University:
Acadia University
Course:
BUSI 2013 | Managerial Accounting
Academic year:

2024
Views:

300

Pages:

2
Author:

Nabila n.

Changes in Business Aims & Objectives The business world is unpredictable, dynamic and ever-changing. Therefore, as a business evolves, it must adapt its aims and objectives to remain competitive. Why Do Aims and Objectives Change Over Time? External Factors Internal Factors Changes within the company (e.g. change in management) External factors, such as changes in the economy, legislation, technology and the competitive environment, may force a business to reassess its aims and objectives. As a business evolves, internal factors may mean a business has to set new goals. For example, a small café looking to survive in the first year may choose to focus on sales or profit as it becomes more established. Economy Technology Legislation Competitive environment How Do Aims and Objectives Change Over Time? In response to external and internal changes in the business environment, a business will adapt its aims and objectives by focusing on the following factors:Changing the Size of the Workforce If a business is expanding, it may look to recruit more staff. Alternatively, the workforce may be reduced if demand decreases or technological developments increase workplace efficiency. Example Self-service branches may lead to reduce their workforce. Changing the Size of the Product Range If a product is performing well, a business may develop new varieties to encourage growth. In contrast, product ranges that sell poorly may be discontinued. Example If a cereal manufacturer with a large range has some varieties that do not sell well, it can reduce its range and focus on the bestsellers. Survival or Growth Economic downturns may force businesses to focus on survival, whereas during economic booms, they can refocus on growth. Example A gourmet chocolate company may need to change its aims during times when people are less likely to purchase luxury items. Entering or Exiting Markets Established businesses may look to new markets to achieve growth. Conversely, if a business is struggling, it may look to exit unprofitable markets so it can focus on successful markets. Example A UK shoe manufacturer specialising in unique, quirky trainers may see an opportunity to target new international markets.