Business objectives and strategy

Business Objectives

A business objective is a detailed picture of a step you plan to take in order to achieve a stated aim. These can be long-term or short-term objectives tailored to individual businesses.
The most common objectives within business include profit maximisation, survival, growth, market share and corporate social responsibility.
Objectives provide a clear direction for all of the business’s activities and employees. They should be specific, measurable, achievable, relevant, and time-bound (SMART).

A business strategy is the means by which a business sets out to achieve its desired objectives.
It represents the business’s overall business plan, including the financial and operational goals and detailed plans for achieving them.
Influences on the choice of strategy include: business objectives, the market, business strengths, the competition, resource availability, and the business environment.
Strategies should be reviewed and adjusted regularly based on changes in these influences.

Business objectives provide a purpose or end goal, while strategies provide the roadmap for achieving that goal.
An objective is what a business hopes to achieve, whereas a strategy is how the business is going to achieve it.

There are three main types of business strategy: Cost Leadership, Differentiation, and Market Segmentation.
Cost Leadership: The business tries to become the lowest-cost producer in its industry. It may involve minimising costs in areas such as research and development, service, sales-force, advertising and so on.
Differentiation: This involves making your products or services different from and more attractive than your competitors. Factors contributing to differentiation might include high-quality, unique features, excellent customer service and so on.
Market Segmentation: This involves targeting a particular group of customers, choosing a niche market. This can lead to higher customer loyalty and margins, but it reduces your potential customer base.

Internal analysis: Evaluate the business’s strengths and weaknesses, looking at assets, processes, people, marketing, finance etc.
External analysis: Examine opportunities and threats in the wider environment, using tools such as PESTLE analysis, which covers Political, Economic, Sociocultural, Technological, Legal and Environmental factors.
SWOT analysis: Combine the internal and external analysis to identify and evaluate the business’s strengths, weaknesses, opportunities, and threats.
Decision-making: On the basis of these analyses, make strategic decisions about business direction, and devise detailed plans for implementing the selected strategies.