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business objectives - Coggle Diagram
business objectives
the objectives
survival
- important in the first 12 months (new business)
- if a new business enters the market increasing competition
- if trading conditions get more difficult eg 2008 recession
profit maximisation
entrepreneurs will try to keep costs as low as possible and raise prices without damaging customer loyalty
price skimming is a strategy used often i luxury goods markets, prices are unnaturally high as consumers for these goods are wealthy and not prices sensitive so don't object to the price, however, seen as too short - termist and long term opportunities can be overlooked and alienate other stakeholders eg employees with low wages
sales maximiseation
used to gain more market share which is important in trading and can be used to maximise profits
- if sale staff are employed their pay may be linked to physical sales which acts as an incentive to get higher earning
market share
- can increase revenue and raise profits
- can lead to market domination therefore more control over prices and larger output, lowering prices leading to more demand, more revenue and ultimately more profits
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why are they important
motivation :arrow_right: employees have something to work towards eg bonus if sales targets are reached
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