BTEC National Business

Unit 2: Business and management

Ram Bhojani                                                                


aims and objectives

All businesses have aims and objectives. Basic aims may be to survive.  Common aims are to survive, to grow, to provide excellent service, to be the best in their field and basic aspects such as making a profit. All businesses have a purpose this may be more than one but this is expressed in a mission statement this may be “to ensure we provide quality as well as value” this tells us what they are aiming to do. The objectives set need to be measured to see how well the company is doing in making the objectives a reality.  Coca cola uses strategic aims and objectives such as SMART to monitor and plan their aims and objectives theyF believe that this is the best way of meeting aims and objectives that they have set for their company

These objectives should be evaluated by using SMART

Specific

Measurable

Achievable

Realistic

Time related

Specific

Specific is an objective that is exact it is not an approximation, for example to make more profit this year would not be specific whereas make a 5% increase in profits is specific.

Measurable

You know when you have met your aims or objectives, to be able to measure it is necessary to be specific for example we can say after 6 months there is a rise of 2.5% so in a year it is possible to have a 5% increase in profits.

Achievable

Achievable just means that it is possible to complete the aims in the time and with the resources available, so for a new member of the team to get an increase in profits within a week is not achievable.

Realistic

Realistic is similar to achievable it purely means that it is possible to meet the aims and it is not just a fantasy so to make a 150% increase in profits in a year when in 6 months there is a loss of 45% is not realistic.

Time related

Time related is to set a time for when the aims have to be completed, so to merely make more profit is not good enough you need a time so to make a profit in a month fits this category.

There are three main business objectives these are survival, growth and profit.  Growth is a very important aspect in a business, if a business wishes to keep up with demands and the growing market they must expand their company it is a necessity to survive. It has been known that businesses grow so much that staff feel that they are just a small cog in a big machine; this may lead to carelessness and lack of responsibilities. Many companies grow very quickly. Some government statistics show the world’s fastest growing companies in a time span of 10 years.

SMART can be used very effective when wanting to get specific levels of output, sales, profit, market share and share price. To achieve a specific number output time related objective is a very important objective. The time needs to be very carefully monitored to ensure that the output expected is achieved; if the company for example has to produce 300 jars in a week then they need to set some short term objectives. If the working week is 6 days then the company needs to calculate that by the end of Tuesday 100 jars need to be produced. If an objective of 50 jars a day is met then almost certainly they will meet the output that they require.

Again sales and profit needs to be monitored via the objective time related, it also needs to be realistic, specific, achievable and measurable. Getting a specific number of sales in a week or month is a very common aim for a company. The company needs to ensure that the aim that they set is achievable; there is no point in setting an aim that is literally impossible to achieve. For example to say that this week we will sell 1000 televisions and on average last year the company only sold 3 televisions a week. It is very clear that this is not possible.

 

Many aims that a company makes are only achievable if the whole business works together. For example for Coca Cola enterprises to increase sales by 10% the marketing department, sales department, customer services and the production department all need to work together.  The company director will not come and tell individual people what their aim is! The director will tell the general manager who will pass it on the functional managers who will then give the details down to supervisors and finally each person will come to know of the companies aim.  The sales department cannot sell more products unless they have more customers this is the job of the marketing department who need to advertise the company and gain more and new customers. There is no point having customers and no stock so the production department needs to produce more and more bottles of drinks according to demands, finally customers need to be dealt with correctly and carefully to ensure the customers continue to deal with Coca Cola enterprises in the future. Only when all the departments work together Coca Cola enterprises can achieve their aim of increasing sales by 10 %.

Increasing performance

Coca Cola enterprises can increase their performance in terms of sales and profits. The most effective way of doing this is by setting aims and objectives that are increased slowly and carefully so within a year the company can do a lot better. Initially the company needs to give each functional area and objective for the month this objective needs to be realistic and achievable so if in a month 200 cases of five alive are sold a month then sell 210 cases of five alive a month. This will not give Coca Cola enterprises a massive amount of profit immediately but over a year it will have an effect on profits.  Once the company has set a target for sales department they need to ensure that the finance departments collect the money of the sales department regularly and quickly this will ensure all processes are done quickly and effectively avoiding interest for late payments.

Every month the objectives need to be increase steady and slow increases will lead to success. The company needs to monitor the targets to ensure all targets placed are met and if they are not met then the targets need to be evaluated and considered. If the targets are unfair they need to be changed if it is lack of work from the department then disciplinary action needs to be taken. All this will increase performance for Coca Cola enterprises these small targets will help to achieve the company’s overall aim for the year.

Maintenance of effective operation

Managers need to ensure that adequate resources are available to carry out specific tasks.  For example cashiers can’t serve customers unless they have a till. It’s no good having a till if the till is not working! Managers need to ensure that the equipment that they have are adequate and fully maintained in order to ensure that the processes happen quickly and effectively. In Coca Cola if there is an order for 21 cases of Coca Cola and the machine that produces Coca Cola is out of order then that is the fault of the manager he should ensure that the machines are in order to enable Coca Cola to complete all orders received correctly and on time.

In many cases machinery needs to be serviced managers should keep records of when they last serviced any one machine and when it needs to be serviced next if machines are serviced at an interval of 6 months then it will ensure that it is always working. Machinery will almost certainly depreciate in value and as they are used they will become less effective. New machines are introduced very often; the new ones are designed to decrease human input so it will be easier and quicker to complete the tasks the machine is designed for.  Managers will need to send reports to higher posts regarding proposals for changes in machines, at times it is clear that a certain machine is not working as it should do managers need to evaluate the issue attempt to fix it and if it still is not effective they need to pass on the details so they can get a replacement as soon as possible.

Operations need to be analyzed ever so carefully so that everything remains smooth causing the least possible disruption. If managers ensure that all machinery is correct then their teams will be able to produce the orders effectively and on time.

Machinery is a vital aspect of production for Coca Cola enterprises however workers are equally important. Mangers initially have to make sure that they have enough workers available to perform the task that need to be done now a day’s machines do most of the work that humans had to do in the past. But machines require some sort of input from humans. Staff needs to be able to tell the machines how many need to be produced, what needs to be produced and any other information such as labels and the bottle type.

Coca cola enterprises have many different ranges of products, product types, sizes and promotions within products.  When an order is received the customer states all these details so that it can be produced to the customers own preferences.  Having staff is not enough staff needs to be trained to be able to understand the different ranges within Coca Cola enterprises. Once they understand this health and safety aspects are also vitally important.  Managers have to ensure that all their staff are trained correctly and comply with all rules and regulations.

Health and safety training generally is renewed every six months, managers have to send every single worker to these training programs also the manager has to have a selection of workers that are trained for first aid, managers need to consider that at times some workers will be absent for variety of reasons so there needs to be enough first aid trained people so that there is at least one available at any one time!

Along with health and safety staff needs to be trained to be able to use machinery within the work place. The machinery can at times be hard to use and challenging for many people.  Training is required so that staff can use the machines carefully to maintain its usability and quickly so time is not wasted in trying to use the machines. It may not be necessary to train every single person on how to use the machines.  But it may only be necessary to train a few people.

Working capital is the money required on a daily basis by a company. Coca Cola enterprises need to manage their working capital carefully this involves managing the relationship between their short-term assets and their short-term liabilities. The reason Coca Cola enterprises need to manage their working capital is to ensure that Coca Cola enterprises is able to continue its operations and it has sufficient cash flow to satisfy both maturing short-term debt and operational expenses.

There are many ways that Coca Cola enterprises can manage their working capital few ways that are often used and are proved to be the easiest are

  • Identify the cash balance, which allows for the business to meet day-to-day expenses and consider if it is enough.
  • Change the way they purchase raw materials, they need to consider purchasing raw materials as they require them to avoid having materials that are obsolete. Just in Time production is good under these circumstances.
  • Coca Cola enterprises need to consider their debts and the way they purchase items on credit, maybe they can avoid paying interest and get a balance that they can use to purchase items.

If Coca Cola enterprises production department find that their working capital is going down then they need to speak to the finance department and see if they can get some more money. Communication is a very important aspect they need to communicate with other areas to enable that they have a good balance.  

Finally the sales department needs to closely monitor their sales.  If for some reason they find that the company is not doing as well as they should be then they need to take action upon this matter.  If managers do not effectively monitor these details then they will find at the end of the year the company has made a huge loss that is not recoverable at that time.  So it is vital that they monitor it carefully.

Once they find an issue they need to see how this is being cause, so what exactly the problem is, it may be that the production team are not using their machinery properly and they need to have more machines on during an order. If this is the case then they need to be contacted immediately and need to be told what they need to change. It is also possible that there are too many wastes; generally Coca Cola enterprises deal with waste in a very orderly fashion. They sell all mistakes such as wrong-labelled bottles and bottles with wrong lids at discounted prices to workers but it is vital that waste is kept at a minimum because it has an impact on the company.

There are many other aspects that could have an adverse effect on Coca Cola enterprise’s profits many common ones such as not enough customers needs to be dealt with directly to the marketing department.  If the sales department finds that Coca Cola enterprises just don’t have enough customers then they need to tell the marketing department this information. Maybe Coca Cola enterprises need to improve their advertisements and promotions so that they can get more and more customers.  

Managers may be trying extremely well to sort out any issues that Coca Cola enterprises may have at times; it may be hard for the manager to find out what the issues of the company may be it may need an external person to come and monitor any issues that they may be having. It will mean that the external monitor so that it will be a fresh eye so that problems can be solved.

Monitoring of performance and future planning

A Gannt chart is a popular type of bar chart that illustrates a project schedule. Gannt charts illustrate the start and the finish dates of a project.  Gannt charts can be used to show current schedule status using percentage-complete shadings and a vertical line showing today’s status.  It allows the user to see how well they are doing and it shows what progress needs to be made.

Gannt chart allows quick reference to current status the user can quickly scan over the chart and see where they should be and where they are! It may be that they are ahead of target but for the majority of the business they are behind!  To update a Gannt chart or to change it could be a difficult and challenging job, it is hard to keep editing it and adding to it, professional software is the best to do this and it will allow the business to keep their chart up to date at all times.

Gannt chart software is readily available to purchase from the Internet and many good business stores will supply similar software, it really is worth it for a business as they are

Putting things right as things are going wrong rather than having a big shock at the end of the fiscal year.


Critical Path analysis is a mathematical based algorithm for scheduling a set project of activities.  It is a very important tool for effective project management.

It has been used since 1950 for business projects; it is still used today with all forms of projects including construction, software development, research projects, product development, engineering and plant maintenance. CPA requires a few factors before it can be constructed such as;

  • A list of all activities required to complete the project,
  • The time, (duration) which each activity will take to complete.
  • The dependencies between the activities.

Using these values, CPA calculates the starting and ending times for each activity, it determines which activities are critical to the completion of a project (called the critical path), and shows those activities with "float time" (are less critical). In project management, a critical path is the chain of project network activities with the longest overall duration, determining the shortest time possible to complete the project. Any delay of an activity on the critical path ruins the whole plan and makes the planned project completion date later.

These results allow managers to prioritize activities for the effective management of project completion. Originally, the critical path analysis considered only some dependencies between other elements. Since then, it has been expanded to be able to include resources related to each activity. This capability allows for the manager to see a related concept called the critical chain, which determines the project duration from both time and resource dependencies.

There are drawbacks of this technique, as estimations are used to calculate times: if one mistake is made, the whole analysis could be ruined, causing major problems in the organisation of a project.

Coca cola enterprises example

Coca cola enterprises really need to be responsive to external factors; a business has many factors that are external that can affect the way it operates. There are so many things that could happen in which case coca cola enterprise would need to react such as;

Prices of products – if the competitors have cheaper priced products in their stores then Coca Cola enterprises has to react to this by reducing the prices of their products. If they cannot or it means that profits would be too low, then they could offer more for the price so that the customers have a choice of either having to pay a bit more but getting a bit some extras or paying less and getting less. Also Coca Cola enterprises is in a situation where its competitors are offering more for the same price that they are offering then they will have to lower their price to keep the customers coming in or to offer the same as their competitors are offering. If they do not act in response to what their business competitors are doing then they will lose their customers and the business will not be successful, they have to stay ‘competitive’ to stay in the game.

Media image – The media has a big affect on a business. The media includes newspapers, TV, magazines and the press. They can tell the customers about a store and it doesn’t have to necessarily be good news. If the media told the open public bad things about the way the business is run or an event in the business that happened that was bad then the customers can be put off and will not do business again. However the press could have an opposite effect to this by praising the business for something that they have accomplished or maybe by giving a big donation to a charity. This would put a positive effect on the business and will increase the amount of customers that use the business. If another business wanted to be competitive with Coca Cola enterprises then business competitors could do something Decent to get a good image by the media so that the customers will go to a company that has done a good deed rather than going to a company that hasn’t. The good deed that the business does to get a media image could be something as simple as making a donation to a charity but would still be affective to bring the customers to the business.

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Coca cola enterprises needs to be react quickly to these sorts of external factors that could even ruin the whole company. It is not just external factors that can affect the way Coca cola enterprises runs their business there are many internal factors that could also have an adverse effect on the company. There could be some certain things inside the business that is bringing down profits, these issues cannot always be seen by the management and they need to be looked at and resolved by lower management.  Aspect such as poor quality of customer service – customers prefer ...

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