Business Mentors Limited

Business Objectives and External Environmental Factors

Created for Pasifika Paradise Products Ltd

Welcome

During this presentation we will discuss:

• Business Objectives

• S.W.O.T Analysis

• External Environmental Factors

Business Objectives• Business objectives are statements of

specific outcomes that are to be achieved. They give a business a clearly defined target

• The most effective business objectives are:Specific

Measurable

Agreed

Realistic

Time Specific

Business Objectives continuedThe three levels of business objectives are:

1. Strategic

2. Intermediate

3. Operational

Business Objectives continued

Strategic Objectives

• Long term objectives usually set by Senior Management

• Help to convert a mission statement from a broad vision into more specific plans and projects

Business Objectives continuedIntermediate Objectives

• Short term objectives (i.e. within the financial year) set by Middle Management

• Strategic objectives are usually taken into account when intermediate objectives are set

Business Objectives continuedOperational Objectives

• Daily, weekly or monthly targets that focus more on ‘how’ than ‘when’

• Derived from intermediate objectives

Business Objectives continued

Examples of objectives include:

• Find a new operating facility to decrease the current rate of rent

• Implement one on one meetings with employees to build rapport

• Increase the number of retail stores to attract new customers

S.W.O.T Analysis• Performing routine maintenance

such as periodic assessments is essential to the success of a business

• One of the ways to do this is to perform a S.W.O.T analysis

• S.W.O.T stands for Strengths, Weaknesses, Opportunities, Threats

S.W.O.T Analysis continued

Strengths

• Most often internal to a business

• Need to be considered from an internal perspective and from the point of view of customers and people in the market

• What does the business do that is better than anyone else? What advantages does it have?

S.W.O.T Analysis continued

Weaknesses

• Most often internal to a business

• Must be considered realistically and honestly in order for a business to deal with them effectively

• What are competitors doing better than you? What weaknesses do your customers perceive that you don’t?

S.W.O.T Analysis continued

Opportunities

• Most often external to a business

• Opportunities can come from things like changes in technology or relevant government policies

• What interesting trends are occurring or predicted to occur? What business strengths could open up opportunities?

S.W.O.T Analysis continued

Threats

• Most often external to a business

• May be short-term circumstances that can be resolved quickly

• Could any weaknesses seriously threaten the business? Is the business in too much debt? Is changing technology threatening it’s position?

External Environmental Factors• External environmental factors happen

outside of the business

• The business usually has little or no control over these factors but it must act or react to them

• They have the potential to affect the main internal functions of a business and possibly it’s objectives and strategies

External Environmental Factors continued

Example 1: External Competition

• Whatever industry a business operates in it must analyse what its competitors are doing

• Are they selling similar products at lower prices? Have they started an ad campaign that could attract some of your customers?

• The business must work to it’s strengths in order to counter-act any threats to it’s customer base

External Environmental Factors continuedExample 2: The Global Economy

• The state of the global economy can be unpredictable or changeable at times

• Is there a current threat of war or changes in politics that could cause a future downturn?

• A business must be aware of potential market fluctuations and plan accordingly to lessen the effect on its finances and operations

External Environmental Factors continuedExample 3: Infrastructure

• Changes in infrastructure can have a positive or negative effect on a business or its competitors

• Could a new motorway potentially draw customers away from your business and towards a competitor? Will new local housing provide new opportunities?

• A business must be aware of these issues if it wishes to minimise or maximise the potential losses or benefits

Summary• Business objectives provide a clearly defined target and are most effective when they are S.M.A.R.T

• S.W.O.T analysis allows a business to capitalise on its strengths and opportunities, and lessen the impact of its weaknesses and potential threats

• External environmental factors can have an unpredictable effect on a business unless it is well prepared to act or react to them accordingly