ILO:
a) Different business objectives and reasons for them:
o profit maximisation
o revenue maximisation
o sales maximisation
o satisficing
b) Diagrams and formulae to illustrate the different business objectives:
o profit maximisation
o revenue maximisation
o sales maximisation
a) Different business objectives and reasons for them:
o profit maximisation
o revenue maximisation
o sales maximisation
o satisficing
b) Diagrams and formulae to illustrate the different business objectives:
o profit maximisation
o revenue maximisation
o sales maximisation
Business Objectives
For the following objectives, identify what they mean and why a business would set it.
What problems might you have with setting some of the objectives?
What problems might you have with setting some of the objectives?
o profit maximisation
o revenue maximisation
o sales maximisation
o satisficing
o revenue maximisation
o sales maximisation
o satisficing
Analysis of each objective
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Assess the benefits of Apple's profit max objective.
Why is Apple so expensive? | CNBC Explains
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What type of industries will focus on sales max and why?
Shoppers go crazy on Black Friday
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Assess the beenfits of Amazon's revenue max objective.
Amazon's Success Over The Years: The Kingpin Of Online Shopping | CNBC
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Explain why satisfying can become an objective?
Elon Musk Is now the World's Richest Person, passing Jeff Bezos.
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Exam questions
Assess how realistic it is for Tesco's to focus on profit maximisation as an objective? (12 marks)
Tesco
share price
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Can Jack’s win back the customers Tesco lost to Aldi and Lidl? | ITV News
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Tesco, Carrefour join forces to cut prices
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Tesco warns 9,000 jobs at risk as supermarket bids to restructure | ITV News
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Example extended exam question:
‘Revenue maximisation is a more realistic business objective than profit maximisation for many businesses.’ To what extent do you agree with this statement? Refer to an industry of your choice in your answer. (25 marks)
‘Revenue maximisation is a more realistic business objective than profit maximisation for many businesses.’ To what extent do you agree with this statement? Refer to an industry of your choice in your answer. (25 marks)
Additional reading:
HOW STARBUCKS USES PRICING STRATEGY FOR PROFIT MAXIMIZATION
HOW STARBUCKS USES PRICING STRATEGY FOR PROFIT MAXIMIZATION
Revision videos
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Y2 9) Objectives of Firms - Profit Max, Rev Max, Sales Max, Satisficing
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Business Objectives
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Business Objectives: Sales Maximisation
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