ROGA 11.BUS Business Goals Continued ROGA

1. BUSINESS GOALS
CONTINUED……

2. Last lesson we looked at profits and market
share…….
This lesson we’ll continue looking at business
goals starting with GROWTH

3. Why do
businesses
want to grow?
Growing the business
can lead to increased
sales. Increased sales
can lead to increases in
profit
Increased profit will make
the company more attractive
to shareholders and increase
dividend payments for
existing shareholders
Increases in sales can
enable businesses to
achieve economies of
scale and lower costs
Increased profit can allow
business the opportunities to
increase salaries and
bonuses for employees
increasing motivation and
retention
Growth can increase
market share which helps
minimise competition
and maximise profit from
the market
Business owners may
gain personal and
professional satisfaction
from seeing their
business grow and
succeed
Increased profit allows business
to invest in new markets,
innovation, diversification, or
social and environmental
initiatives
Growing the business
allows the business to
respond to business
demand

4. • Most businesses want to grow or expand – this can be achieved internally
(organically) or externally.
• Internal growth could involve:
• Employing more people
• Increasing sales
• Introducing innovative products
• Purchasing new equipment
• Establishing more outlets
E.g. McDonald’s has an ambitious growth program by selecting a large number of sales for future
expansion
MAXIMISING GROWTH WRITE THESE NOTES IN YOUR DOCUMENT

5. MAXIMISING GROWTH WRITE THESE NOTES IN YOUR DOCUMENT
• External growth is achieved by merging or acquiring other businesses. Recall
from our last topic:
• A merger is when two businesses join to become one.
• An acquisition is when one business purchases another.
• As consumers, we can appear to have a wide range of choice, however,
through external growth strategies, major brands we know and love come
down to just a few major brands. See next three slides for examples.

6. This image demonstrates how most commonly known products/brands are all
owned by just a few different companies:

7. Growth – Acquisition:
This portion of the image also helps to demonstrate acquisition. P&G have purchased
individual companies (producing different products/brands) to come under the one
main company (P&G ).

8. Growth – Merger:
This portion of the image helps to demonstrate a merger. The company producing
products (Hubba Bubba, Extra etc) has joined to become one company, “Wrigley”.
The“Wrigley” company has then gone on to be acquired by “Mars”.

9. MARKET SHARE & GROWTH
These examples demonstrate how a business can not only be maximising their
growth but also increasing their market share!
Task: Write a S.M.A.R.T goal a business would write about increasing market share

10. Next we’ll look at business goals for Share Price

11. Why do
businesses want
to increase
share price?
A high share price
provides investors with the
perception of strength and
profitability.
Higher share prices will
more likely result in more
favourable publicity,
promoting a positive view
of the company
Constantly improving
the share price will
achieve higher
dividend payments for
shareholders.
Increased share prices
maximise the returns to
shareholders (owners of the
company)
A company with higher
share prices is not as
vulnerable to takeover. In
the event of a takeover,
shareholders may receive
less than the company
was worth
Companies with higher
share prices can
strengthen their position
by using their stock to
make acquisitions

12. IMPROVE SHARE PRICE WRITE THESE NOTES IN YOUR
DOCUMENT
• A share is part ownership of a public company. Shareholders therefore
are the real owners of companies.
• There are 2 reasons a person would buy shares:
1. They purchase them in the hope of selling them for a higher price
2. Owning shares in a company entitles an investor to a part of the company’s
profits which is distributed in the form of dividends (a return)
• Companies need to maximise the returns of their shareholders. This is
achieved by keeping the share price rising – constantly improving the
share price – and paying back healthy dividends

13. FINANCIAL BUSINESS GOALS WORKSHEET
 Complete the “Financial Business Goals Worksheet”
attached to the lesson module on Canvas.
 Read the instructions at the top of the sheet and the
example provided in the first shaded row in the table.
 Discuss positive and negative aspects of the scenario
each business is facing.
 Evaluate which financial goal/s would apply for the
business in the scenario presented.

14. NON-FINANCIAL GOALS
Now that we’ve looked at all the financial business goals,
let’s look at the non-financial goals…..
SOCIAL & ENVIRONMENTAL

15. SOCIAL GOALS WRITE THESE NOTES IN YOUR DOCUMENT
Why should businesses have social goals?
Businesses operate within the community and so should have
responsibilities to the community
Businesses develop social goals and adopt strategies benefiting
communities. These include:
1. Community Service:
• Sponsoring community events and programs
• Financially supporting educational, cultural or welfare activities

16. 2. Provision of Employment:
- Some small businesses are committed to employing family
members that are unemployed. Other businesses are
committed to retaining employee’s even through financially
difficult periods.
3. Social Justice:
- Businesses adopt policies that protect the rights of employees
and the community, providing fair and equal treatment.
SOCIAL GOALS WRITE THESE NOTES IN YOUR DOCUMENT
Task: Write a S.M.A.R.T goal a business might write related to social goals

17. What are the environmental demands of a business:
- Use of the Environments raw materials to produce products
- Pollution from operations
- Use of water and power/energy supplies in regular operations
The demand for increased productivity and business desires for
profits have increased the impact on the environment.
This demand cannot be sustained by the environment.
ENVIRONMENTAL GOALS WRITE THESE NOTES IN YOUR
DOCUMENT

18. Demand for Chocolate:
Watch the following video on the demand and supply of chocolate
https://www.youtube.com/watch?v=nzjat2imf0E
ENVIRONMENTAL GOALS
Task: In your document, write a short paragraph discussing the impact a
supply shortage and increased demand of cacao has on the environment.

19. There are parts of society that demand economic growth should not occur
at the expense of the environment.
There needs to be a balance between economic and environmental concerns
— in other words, sustainable development.
Societal and government pressure has led to businesses considering
sustainable development in their operations.
ENVIRONMENTAL GOALS WRITE THESE NOTES IN YOUR DOCUMENT
Task: In your document, identify what new opportunities this provides for business?

20. THE INFLUENCE OF SOCIETY ON BUSINESS OPERATIONS
Discussion Task: Read the Forbes article in the link below. Keeping the article in mind, use the diagram
above to construct a short paragraph critically analysing the influence society has on business
relations. Share your response on your class Canvas discussion forum.
tps://www.forbes.com/sites/patsydoerr/2019/01/14/four-ways-social-impact-will-affect-businesses-in-2019/#61ee4a5f6e

21. • In the following examples, identify which financial goal the business is trying to achieve:
a) The business owner wishes to increase revenue so they conduct a large sale.
b) A board of directors announces that the company’s profits are forecast at 23 percent over the next twelve months
and the dividend will rise by 28 cents per share.
c) A manager decides to undertake an extensive promotional campaign in an attempt to attract new customers.
d) Senior executives knew there was only one way to expand the business and that was by buying the opposition.
• Describe two strategies a manager can use to maximise profits
• Recommend three strategies either Coles or Woolworths could use to increase their market
share.
• Justify why businesses should adopt sustainable development practices.
BUSINESS GOAL REVIEW Q’S Write these notes in your
document