Reasons why Business Objectives may Change (Edexcel IGCSE Business)

Market conditions

• Market conditions include the level of competition in a market and its rate of growth
  
  • Increased competition may prompt a change in objective from maximising profit to maintaining market share
  • In fast-growth markets businesses are likely to pursue objectives of maximising sales and profits
  • If market growth is slowing objectives may focus on growing market share rather than increasing sales

• In the face of increased competition Maxi's Fahrschule in Lübeck has reduced prices in order avoid losing its learner driver customers to cheaper rivals

Technology

• New production technology may support a profit maximisation objective as manufacturing costs are likely to fall as output rises
  
  
• Improvements in e-commerce software may help increase sales
  
  
• Investment in robots could allow manufacturing businesses to improve working conditions for their employees

• Following the launch of JustEat and UberEats services in the Amsterdam region the Vegan Junk Food chain has been able to focus on increasing profits to fund the opening of new outlets in Germany and Spain

Legislation

• Legislation refers to laws or regulations that compel individuals or organisations to behave in a desired way
  
  • New laws may increase business costs and force the firm to focus on increasing sales volumes
     
• The introduction of new regulations to protect the environment has increased business emphasis on social objectives such as reducing their carbon footprint

• In 2023 the EU ban on many single-use plastics increased costs for businesses such as France's SEF Packaging which had to research new materials and invest in new production processes whilst accepting it would achieve lower profit margins