1.5.1 Business Objectives

Businesses are established with specific goals in mind. These goals, known as objectives, guide their decisions and actions. Understanding these objectives is crucial for analyzing how a business operates and its overall success.

Types of Business Objectives

Businesses can have various objectives, often prioritizing several simultaneously. Some common objectives include:

• Survival: The primary objective for new businesses, ensuring the business remains in operation.
• Growth: Expanding the business in terms of sales, market share, or geographical reach.
• Profit: Generating a financial return for the owners or shareholders.
• Market Share: Achieving a significant portion of the total market sales.
• Social Objectives: Contributing to the well-being of society, such as ethical sourcing or environmental sustainability.
• Employee Welfare: Providing a positive and supportive work environment for employees.

Detailed Explanation of Key Objectives

Let's delve deeper into some of the key business objectives:

Survival

Objective	Description	Importance
Survival	Ensuring the business continues to operate and remain profitable. This is especially critical for new ventures.	Fundamental; without survival, other objectives are irrelevant.

Growth

Objective	Description	Importance
Growth	Increasing sales revenue, expanding into new markets, or developing new products.	Essential for long-term success and increasing profitability.

Profit

Objective	Description	Importance
Profit	Generating a financial return for the owners or shareholders. This can be expressed as a percentage of sales or as an absolute amount.	A key indicator of business success and sustainability.

Market Share

Objective	Description	Importance
Market Share	The percentage of total sales in a particular market that a business controls.	Indicates the business's competitive strength and influence.

Interdependence of Objectives

Businesses often strive to achieve multiple objectives simultaneously. However, these objectives can sometimes be in conflict. For example, pursuing rapid growth might require sacrificing short-term profitability. Effective management involves balancing these competing objectives.

Measuring Objectives

Businesses use various methods to measure their progress towards achieving their objectives. These may include financial statements (profit and loss accounts, balance sheets), sales figures, market research data, and customer feedback.