Edexcel IGCSE Business Objectives PDF

Head to www.savemyexams.com for more awesome resources Edexcel IGCSE Business Your notes Business Objectives Contents Financial & Non-financial Objectives Reasons why Business Objectives may Change...

Head to www.savemyexams.com for more awesome resources Edexcel IGCSE Business Your notes Business Objectives Contents Financial & Non-financial Objectives Reasons why Business Objectives may Change Page 1 of 8 © 2015-2024 Save My Exams, Ltd. · Revision Notes, Topic Questions, Past Papers  Head to www.savemyexams.com for more awesome resources Financial & Non-financial Objectives Your notes Financial Objectives Business objectives are targets that guide operations and drive growth in an organisation Setting and sharing clear objectives can help a business to succeed for several reasons Business owners have a focus for their decision making Employees have common goals to work towards and can be motivated to achieve targets Performance can be weighed up against objectives and suitable adjustments made for future success Objectives are most useful when they are SMART Specific: it states precisely what is to be achieved Measurable: the desired outcome is expressed in quantitative terms Achievable: it is possible with the people and resources involved Realistic: it is possible with the resources the business has at its disposal Time specific: it is clear when, precisely, the objective is to be achieved An example of a SMART objective might be for a business to increase its sales revenue by 10% by the end of the year Financial objectives are specifics goal related to the financial performance, resources or structure of a business They are particularly important in the private sector as owners are likely to want to make money Main Types of Financial Objectives Objective Explanation Examples Page 2 of 8 © 2015-2024 Save My Exams, Ltd. · Revision Notes, Topic Questions, Past Papers  Head to www.savemyexams.com for more awesome resources Survival Survival involves keeping a business Camping Sous les Étoiles in France operating for a certain amount of focused on survival during the 2020 global Your notes time, such as its first year of pandemic as travel restrictions limited operation holidays Survival is also a key focus during periods of challenging business conditions or when strong competition emerges Profit Profit is the difference between the Belgium's Brewery de Blaugies aims to total sales revenue and the total maximise profits to fund the building of costs of the business new production and distribution facilities that are needed for its planned expansion Profit can be reinvested into a business or shared with business owners as a reward for risking their investment Profit maximisation involves making as much profit as possible Sales Selling increasing volumes of France's Le Creuset has increased sales of products can help a business to its luxury cookware across Europe by increase its market share opening sales outlets and improving its online store High sales can also increase awareness of a business and its brands Large-scale businesses often benefit from lower average unit costs Page 3 of 8 © 2015-2024 Save My Exams, Ltd. · Revision Notes, Topic Questions, Past Papers  Head to www.savemyexams.com for more awesome resources Market Market share is the proportion of a Since 2018, Ediya Coffee has increased share market controlled by a particular the number of outlets it operates in South Your notes company, brand or product Korea and introduced a delivery service to gain market share from leading rival Paris Businesses with high market share Baguette can dominate the market and become well-known Market leaders may be able to charge higher prices than rivals and make more profit Financial Business owners may simply want to Reema Koch runs her small eco security earn a living from the risk and effort guesthouse in Malta during summer they put in months and spends winter working with animal charities in Turkey Satisficing may be enough for a business owner to pursue a desired lifestyle Non-financial Objectives Non-financial objectives are targets that are not directly connected to making money Achieving non-financial objectives is often the main focus of businesses in the public sector and the voluntary sector Many profit-making businesses also set non-financial objectives that compliment their key financial objectives Main Types of Non-financial Objectives Objective Explanation Examples Social Providing a reliable, high-quality After visiting Argentina in 2006 Blake service to a particular community is Mycoskie set up TOMS Shoes, the focus of many public sector pledging to donate one pair of shoes organisation for every one sold Charities and cooperatives are often focused on improving human Page 4 of 8 © 2015-2024 Save My Exams, Ltd. · Revision Notes, Topic Questions, Past Papers  Head to www.savemyexams.com for more awesome resources well-being or the environment Businesses increasingly aim to meet Your notes the needs of a range of stakeholders by providing employment opportunities, being eco-friendly or contributing to the local community Personal Achieving success by doing Former schoolteacher and keen satisfaction something enjoyable can be environmentalist Laura Hirsch satisfying for business owners established Grüne Kleinvolk in 2022 as a pre-schoolers' forest activity Spotting an opportunity and centre in Germany's Schwarzwald pursuing it as a business can be a matter of great pride Challenge Using and developing skills can Since starting her interior design present interesting challenges business in Malta in 2013 Kristine Bonnici has achieved qualifications in Some business owners love solving accountancy, marketing and problems or enjoy seeing the results business leadership of hard work Independence Independence to make their own After being made redundant in 2020 & control decisions can be a key motivator for sound engineer Vinay Patel set up a entrepreneurs talent agency in Mumbai, focused on sourcing new talent for the city's A business owner may want to successful film industry control their own time and business direction without interference from others Examiner Tips and Tricks You may be asked to give an example of a business objective Look at the question carefully - has it asked you to give a financial objective or a non-financial objective? Page 5 of 8 © 2015-2024 Save My Exams, Ltd. · Revision Notes, Topic Questions, Past Papers  Head to www.savemyexams.com for more awesome resources Reasons why Business Objectives may Change Your notes Changes in Business Objectives Business objectives may change over time due to a number of internal factors As a business grows its objectives may change from survival to profit or sales maximisation Retiring business owners may choose to spend less time running the business Its objective may change from increasing market share to maintaining financial security A new leader or manager may set challenging targets or implement their preferred social objectives Business performance can require a change in objective E.g. A business that has succeeded in becoming the market leader may now decide to focus on maximising profit Businesses may also need to change their objectives in response to external factors Impact of External Factors on Business Objectives External Explanation Example Factor Page 6 of 8 © 2015-2024 Save My Exams, Ltd. · Revision Notes, Topic Questions, Past Papers  Head to www.savemyexams.com for more awesome resources Market Market conditions include the level In the face of increased competition conditions of competition in a market and its Maxi's Fahrschule in Lübeck has reduced Your notes rate of growth prices in order avoid losing its learner driver customers to cheaper rivals Increased competition may prompt a change in objective from maximising profit to maintaining market share In fast-growth markets businesses are likely to pursue objectives of maximising sales and profits If market growth is slowing objectives may focus on growing market share rather than increasing sales Technology New production technology may Following the launch of JustEat and support a profit maximisation UberEats services in the Amsterdam objective as manufacturing costs region the Vegan Junk Food chain has are likely to fall as output rises been able to focus on increasing profits to fund the opening of new outlets in Improvements in e-commerce Germany and Spain software may help increase sales Investment in robots could allow manufacturing businesses to improve working conditions for their employees Legislation Legislation refers to laws or In 2023 the EU ban on many single-use regulations that compel individuals plastics increased costs for businesses or organisations to behave in a such as France's SEF Packaging which had desired way to research new materials and invest in new production processes whilst New laws may increase accepting it would achieve lower profit business costs and force the margins firm to focus on increasing sales volumes The introduction of new regulations to protect the environment has increased business emphasis on Page 7 of 8 © 2015-2024 Save My Exams, Ltd. · Revision Notes, Topic Questions, Past Papers  Head to www.savemyexams.com for more awesome resources social objectives such as reducing their carbon footprint Your notes Examiner Tips and Tricks You may be asked to outline an impact of changing business objectives. Look for clues in the case study about the effects on stakeholders such as employees, owners or suppliers. You will need to use this context to support your answer. Page 8 of 8 © 2015-2024 Save My Exams, Ltd. · Revision Notes, Topic Questions, Past Papers