1.1.1

Business Aims

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Main Business Aims and Objectives

An aim is an ultimate purpose. An objective is a goal that is sought in order to achieve an aim. Some main business aims and objectives are:

Survival aim

Survival aim

  • More than half of new businesses in the UK don’t survive beyond 5 years.
  • Survival is therefore one of the biggest short-term aims for new businesses.
Profit maximisation aim

Profit maximisation aim

  • For most for-profit businesses, maximising profits is their main aim.
  • Some businesses may sacrifice short term profits in order to maximise profits in the long term.
Growth objective

Growth objective

  • For lots of firms, one of their key objectives is to grow.
  • Growth can mean lots of different things - firms can grow sales, grow the number of customers or grow the number of employees.
  • Companies may also look to expand internationally as well as expanding by introducing different products.
  • Dyson, for example, started the business by producing vacuum cleaners and have recently expanded into the market for hair dryers and electric cars.
Increase market share objective

Increase market share objective

  • Market share is the percentage of sales that a company makes relative to all the sales made in that market.
  • New companies start with a 0% market share, so increasing market share is an important goal for them.
  • Gaining market share involves stealing or taking customers from competitors or getting new customers to enter the market.

Main Business Aims

An aim is an ultimate purpose. An objective is a goal that is sought in order to achieve an aim.

Maximise shareholder value objective

Maximise shareholder value objective

  • For limited companies (both private and public), maximising value for their shareholders is a key objective.
  • Shareholders get value from a share of a company’s profits, but also by selling the shares in the future.
  • The overall value of a business (how much they could sell it for) increases depending on how well the business is doing. So, maximising profits or growing the business can maximise shareholder value.
Social and ethical objectives

Social and ethical objectives

  • Some firms make sure that they do business without having a negative effect on society or the environment.
  • Often this means firms using renewable energy sources and funding projects aimed at benefiting society.
    • For example, Jaguar Land Rover uses recyclable materials in its production of cars.
    • For not-for-profit firms, especially charities, this is usually the main goal of the company.
Customer satisfaction

Customer satisfaction

  • This objective measures how happy the customers are with the good or service they are receiving from a company.
  • It can be a key objective because it has a large effect on both short-term and long-term profits.
  • If customers are not satisfied they won’t buy the product again and might instead buy competitors’ products.
Jump to other topics
1

Business Activity & Influences on Business

1.1

Business Objectives

1.1.1Business Aims1.1.2Business Objectives1.1.3Business Objectives Change Over Time1.1.4End of Topic Test - Business Aims1.1.5Diagnostic Misconceptions - Profit
1.2

Types of Organisations

1.2.1Sole Traders & Partnerships1.2.2Limited Companies1.2.3Limited Liability1.2.4Unlimited vs Limited Liability1.2.5Not For Profit & Franchises1.2.6Multinational Companies1.2.7End of Topic Test - Business Ownership1.2.8Application Questions - Business Ownership1.2.9Diagnostic Misconceptions - Company vs Business1.2.10Diagnostic Misconceptions - Owners vs Shareholders
1.3

Classification of Businesses

1.3.1Sectors
1.4

Decisions on Location

1.4.1Location
1.5

Business & the International Economy

1.5.1Globalisation1.5.2Exchange Rates
1.6

Government Objectives & Policy

1.6.1Government Objectives1.6.2The Government & Business Activity1.6.3Interest Rates1.6.4Interest Rates - Calculations1.6.5Diagnostic Misconceptions - Recessions
1.7

External Factors

1.7.1External Factors
1.8

What Makes a Business Successful?

1.8.1Measuring Success1.8.2Reasons for Failure
2

People in Business

2.1

Internal & External Communication

2.1.1Communication
2.2

Recruitment & Selection Process

2.2.1Types of Employment2.2.2Recruitment Stages2.2.3Effective Recruitment2.2.4Legal Controls Over Employment2.2.5Diagnostic Misconceptions - Internal Recruitment
2.3

Training

2.3.1Training
2.4

Motivation & Rewards

2.4.1Motivation in the Workplace2.4.2Financial & Non-Financial Methods2.4.3End of Topic Test - The Workforce2.4.4Application Questions - The Workforce2.4.5Diagnostic Misconceptions - Money
2.5

Organisation Structures

2.5.1Organisational Structures2.5.2Centralised vs. Decentralised Structures2.5.3Tall & Flat Organisations2.5.4Functional Areas Within a Business2.5.5End of Topic Test - Org Structure
3

Business Finance

3.1

Sources of Finance

3.1.1Internal & External Sources of Finance3.1.2Factors Affecting Sources of Finance
3.2

Cash Flow Forecasting

3.2.1Cash Flow3.2.2Consequences of Cash Flow Problems3.2.3Cash Flow - Calculations3.2.4Solutions to Cash Flow Problems3.2.5Diagnostic Misconceptions - Cash Flow
3.3

Cost & Break-Even Analysis

3.3.1Costs, Revenue & Profit3.3.2Profit, Average Unit Cost & Interest3.3.3Costs - Calculations3.3.4Revenue - Calculations3.3.5Break-Even Analysis3.3.6Profit & Losses - Calculations3.3.7End of Topic Test - Finance3.3.8Grade 9 - Finance3.3.9Diagnostic Misconceptions - Fixed Costs3.3.10Diagnostic Misconceptions - Break-even
3.4

Financial Documents

3.4.1Financial Statements3.4.2Income Statement3.4.3Understanding Business Performance
3.5

Account Analysis

3.5.1Business Calculations3.5.2Gross Profit - Calculations3.5.3Net Profit - Calculations3.5.4Business Calculations 23.5.5Business Calculations 33.5.6Liquidity
4

Marketing

4.1

Market Research

4.1.1Market Research4.1.2Forms of Market Research
4.2

The Market

4.2.1Customer Needs4.2.2Satisfying Customer Needs4.2.3Market4.2.4The Competitive Environment4.2.5Market Segmentation4.2.6Market Mapping - Price vs Quality4.2.7End of Topic Test - Marketing4.2.8Application Questions - Marketing4.2.9Diagnostic Misconceptions - Competition
4.3

The Marketing Mix

4.3.1Price4.3.2Price Penetration4.3.3Other Forms of Pricing4.3.4Product Design4.3.5The Product Life Cycle4.3.6Extending Existing Products4.3.7New Products4.3.8Benefits and Risks of New Products4.3.9Promotion4.3.10Public Relations and Sales Promotion4.3.11Sponsorship & Social Media4.3.12Product Placements4.3.13Promotional Mix4.3.14Place4.3.15Place 24.3.16Place 34.3.17M-Commerce4.3.18Benefits & Drawbacks of M-Commerce4.3.19End of Topic Test - Marketing Mix4.3.20Grade 9 - Marketing Mix4.3.21Diagnostic Misconceptions - Decreasing Price4.3.22Diagnostic Misconceptions - Advertise vs Promote4.3.23Diagnostic Misconceptions - Social Media
5

Business Operations

5.1

Economies & Diseconomies of Scale

5.1.1Economies of Scale5.1.2Diagnostic Misconceptions - Economies of Scale
5.2

Production

5.2.1Production Processes5.2.2Flow and Batch Production5.2.3Production Efficiency5.2.4Technology & Production5.2.5Diagnostic Misconceptions - JIT vs JIC
5.3

Factors of Production

5.3.1Factors of Production
5.4

Quality

5.4.1Importance of Quality5.4.2Identifying Quality5.4.3Total Quality Management5.4.4End of Topic Test - Operational Decisions

Practice questions on Business Aims

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  1. 1
    If Shake Shack sells £75m of chicken burgers in the UK and £500m are sold in total. What is Shake Shack's market share of the UK chicken burger market?Multiple choice
  2. 2
    Which of these are business objectives?True / false
  3. 3
    If a beer company sells £10m of beer in the UK and £100m of beer is sold in total, what is the beer company's market share in the UK?Multiple choice
  4. 4
    Lush use only vegan ingredients in their cosmetics. What type of objective is this linked to?Multiple choice
  5. 5
    Select the business objectives:True / false
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Business Objectives