Business Studies- Unit 1- Business Aims

by danhardman24 (student)

Daniel Hardman.

A01- Business Aims

What is a Business Aim?

A Business Aim is a target or goal a business sets itself to achieve after a set period of time. Business aims are generally to create profit, to increase market share, survival, growth and to improve quality of a service.

Businesses use SMART Objectives- this is an acronym used to set small stepping stones used to achieve the overall business aim, as business aims and objectives motivate employees and enable the business to measure their progress towards its stated aims.

Specific: clearly state the precises of what is to be achieved, this makes the aim much more clear on what is set to achieve e.g. increase market share
Measurable: the desired outcome should be a number value that can be assessable; this makes employees more motivated as they know a specific number to work towards. E.g. increase profits by 10%.
Agreed: all staff are involved in discussing and approving an aim. This means that there is little room for fault as the decision has been intensively conferred. E.g. if a proposition is not approved by all parties, an alternative should be considered.
Realistic: the target is possible given the market conditions and the staff and financial resources available. E.g. If the business aims to gain profit during a recession by increasing its prices, this is unrealistic and therefore no in keeping with the SMART acronym.
Time-bound: the target will be met within a given period of time; a commitment to a deadline helps a team focus their efforts on completion of the goal on or before the due date. E.g. the market share must be increased in to X in 12 months.

A business objective means the undertaken activities carried out and the changes made to the business e.g. raise prices to increase profit.

Profit- The main objective of most businesses. Profit is the leftover money when the costs are taken from the total sales. It is for this reason why sales and prices must be set as high as possible.

The above formula means that the amount of capital raised with the costs injected into the business taken away from it. This is the reason why businesses try to cut down their ...

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A business objective means the undertaken activities carried out and the changes made to the business e.g. raise prices to increase profit.

Profit- The main objective of most businesses. Profit is the leftover money when the costs are taken from the total sales. It is for this reason why sales and prices must be set as high as possible.

The above formula means that the amount of capital raised with the costs injected into the business taken away from it. This is the reason why businesses try to cut down their costs to as low as possible and their sales as high as feasible as this leaves the most amount of profit left over.

Increase Market Share-

Another aim for businesses is to increase their market share- this means to increase the percentage of sales in their particular market in comparison to other businesses. The advantages of having a high market share are: it takes sales from competitors, increases profit and public awareness of their business.

Providing a Service

Private Sector Service Providers

Providing a better service than a business’s competitors means that customers will return to your business as they are satisfied with the service, drawing in customers and increasing market share- this would result in raising capital. This may involve making a service more comfortable, convenient or enjoyable. An example of an improving a service is Virgin Trains’ business aim to improve quality of service. They have achieved this by reducing their carbon footprint, sustaining the development of rail and also by minimizing the difference between the train times.

“We’re doing everything we can to minimize the negative, and accentuate the positive. We want to challenge assumptions, solve problems and deliver innovative solutions. It’s just our way.”

A quote from Virgin Trains’ online corporate section.

The businesses listed below are private sector service providers, meaning that they are a profit-making organisation.

Public Sector Service Providers

Another example of providing a service is South Axholme School, which could improve their quality of service by increasing their GCSE results pass rate. Improving the quality of the teacher training and putting on more revision sessions after school and during break times could achieve a higher standard also.

The NHS could improve their quality of service by shortening waiting times, employing more doctors and nurses which would result in more deliberated decisions. Also, decreasing death rate during NHS surgical operations would provide a much better service.

Improving the Quality of a Product

The above businesses have all improved their quality of product. This can be done by lowering defects, improving customer satisfaction, improve the area in which the products are being manufactured and to reduce the amount of small variables within the products.

For example, Nike have improved the area in which their products are produced in after complaints of poor quality due to manufacture in sweatshops- this change has resulted in much more sales due to better customer satisfaction. The first ever Apple Iphone also suffered few yet perceptible defects including the screen freezing and some applications merely not working. Apple rectified these problems in the Iphone 3g and has continued to reduce defects and add on more features in the 3gs thereafter, which has resulted in very high customer satisfaction.

‘We improve our business operations continuously, always driving for innovation and evolution.’ Is a quote from Toyota’s ‘continual improvement challenge’ which is seen as meaning that Toyota prides itself on its principles- this is very attractive for customers as they believe that they are investing in a long-lasting, good quality, well-made vehicle. Toyota have made improvements to their cars by: adding DAB radio systems, turning a lot of its vehicles to hybrid and offering a 5 year warranty on all of its new vehicles.

Additional Aims

In the top 10 of many business’s aims, there is usually an aim to lower its carbon footprint or be good to the environment in some way. Not only will this result in customer satisfaction from passionate eco-friendly consumers, it will reduce costs on gas, electricity etc.

Another additional aim of many businesses is to raise money for charity. The result of this will attract new giving customers and look very good on the whole business.

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