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Unit 1.3 Business Objectives - Coggle Diagram
Unit 1.3 Business Objectives
Profit
How do we measure profit?
We measure profit by subtracting total expenses from total revenue.
How do businesses make profit?
The profit made by a business comes from increasing revenue, reducing expenses, and managing costs well. This happens through various strategies such as increasing sales, choosing pricing wisely, and controlling operational expenses.
What is Profit?
Profit is the money a business earns when its total revenue exceeds its total costs and expenses. Essentially, their financial output exceeds the financial input.
Ethical Objectives
What are some advantages of ethical business objectives?
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Reputation and Trust
Customer Loyalty
Attracting Talent
Reduced Legal Risks
Sustainability
What are some limitations of ethical business objectives?
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Costs
Competitive Disadvantage
Subjectivity
Short-term Sacrifices
PR Risks
What is business ethics?
Business ethics refers to the codes and values that guide a company's behavior and decision-making in a socially and morally acceptable manner.
Growth
Why businesses grow?
Businesses grow for greater sustainability in the market. In order to make a sufficient amount of money or merely receive the business' desired output, they must continue to grow.
How they grow?
Businesses can grow both externally and internally. Internal Growth refers to when a business expands its existing operations, whereas External growth is when a business takes over or merges with another business to increase their relative growth.
Benefits of growth?
Most importantly, Growth means more profit, it even helps reduce a business's average costs in the long run,
it even helps develop increased market share, and helps them produce and sell them to new markets.
How to measure growth?
A business is able to measure their growth through key performance indicators such as revenue, profit, market share, customer acquisition, and expansion into new markets or product lines.
Protection of Shareholder Values
Why do businesses need to protect shareholder values?
Businesses must to protect shareholder values because shareholders are the owners of the company, and the money they put in are all to grow and ensure the success of the business. Protecting shareholder value helps the company raise capital, maintain trust and confidence in the business, and ultimately ensure further success.
How do you protect shareholder value?
Shareholder value can be protected by making strategic investments, ensuring transparency and accountability, managing risk effectively, and consistently delivering strong financial performance for shareholders.