Aims, Objectives, Strategies & Tactics (DP IB Business Management)

Revision Note

Flashcards

Written by: Lisa Eades

Reviewed by: Steve Vorster

An Introduction to Business Aims & Objectives

Aims and objectives serve as a guide for the businesses' overall strategy and direction, helping to focus efforts and resources toward a common purpose
- Business aims are the long-term aspirations of an organisation
- Business objectives are specific, measurable, achievable, relevant, and time-bound targets (SMART targets) that must be achieved to realise those aspirations
Aims and objectives align the efforts of all employees towards a common vision and ensure that everyone is working towards the same goals
They are critical for businesses to function effectively and achieve long-term success
- E.g. A business aim may be to become the market leader in a particular industry
- The corresponding objectives may include increasing sales by 25% over the next three years, improving customer satisfaction by 15%, and expanding into new geographic markets
There is a hierarchy of objectives which cascade downwards

Diagram: the hierarchy of objectives

A business starts with high level aims, then develops strategic objectives, tactical objectives, and operational objectives — **The Hierarchy of Objectives**

A businesses strategic objectives are determined by its overall aim
Strategic objectives then determine tactical and operational objectives which detail the achievable goals a business and its functions want to achieve over a specified period of time

The Hierarchy of Objectives for an Independent Coffee Shop Chain

Component	Explanation	Example
Aim	What the business is looking to achieve in the long term? Usually determined by senior executives Often the same as the overall mission or vision and describes the businesses reason for being	To be the most successful independent coffee shop chain in the country
Strategic Objective	The specific performance goals set by senior management for the business to achieve over time Derived from the firm’s overall aim and mission statement Strategic objectives may focus on achieving specified levels of market share, profit, sales growth or new product/market development	To have the highest market share of independent coffee shops in the country
Tactical Objective	Objectives set by middle managers intended to direct the targets set by the functional areas they oversee	To hire, train and retain sufficient members to ensure prompt, knowledgeable and engaging customer service in all coffee shops
Operational Objective	The day-to-day goals or targets of functions or departments within the business, derived from strategic and tactical objectives Tactical objectives must be carefully aligned across functions so that all parts of the business are working towards the shared goal	To reduce average queue times to less than 2 minutes per customer in all coffee shops

Vision Statement & Mission Statement

A mission statement outlines the fundamental purpose and reason for an organisation's existence
- It describes what the company does, who it serves, and how it provides value to its customers or stakeholders
A vision statement articulates the long-term aspirations and future goals of the business

A Comparison of Mission Statements and Vision Statements

Mission Statements	Vision Statements
Explain the present overall purpose of the business For example, it may refer to the way the business conducts its operations or how it currently meets the needs of customers and other stakeholders Mission statements may need to change over time as market conditions develop E.g. IKEA's current mission statement is 'To offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.'	Sets out what the business wants to achieve in the future These statements are likely to be expressed in aspirational terms and often include the emotional feeling that people should feel about their company They are intended to inspire and motivate and allow stakeholders to understand where the business is heading Vision statements rarely change E.g. Audi's long-term vision statement is 'To be the brand with the greatest appeal, fascinating customer-relevant innovations and breathtaking design.'

Mission Statements

Vision Statements

Explain the present overall purpose of the business
- For example, it may refer to the way the business conducts its operations or how it currently meets the needs of customers and other stakeholders
Mission statements may need to change over time as market conditions develop
- E.g. IKEA's current mission statement is 'To offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.'

Sets out what the business wants to achieve in the future
- These statements are likely to be expressed in aspirational terms and often include the emotional feeling that people should feel about their company
They are intended to inspire and motivate and allow stakeholders to understand where the business is heading
Vision statements rarely change
- E.g. Audi's long-term vision statement is 'To be the brand with the greatest appeal, fascinating customer-relevant innovations and breathtaking design.'

Examiner Tips and Tricks

Vision statements and mission statements are often dismissed as marketing tactics that say little about the real-world impact of a business.

Increasingly, though, brands are reporting on the progress they are making towards fulfilling their mission and acknowledging where changes in the external environment require adjustments to be made. A good example of this is provided by Honest Tea whose 2020 Mission Report explains the challenges the business faced during the pandemic and the necessary changes to its overall mission over the following years.

Last updated: 16 June 2024

You've read 0 of your 5 free revision notes this week

Sign up now. It’s free!

Join the 100,000+ Students that ❤️ Save My Exams

the (exam) results speak for themselves: