: targets a business works towards
- Market share: portion of a market controlled by a company
Common Confusions
- Confusing profit with revenue
- Assuming growth always means increased profits
Typical Exam Questions
- What are business objectives? Business objectives are targets that a business works towards.
- Why might a business change its objectives? Changes in market conditions, technology, or internal reasons.
- How can increased market share benefit a business? It can lead to reduced competition and better supplier influence.
What Examiners Usually Test
- Understanding of different types of business objectives
- Reasons for changes in business objectives