Changes in Business Aims & Objectives Flashcards

All 14 cards in this deck

Give three reasons a business's aims and objectives may change as it evolves.

Any three of: market conditions, technology, performance, legislation, internal reasons.

How can increased competition in a market change a business's aims?

Aims may shift from growth towards survival.

How can technology change a business's aims and objectives?

New technology can prompt aims to create new innovative products or services, e.g. selling online or using new payment systems.

How can poor performance change a business's aims and objectives?

It may lead to new aims focused on improving sales, revenue, profit or productivity.

How can legislation change a business's aims and objectives?

New or changed laws are legally binding, so the business must adjust its aims and objectives to stay compliant.

Give one internal reason why a business might change its aims and objectives.

Any one of: a new owner or senior manager with different priorities; a change in the owner's personal goals; a new business strategy decided by its managers.

What does it mean for a business to 'exit a market'?

The business withdraws from a market, e.g. because demand is shrinking or the product performs poorly.

Give one benefit of a business entering a new market.

It can target new customer groups, such as different age groups or customers in other countries, growing market share.

How might a business making losses change its objective, and what is one effect on its workforce?

It switches from growth to survival, and may have to reduce its workforce to cut costs.

How might switching from growth to survival affect a business's product range?

It may decrease the range, abandoning or reducing development of new products to cut costs and cash outflows.

Give one drawback of switching the main objective from growth to survival.

Any one of: rivals may grow and take market share; growth opportunities are missed; skilled staff may leave as there are fewer exciting new projects.

True or false? Exiting a market is often used as a survival strategy.

True. Businesses exit markets that are shrinking or performing poorly in order to survive or focus resources elsewhere.

True or false? Once a business has set its aims and objectives they should stay the same as it evolves.

False. Aims and objectives change in response to market conditions, technology, performance, legislation and internal reasons.

Give two objectives a business focused on growth might set.

Any two of: increase sales or profit; widen the product range; enter new markets; increase market share; open more outlets; take on more staff; take over other businesses.