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Aims and Objectives - Coggle Diagram

- - - - Business aims and objectives can be grouped into the following main categories:
        
        Growth
        
        Some businesses will spend money to gain customers, reducing profits in the short run, but hopefully increasing profits in the longer term.
        
        They may even be able to force other competitors out of the market, by using short run, loss making pricing strategies.
        
        Growth is often based on reinvesting profits, reducing short term return to owners but leading to greater market dominance in the longer term that can lead to greater profit margins.
        
        Some businesses may concentrate on establishing their brand name through customer loyalty programmes, advertising and new product development thus becoming the most recognised business in their market.
        
        Increase shareholder value
        
        This objective is concerned with increasing the price of the businesses’ shares on the stock market.
        
        This is measured by the amount of dividend paid to shareholders and any increases in share price.
        
        Many senior managers have bonus schemes related to increasing share prices and dividends so they may also have an interest in increasing shareholder value.
        
        Profit maximisation
        
        The objective of most businesses, especially those operating in the private sector, is to maximise profit.
        
        Profits can be maximised through increasing revenues and/or reducing costs.
        
        Corporate social responsibility/environmental/ethics
        
        There are businesses that will try to minimise the impact of their business activities on the environment and consider the needs of society. (Fair Wage and Sustainable Sources Of Raw materials)
        
        This objective may come at a cost though in terms of lower profits for the business.
        
        Modern businesses must be respectful of the wider community and take their social and environmental responsibilities seriously.
        
        Survival
        
        Around 30% of businesses fail within 2 years of being set up.
        
        For a small business, the initial objective is to survive the difficult time of gaining customers, establishing a good local name and building a reputation.
        
        Even for some big businesses survival can become a priority. (McDonalds delivery due to COVID)
        
        Governments will intervene to help large employers going bust or to keep certain industries afloat
        
        This aim is key in times of economic recession.