Business Objectives » Introduction to Business Objectives

What you'll learn this session

Study time: 30 minutes

What business objectives are and why they matter
The difference between aims and objectives
Types of business objectives including profit, growth and survival
How objectives change as businesses develop
Real examples from successful UK businesses
How to write SMART objectives

Introduction to Business Objectives

Every business needs a clear direction - just like you need to know where you're going before you start a journey! Business objectives are the specific goals that a company sets to guide its decisions and measure its success. Think of them as a business's "to-do list" but much more important.

Without clear objectives, businesses would be like ships without compasses, drifting aimlessly and wasting time and money. Successful businesses like Tesco, Apple and even your local corner shop all have clear objectives that help them make smart decisions every day.

Key Definitions:

Business Objective: A specific, measurable goal that a business wants to achieve within a set time period.
Business Aim: A general statement of what the business wants to achieve (broader than objectives).
Target: The specific number or result the business wants to reach.
Stakeholder: Anyone who has an interest in the business's success (owners, employees, customers, suppliers).

🎯 Aims vs Objectives

Aim: "We want to be the best pizza restaurant in town" - this is general and vague.

Objective: "Increase pizza sales by 25% within 12 months" - this is specific, measurable and has a deadline.

Types of Business Objectives

Different businesses have different priorities depending on their size, age and situation. A brand-new startup will have very different objectives from a well-established company like Marks & Spencer.

Primary Business Objectives

These are the main goals that most businesses focus on, especially when they're trying to succeed in competitive markets.

💰 Profit Maximisation

Making as much profit as possible by increasing sales or reducing costs. Most private businesses aim for this once they're established.

📈 Growth

Expanding the business by opening new shops, launching new products, or entering new markets. Amazon started selling books but now sells everything!

⚡ Survival

Simply staying in business during tough times. Many businesses focused on survival during COVID-19 lockdowns.

Case Study Focus: Greggs' Growth Objectives

Greggs, the UK bakery chain, set clear growth objectives in recent years. They aimed to open 100 new shops annually and expand their vegan range. By 2023, they had over 2,300 shops across the UK and their vegan sausage roll became a massive hit, showing how clear objectives led to real success.

Secondary Business Objectives

These objectives support the main goals and often reflect what different stakeholders want from the business.

Stakeholder-Focused Objectives

Modern businesses increasingly set objectives that benefit various groups, not just owners. This approach often leads to better long-term success.

🌎 Environmental Goals

Reducing carbon footprint, using sustainable materials, or achieving zero waste. IKEA aims to be climate positive by 2030.

👥 Employee Satisfaction

Creating better working conditions, offering training, or improving work-life balance. Happy employees often mean better customer service.

🤝 Social Responsibility

Supporting local communities, donating to charity, or creating jobs. Many businesses now see this as essential for their reputation.

How Objectives Change Over Time

Business objectives aren't set in stone - they evolve as companies grow and face new challenges. Understanding this progression helps explain why businesses make different decisions at different stages.

🚀 Startup Stage

Main Focus: Survival and breaking even

Typical Objectives:

Cover all costs within 18 months
Build a customer base of 500 regular customers
Establish brand recognition in local area

🌱 Growth Stage

Main Focus: Expansion and market share

Typical Objectives:

Increase sales by 40% year-on-year
Open 3 new locations
Launch 2 new product lines

👑 Maturity Stage

Main Focus: Maintaining position and maximising profit

Typical Objectives:

Maintain 15% profit margin
Defend market share against competitors
Improve efficiency by 10%

Writing SMART Objectives

The best business objectives follow the SMART criteria. This framework ensures objectives are clear, achievable and useful for decision-making.

The SMART Framework

SMART stands for Specific, Measurable, Achievable, Relevant and Time-bound. Let's break this down with examples:

🎯 SMART Example: Local Café

Poor Objective: "Sell more coffee"

SMART Objective: "Increase daily coffee sales from 150 to 200 cups within 6 months by introducing a loyalty card scheme"

Specific: Coffee sales (not just "more sales")
Measurable: From 150 to 200 cups daily
Achievable: 33% increase is realistic
Relevant: Fits with café's main business
Time-bound: Within 6 months

Case Study Focus: John Lewis Partnership

John Lewis, the UK department store, sets unique objectives because it's owned by its employees (called Partners). Their objectives include profit-sharing with Partners, maintaining high customer service standards and sustainable business practices. In 2023, they aimed to achieve carbon net-zero by 2035 while maintaining their reputation for quality - showing how company ownership affects objectives.

Why Business Objectives Matter

Understanding why businesses set objectives helps explain many business decisions you see in the news or in your local area.

Benefits of Clear Objectives

Well-set objectives provide numerous advantages that help businesses succeed in competitive markets.

🎯 Direction & Focus

Everyone knows what they're working towards. Like a football team knowing which goal to aim for!

📊 Measuring Success

You can track progress and celebrate achievements. Did we hit our target or not?

🤝 Better Decisions

When facing choices, objectives help decide which option supports the business goals best.

Conflicts Between Objectives

Sometimes different objectives clash with each other, creating difficult decisions for business managers. Understanding these conflicts helps explain why businesses sometimes make choices that seem contradictory.

⚖️ Common Conflicts

Profit vs Growth: Expanding quickly often reduces short-term profits

Quality vs Cost: Better materials cost more but improve reputation

Environment vs Profit: Eco-friendly practices often cost more initially

Real-World Example: Patagonia's Bold Objectives

Patagonia, the outdoor clothing company, famously ran an advert saying "Don't buy this jacket" to promote environmental responsibility. Their objective of environmental protection sometimes conflicts with profit maximisation, but this approach has built incredible customer loyalty and long-term success.

🧠 Test Your Knowledge!