Transcript L2 Business Enterprise/ICT Unit 2 Business Organisations

L2 Business Enterprise/ICT
Unit 2 Business Organisations
Setting Aims and Objectives
Aims and Objectives
 To understand a businesses situation and needs.
 To be able to decide set aims and objectives for a business
based on its situation and needs.
Focus of Aims and Objectives for a
Business
 Survival = Keep on trading
 Break even = costs and income the same
 Diversifying = moving into other markets/ Service Provision
 Consolidation = merging
 Expansion = growing the business
 Market Share
 Sales
 Profit maximisation
Survival
 A business needs to survive.
 51% of new businesses fail in a year. Source
http://www.businessplan.co.uk/why_do_business_fail.html
 Many more fail between years 1-5
 Reasons
 Come up with Aim to help survival
Break even
 When costs and income are the
same
 Realistically can be long
process
 Aim for the business to break
even by 2014
 Need
 Customers
 Marketing strategy
 Price products/services
correctly
 Know market
 Be lucky
 Work ON business
 Come up with an Aim for
breaking even
Diversifying
 Moving into new markets
 Improving current service provision
 Aim ‘To diversify and increase product range from telephones to laptops and
consoles within 3 months’
 Can be a survival tactic
 Can be expansion tactic
 Tesco’s Groceries – Clothes – Bank – insurance Phone – Internet shopping
 Tesco’s now going into Asia in big way
 China, Thailand
 An Aim for diversifying
Consolidation
 Forming relationships with other businesses
 Aim to increase our market share by 30% to 60% by joining
with….. Next year
 Can be partnership or buyout
 T-Mobile and Orange
 Lowers costs (operating costs)
 Share customers
 An Aim for Consolidation
Expansion
 Groupon worlds fastest grown company*
 Launched 2008
 Group Discount
 Floated on stock exchange 2010
 Gone global operates in 44 countries
 In trouble now though…
 An Aim for Expansion
Market Share
 Aim to increase Market Share
 Aim to increase our market share from 20% to 25% in 2013
 Makes you safer if you increase it
 Take customers from competitors
 Create new customers
 An Aim for increasing market share
Sales
 Increasing sales
 Can be specific – “Need to sell 10% more Sony TV’s this month
than last month”
 Can be general – “Need to increase sales by 10% throughout the
store”
 Has many benefits
 Confidence for employees/owners
 Increases revenue/profit
 Scares competition
Profit Maximisation
 Make the most of what you have
 Extracting as much money as you can from
products/services
 Focus on individual deals rather than bulk (sales)
 Focus on Bulk orders (lowering costs)
 Lease underutilized resources
 Make cash flow work
Class Exercise


Survival = Keep on trading

They are for a business that has not
began trading yet.
Break even = costs and income the
same

You need good reasons/justifications
for your choices.
Diversifying = moving into other
markets/ Service Provision

Consolidation = merging

Make them SMART!

Expansion = growing the business

Specific


Measurable
Market Share = getting bigger share of
the market

Sales = increasing numbers

Profit maximisation = Getting the most
out of your resources



In groups of three, come up with 1 Aim
and 2 Objectives for each of the
business goals to the right
Achievable

Realistic

Time bound