GCSE Applied Business - Strand A Theory

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Strand A – Theory

Aims and Objectives

All businesses have aims and objectives.

  • An aim is a goal or target of the business.
  • Aims should be appropriate to the business activity and size
  • Businesses can have more than one aim
  • Businesses in the private sector aim to make a profit
  • Sometimes, when businesses are in trouble, they may aim to just survive
  • Businesses may aim to “maximise sales” this means to sell as much as they can.
  • Some more competitive businesses aim to provide a better, more effective service then competitors
  • Many businesses aim to be environmentally and ethically friendly.

  • Objectives are the steps that help to achieve an aim
  • Objectives should be measured regularly to check for achievement
  • Objectives should be SMART this means that they should be:

Specific

Measurable

Agreed within the business

Realistic

Time constrained

                The objectives should clearly state what the business wants to achieve, the business should be able to measure whether or not they are achieving the objectives, all within the business must agree to work to achieve the objectives, the objectives must be able to be met with the resources available, the objectives must be able to be met within a certain time limit. If an objective has all of these features then they are SMART objectives.

SMART objectives help businesses to measure their success. An everyday aim may be to have more money. An objective may be to save £5 every month not just to save more. This means that the person would be able to see whether they were achieving their aim quickly and efficiently.  A business may choose an objective such as to increase share prices by 5% in the next year. The businesses would be able to see throughout the year whether they were on their way to achieving this aim because they would be able to see whether or not they had more money after a year.

                Some businesses aim not to increase but to maintain sales and keep a good relationship with their customers. However many businesses choose to expand and grow. Either by opening more stores of buying another business or joining with another organisation.

Aims provide a focus for the business and highlight key area of development and achievement. An objective ‘breaks down’ aims so that they are easier to achieve. Objectives can be ‘shared’ so that many people are responsible for achievement in their own areas.

For example one of the main aims of Tesco’s is: “to create value for customers to earn their lifetime loyalty.” One of the objectives is: for customers to have “clear aisles, to be able to get what they want at a good price, no queues and great staff”.  However these may differ to WHSmith aims which is “to be Britain's most popular bookseller, stationery and newsagent”. However both of them aim to be popular with the public and their customers.

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Some businesses have a mission statement. A mission statement is defined by about.com as “a brief description of a company’s fundamental purpose”. The website also states that “A mission statement answers the question, “Why do we exist?”” This means that a mission statement tells people what the purpose of the company is and what it aims to do. For example the St Albans Catholic High School Mission Statement says "St. Alban's Catholic High School seeks to be a living Christian Community in which effective learning takes place. By recognising Jesus Christ in each one of us, we aim to develop fully the unique ...

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