Organisational objectives 3 On completing this chapter you should be able to: Know and understand

O = opportunities
These are the potential areas for expansion of the business and 
future pro
fi
ts. These factors are identi
fi
ed by an external audit of the market the 
fi
rm 
operates in and its major competitors. Examples include: new technologies, export 
markets expanding faster than domestic markets, and lower rates of interest increasing 
consumer demand.
• 
T = threats
These are also external factors, gained from an external audit. This 
audit analyses the business and economic environment, market conditions and the 
strength of competitors. Examples of threats are: new competitors entering the market, 
globalisation driving down prices, changes in the law regarding the sale of the 
fi
rm’s 
products and changes in government economic policy.
SWOT analysis:
a form 
of strategic analysis that 
identifies and analyses the 
main internal strengths and 
weaknesses and external 
opportunities and threats 
that will influence the 
future direction and success 
of a business
emerging markets by 2015. In Europe, one of the most competitive car markets in the 
world, the target is to increase sales by 300 000 cars a year by the same date.
Departmental operating targets have also been established. For example, the human 
resources department must prepare for up to 8000 job losses and operations must aim 
to cut fixed manufacturing costs by 30% and costs of purchasing car parts by 4–6% a 
year. Marketing must plan to launch 12 new models in the Chinese market.
The chairman also announced his intention to take both car brands upmarket and 
establish them as premium car brands that increasing numbers of customers will want 
to own.
Source: 
www.timesonline.co.uk
26 marks, 52 minutes
1.
Analyse whether Peugeot Citroën’s objectives fit the SMART criteria. 
[6]
2.
Analyse the importance of the chairman not only setting an overall aim for 
the
company but also establishing departmental objectives. 
[10]
3.
To what extent might the chairman’s new objectives meet with the needs 
of
the
company’s shareholders? 
[10]

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Organisational objectives
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