Total Revenue is the total amount of money added up which goes into the business from selling the product or service. It can be shown as:
Number of items sold x Selling price = total profits (revenue)
Private sector businesses have the main aim of making a profit. If the total profit coming in the business from selling a product or service is bigger than the total summed up costs involved in making or supplying it, the business has made a profit.
Entrepreneurs (owners of a business), risk their investment in a business and profits are their rewards for taking the risk for their business. In order for a business to become successful and become bigger, the business will need to earn profit. The profit can be used in different ways e.g. reinvest in the business to buy new equipment, take on extra employees, and expand the location etc. The business must make a profit to grow and survive.
Increasing Market Share
Market share is the percentage of the total market sales that are made by one company or product/brand. The market sales figure is the total value of all sales made by all firms in the market
However, not every one will be able to increase market share. For example, Cadburys is the market leader in the UK chocolate market. Dairy Milk is one of the brands which have an increased amount of competitors as this brand is doing so well that people are trying their best to become better than Dairy Milks Brand. Increased market share shows that a brand is succeeding against the competition.
Most of UK Businesses don’t produce a product but instead they provide a service to their customers. Businesses such as banks, transport firms, marketing agencies and retailers are all examples of service industries. Some essential services are provided by central or local government and are free for their users, for instance, NHS hospitals and local schools. Most business services, charge their customers for providing the service and aim to create a profit. A business such as Post Office has mixed purposes. It is owned by the state but it is run as a business and charges for its services. It is expected to complete assured shared obligations e.g. providing daily postal deliveries in areas which may not be cost-effective.
Improving the Quality of the Product or Service.
In the majority of markets, customers have an option concerning the product or service that they use. If the quality of a product or service is not as high-quality as that of its competitors it is expected to lose market share. Customers expect high standards from merchandise and services so businesses must work to carry on improving their products if they are to stay competitive. This may signify improving the design of products, making them more trustworthy or giving faster service. For example KFC will need to provide good quality food at reasonable prices in a pleasant environment. Businesses which cannot produce good-quality products or services may not survive.
It is Important to have business aims so that the business can have responsibilities and success towards a business/trade/brand. An aim highlights key areas of development and achievement. So therefore it is important for a business to have aims and objectives, because without aims and objectives then the business will not really be focused. Also it will have no targets, so it cannot compare how it is currently doing with the targets. Some businesses change their aims and objectives over time to help them to survive or expand with the market area that they are in.
British Airways changed its aim from making a profit, because of the tragedy on September the 11th 2001, to having an increase in security because they needed to make sure that they could keep their customers. So this business does their total best to keep on track of their aims and objectives which they need to achieve in order to make their business successful.
Morrison's aim is to offer outstanding value for money, an unbeatable customer service and a pleasant shopping experience. The mission statement for Morrison’s is "The Very Best for Less" which basically means that all of their aims are shown as selling good quality products, for a low price. This shows us that the customers would be attracted to low priced products, just as long as they’re good quality. Other supermarkets will then want to become more competitive as Morrison’s are attracting more customers to their store.
Here's what a star student thought of this essay
Quality of writing
This essay is written to a high standard when compared to other GCSE essays. There are no obvious spelling, punctuation or grammatical errors. The author occassionally uses capital letters in the middle of sentences when they are not needed and this error could be viewed in a negative manner by the examiner. Some marks won for good structure could be lost for these small errors.
Level of analysis
This essay shows a lot of detailed knowledge in the main areas of aims & objectives of businesses and is able to use basic theory to provide reasoning to how the aims & objectives should be carried out. However there is a lack of analytical terminology used. This is very apparent and is such a shame, as if the author had included some kind of conclusion or even tried to analysis the different areas then much higher marks could have been awarded. Detailed use of examples does pick up some of the marks that are lost, these are gained by showing knowledge in a certian area in the subject. A must in Business essays is to give detailed examples as lots of marks are available for knowing about them. The actual theory behind a business move is desirable but not as essential to gain top marks.
Response to question
This essay gives a good explanation to how the aims & objectives of a business are crucial to the success of a business and how they should be worked on to give that success.