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4 MAIN BUSINESS OBJECTIONS, . (Benefits) - Coggle Diagram
4 MAIN BUSINESS OBJECTIONS
GROWTH
How do they grow?
Acquiring a new customer base
Filling a gap in the market
Doing proper research
Setting Tactical and Strategic Objectives
Practicing CSR
Why do businesses grow?
Greater control in the market
Increase profits
High demand for a good or service
How to measure growth
Revenue
Profit
Sales
PROFIT
What is profit?
Revenue minus Cost
The financial gain after business expenses
How to measure profit?
3 Main types
Operating Profit
Operating Profit = Revenue from core operations minus total cost of goods sold and operating, depreciation & amortization expenses
Net Profit
Net Profit = Total Revenue - Total Expenses
Gross Profit
For gross profit, subtract the cost of goods from net sales. For gross profit margin ratio, divide your gross profit by net sales and multiply by 100.
How can a business make profits?
Increase revenue
Cutting production costs
Increase prices
Increase the number of customers that buy the specific good/service
Increase the amount that customers purchase
PROTECTION OF SHAREHOLDER VALUES
Why do businesses need to protect shareholders values?
The shareholders have invested money into the business and expect return
The shareholders want to earn profit
How do you protect the shareholder's values
Understand the risk involved so the business knows how to proceed.
Communicate with the shareholders
Monitor the finances of the business regularly
ETHICAL OBJECTIVES
What is business ethics?
Refers to the moral values and principles that a business should follow when conducting business activity. There are varies examples such as
Honesty
Law Abiding
Respect for others
Loyalty
Accountability
Integrity
Reputations and morale
What are some advantages & limitations of ethical business objectives?
Advantages
Improves reputation
Positive work environment
Analyzes good employees
Builds Loyalty
Avoids legal problems
Limitations
Limits and doesn't maximize profits
Time consuming
.
Benefits
Increase resources
Generate more sales and stock
Reach more costumers
Put more money back in your business