SCOPE AND ACTIVITIES OF BUSINESS. Part 3
Sales Maximization objective
Sales maximization is one of the objectives that are pursed to ensure profit. The efforts involved in maximizing sales include improvement in product quality, effective distribution,aggressive promotional efforts such as intense advertising, sales promotion and the use of attractive price such as prince-cutting and discounts.
Growth is the expansion and development in the scope of any business, either internally or externally or both due to a properly planned and organized efforts of its management. This means growth is an indeed goal which in most cases is pursed yo get more market share for enhancement of sales, hence profit.
Internal growth can be achieved through new product development, market development that is,expanding through,for example, network of branches to new geographical areas and expansion of production facilities such as machines, shop space which may mean more labour requirements.
On the other hand, external growth, unlike the internal growth that involves the expansion of a single business scope, means the integration of two or more business firms. This could be through a joint venture, merger or acquisition. The motives behind external growth may be for technical reasons, proper capitalization or for any other strategic reason.
Cost Minimization Objective
The ability of any management team or manager to increase sales is as crucial as cost-effectiveness ability. Managers must keep searching for ways of maintaining levels of cost that are considered not only economical but profitable. Different strategies are adopted to ensure minimum and competitive costs of operation.
High costs do not only erode profit but when not checked, business capital can be adversely affected. Cost minimization is usually pursued at every stage and part of the operation. Costs are controlled, for example, from raw materials or inputs purchases to finished products and distribution stages. Costs are equally checked in administrative, logistics and all functional areas of any business organization.