Describe and explain PEP’s business objectives, using its mission statement and other information
Evaluate and explain how successful PEP appear to be in meeting each of these objectives.
A mission statement is a written statement setting out the general aims of a business. This is also known as a business objective.
PEP is a business, which has been set up to produce good quality products and excellent customer service, as most businesses have aims and objectives. Examples below show some basic aims and objectives a business might have:
- Make a profit
- Provide goods and services for their customers
- Survive and expand the business
- Improve the quality of goods and services
- Compete against other businesses
- To be environmentally friendly
PEP is a family business with a good history that provides good quality products to customers. PEP has issued a mission statement that shows what the business is aiming for. These are listed below,
- Preserve a good family atmosphere in keeping with our great tradition
- Achieve increasing profit to reward our shareholders and reinvest in our business
- Produce the best electrical appliances to the UK and export markets
- Provide excellent service to our customers
PEP’s need to maintain a good family atmosphere to meet their objectives because… if the business starts to disagree with their employees then the employee might decide to leave which could cause a disturbance in the business. If PEP begins to lose their employees, the business could risk failure. To prevent this from happening, the employees should communicate with each other either internally or externally and be friendly. People can communicate with each other in many ways e.g. internal or external meaning in or outside of the business, up, down and across the business hierarchy and formal or informal.
Motivating the workforce can be a massive advantage for PEP because motivating by making them feel valued and part of a team means the employees the workforce can work better which means improved quality of product or service to customers and therefore improve results for PEP.
All businesses need to make a profit or a surplus. Profit is the money left over after all the expenses has been paid. Profit provides money for further growth, investment and rewarding the owner(s) as well as their shareholders.
PEP need to increase their sales and market shares in order to make a profit. Shareholders are people who have a share in the business, they have invested money into the business so if the business does not do well the shareholders lose out. Therefore, it is vital for the business to increase the profit. If PEP keeps their shareholders happy, more shares will be sold, and as a result PEP will encourage more people to invest money into the business. In addition, if PEP’s increase their profit, they can reinvest some of it back into the business. In this way, the owner is happy and so are the shareholders. If the shareholders are happy then more investors will invest in the business, which will lead to growth of the business. The more shareholders PEP has the more income therefore the business being successful the business will be able to grow.
As one of their business objectives is to provide the best electrical appliances if they provide good quality products and services they can to keep the customers happy. Quality products are often a key element to success, as customers tend to buy good quality products. If the goods are not to their customer satisfaction then goods can be returned or exchanged for another. Some businesses also have a policy of a money back guarantee.
Total Quality Management (TQM) is the policy, which aims to ensure a high level of quality in an organisational product and procedures.
Skilled workforces are needed to produce good quality products and services. A quality manufactured product or trained employees (for that necessary work) can only provide a good or service which they have been trained for. Businesses that offer services need to ensure that their employees are fully trained and qualified to give good quality advice to their customers. This can be an objective for PEP too.
Excellent customer service is the bread and butter of the business. This is because customer service is a process that provides employees with the information they need to know their customers' wants and needs, which will build a relationship between the company and its customers.
Good customer service helps to identify and target their customers to provide them with the information that they need about the goods or service.
Benefits of good customer service are:
- To be nice to the customers and to ensure that the information given is accurate and what the customers expect
- It is cheaper to keep existing customers than it is to attract new customers, therefore it is important to keep a good relationship with the customers
- If the customers are happy with the customer service provided by PEP then they will come back to the business. This is a benefit for PEP as more customers will equal more income
- Good customer service is to identifying possible customer needs and to measure their views on a product or a service and thereafter developing appropriate actions to keep their customers happy
I am going to evaluate and explain how successful PEP is in meeting each of these objectives.
I think PEP’s did not keep up with their family tradition because they employed Keith Parker as a Managing Director who had no connection with the family, so they broke their first mission objective. PEP employed Keith Parker because they wanted someone who was an expert to improve their business expertise due to pressure from banks. This was because, before Keith Parker, there was no team spirit therefore the workforces were not motivated which affected the quality of goods. This is why PEP employed Keith Parker, who will motivate the workforce, make PEP work as a team.
PEP is not increasing their profit. This is because they are not providing the right standard or quality products to their customers. PEP is not meeting their deadlines, which is causing the business problems such as lack of movement and communication between departments.
There also many people leaving PEP, which means there is a high level of staff turnover meaning new recruits has to be made which is costing the business money in training them and motivating the staff to do the job.
There has been arguments between the Pearson brothers which means that they are incapable in controlling the business and also in broad meeting it shows that they don’t know what they are doing and unable to run the business.
Producing the best electrical appliances is what all businesses want to do. PEP started of, at first, selling things like kettles, coal buckets etc and grew up to become a limited company (LTD). This is how at first PEP began to trade and now they are a well – known company supplying electrical appliances.
Providing excellent customer service depends on how the business is doing. Business reputation is also important because if the business is doing well and customers are commenting upon the business then more customers will come to that business. PEP did not achieve excellent customer service partly because of a lot of complaints, which means that PEP cannot get a big contract.
PEP is not achieving this aim due to the number of complaints they are receiving therefore this could lead to not getting a bigger contract in the long term.
What are the possible advantage and disadvantage to PEP of becoming a private limited company in 1965?
Discuss whether PEP would benefit from becoming a PLC with a stock exchange share listing