Different Businesses Have Different Objectives

Business: Cambridge International GCSE (2027 Exams), topic 1.3.3

There are 3 key factors that influence a firm’s objectives:

New businesses, like a Brexit consultancy set up in 2016, might focus on growth and survival because of the need to establish themselves and their high chance of failure.
This might mean they need to focus more on short-term objectives.
Smaller businesses, like Revolut or Monzo (banking apps) rely much more on word of mouth. Customer satisfaction may be a key objective.
Larger businesses, or companies (like Tesco plc) face more scrutiny from the public.
Shareholders may be most interested in profit.

If a business is operating in a highly competitive market, then their objectives may change from increasing market share or growth to survival.
Survival is important when there is a lot of competition as it represents the likelihood of a business to survive when faced with high competition.
A price war between rivals drove out supermarket Kwik Save from the supermarket industry in the 2007.

Not-for-profit businesses will usually focus more on the social and ethical objectives than for-profit firms.
For example, TOMS shoes donates a pair of shoes to children in Africa for every pair of shoes that you buy.
50% of new businesses fail after 5 years.

Test yourself on Different Businesses Have Different Objectives

Smaller companies like Revolut or Monzo (banking apps) rely heavily on word of mouth. Which is most likely a key objective for them?
Which objectives do not-for-profit businesses usually focus more on compared to for-profit firms?
What factors influence a firm's objectives?