The aim and business objectives provide the basic foundation for the business development and its clear focus.
The business aim of a company is to grow and become a market leader in the future.
Without aim and objectives, the managers will not be able to make important decisions about business strategies – the long-term plans of action of the business to achieve its objectives and finally its aim. Or, the decisions will become very subjective. Also, without specific business objectives, decision-making will lack direction and a means of assessing success as every stage of decision-making is proven to be much more meaningful with having specific business objectives to refer to.
A corporate objective may include the business trying to increase its sales revenue by 25% every year in the next 5 years.
Clear corporate objectives will then be translated into objectives for each business function. For example, a marketing manager will need to decide between selling products in new markets or selling more products in existing markets; an HR manager will decide whether to recruit new sales workers internally or externally.
To grow sales revenue by 25%, a marketing objective may include growing the number of customers by 10%, increasing the market share to 30% and growing the average customer spending by 10%.
Once business objectives are in place, business planning and devising business strategies will start. The directors of each business function will plan and decide on suitable strategies to use in order to achieve each of the functional objectives. They will analyze business’s current position and things that may affect its plans such as position in relation to competitors, new legislation, amount of competition, influence of other businesses such as suppliers, whether product sales are likely to rise or fall in future, costs of the business, etc.
To grow the number of customers by 10%, a marketing strategy may include increasing promotion of existing products to sell to a new market segment, for example target teenagers who previously were not the company’s customers.
The business will also set up many smaller strategies to achieve its corporate and functional objectives.
Other business strategies may include global strategies (for multi-national corporations such as Samsung), generic strategies affecting the whole business, corporate strategies considering long-term position of the business on the market or operational strategies used to improve efficiency and gain competitive advantage over rivals in medium-term.
And finally, in order to put those strategies into operation, many day-to-day activities called business tactics will need to be executed successfully.
To increase promotion of existing products, a marketing tactic of establishing a relationship with Key Opinion Leaders (KOLs) and finding new advertising agency specializing in advertising to young people will need to be accomplished.
