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Business Studies IGCSEPDF 46
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Compare business’s performance with its objectives
Formula:
Market Share % = (Company sales / Total market sales) × 100
6. A social enterprise has social objectives as well as an aim to make profit to
reinvest back into the business. They often have three objectives: Social,
Environmental and Financial.
Itwill work towards profit after being set up and stable.
After achieving a high market share, it aims to “return to shareholders”.
Aprofit-making business hit with a crisis now has the short-term objective of
survival.
Changes in consumer tastes and spending patterns.
1. Business Survival – Adjust to business environment, change price of products if
necessary.
2. Generating Profit (total income of business (revenue) less total costs) – pay a
return to owners or provide finance to invest further in business.
3. Returns to Shareholders – discourage shareholders from selling their shares. This
can be done by increasing profit or increasing the share price.
4. Growth of Business – increase salaries, economies of scale. This is only achieved
if customers are satisfied with the product.
5. Market Share (the total percentage of total market sales held by one brand or
business) – gives good publicity and more influence over suppliers and
customers.
Why Business Objectives Can Change:
A Private Business Has Different Objectives: