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Business · Growing the business
Changes in business aims and objectives
A business's aims do not stay the same. As it grows, and as the world around it changes, its objectives shift - from survival to growth, from one market to many, and sometimes back again.
Last Lesson
Answer from memory before the answers appear.
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What is organic growth?
Growth from within, through new products or new markets.
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What is the difference between a merger and a takeover?
A merger is agreed joining; a takeover is one business buying control of another.
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Give one advantage of becoming a PLC.
Can raise large sums by selling shares to the public.
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Name one internal source of finance for growth.
Retained profit or selling assets.
Learning Objectives
- 1Explain why business aims and objectives change as businesses evolve.
- 2Explain how aims and objectives change: survival or growth, entering or exiting markets, growing or reducing the workforce, increasing or decreasing the product range.
- 3Explain how objectives such as profit maximisation, market share and sustainability become more important as a business grows.
Aims Change as a Business Grows
A start-up's aims are rarely the same as an established business's.
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Start-up
Survival: winning enough customers to cover costs.
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Established
Profit and growth: increasing sales, opening new sites and launching new products.
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Large business
Market share, profit maximisation and returns for shareholders.
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Increasingly
Sustainability and social responsibility, as customers and shareholders expect larger businesses to behave well.
Why Aims and Objectives Change
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Market conditions
New competitors, changing customer tastes or a recession may force a change of direction.
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Technology
New technology creates new opportunities or makes existing products obsolete.
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Performance
A business doing well may aim to grow; one doing badly may return to survival.
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Legislation
New laws, such as environmental rules, can force a business to change what it does.
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Internal reasons
A new owner or manager, a takeover, or a change in what the owners want.
Deciding a New Direction
In a large business, the directors review the business's objectives regularly. A strong year might lead them to aim for new markets; a weak one might mean closing stores and focusing on profit.
As a business grows, its directors regularly review and change its objectives.
How Objectives Change
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Survival or growth
What it means: Switching focus between staying in business and expanding. Example: A chain closes loss-making shops to survive a recession
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Entering or exiting markets
What it means: Starting or stopping selling in a location or segment. Example: A retailer opens stores abroad, or pulls out of a country
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Growing or reducing the workforce
What it means: Hiring more staff, or making staff redundant. Example: A growing tech firm doubles its staff; a struggling one cuts jobs
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Increasing or decreasing the product range
What it means: Launching new products, or cutting ones that do not sell. Example: A café adds lunches; a phone maker drops unpopular models
Objectives of a Growing Business
As it grows, a business's objectives often shift towards these.
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Profit maximisation
Making as much profit as possible, often to reward shareholders in a PLC.
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Market share
Becoming the biggest business in the market, to gain power over prices and suppliers.
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Growth
Expanding into new locations, products and countries.
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Sustainability
Reducing environmental impact and behaving responsibly, which customers and investors increasingly expect.
Case study
Tesco: Entering and Exiting a Market
In 2007 Tesco, the UK's largest supermarket, entered the United States with a chain of small grocery stores called Fresh & Easy. Its objective was growth in a huge new market. But American shoppers did not take to the stores, and the business lost money year after year. In 2013 Tesco changed its objective and pulled out of the US, selling Fresh & Easy and writing off more than £1 billion. Poor performance in a new market had forced Tesco to change its aims and refocus on its home market.
Changing Course
For each situation, explain how the business's objectives are likely to change and why: a café chain whose sales fall sharply in a recession; a toy company whose most popular toy is suddenly banned by a new safety law; a clothing retailer that has just been taken over by a larger rival; a small tech company whose app becomes a worldwide hit.
1. Name the reason for change.
2. Describe the new objective.
3. Say what the business will actually do.
A good answer shows: A new objective for each business, linked to the reason for change - market conditions, legislation, internal reasons or performance.
Can I...?
- 1Explain why a start-up's aims differ from a large business's.
- 2Explain five reasons why aims change.
- 3Explain four ways aims and objectives change.
- 4Explain profit maximisation, market share and sustainability as objectives.
Summary & Exam Focus
- Aims change as a business grows and as its environment changes.
- Reasons: market conditions, technology, performance, legislation and internal reasons.
- Changes: survival or growth, entering or exiting markets, growing or reducing the workforce, increasing or decreasing the product range.
- Larger businesses often focus on profit maximisation, market share and sustainability.
Exam focus
Explain one reason why a business might change its objectives. (3 marks) (3 marks)
Name the reason, then explain how it forces a change in what the business is trying to achieve - and what it will now do differently.
Key terms
The vocabulary this lesson expects you to use. Each one is linked from the first place it appears above.
- Aim
- A general, long-term goal a business wants to achieve.
- Objective
- A specific, measurable target that helps a business achieve its aim.
- Profit maximisation
- Aiming to make as much profit as possible.
- Sustainability
- Operating in a way that does not harm the environment or use up resources for future generations.
- Redundancy
- When an employee loses their job because it is no longer needed.
Downloads
Free to keep, print and annotate.
- Changes in business aims and objectives.pptx Built from the lesson script on 27 September 2026. View
- Changes in business aims and objectives - Completed Notes.docx The full notes for the lesson, to revise from. Built from the lesson script on 27 September 2026. View
- Changes in business aims and objectives - Exam Questions.docx Built from the lesson script on 27 September 2026. View
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