Business is a complex concept that encompasses various activities related to the production, exchange, distribution, and consumption of goods and services to meet the needs of the market. It is the process of creating, developing, and delivering value to customers and stakeholders in the economy. The business has a significant impact on society, the environment, and the economy as a whole. It is an essential component of modern-day civilization that plays a crucial role in the development and growth of society. In this article, we will discuss the essential features of business and different objectives of business in detail.
Essential Features of Business:
1. Economic Activity: Business is primarily an economic activity that involves the production and exchange of goods and services for a profit. It is concerned with the creation of value for customers and stakeholders by providing them with products or services that satisfy their needs and wants.
2. Profit Orientation: The primary objective of business is to earn a profit by selling products or services to customers. Profit is the surplus amount that remains after deducting the total cost of production from the total revenue earned.
3. Creation of Utility: Business involves the creation of utility by transforming raw materials into finished goods and services that satisfy the needs and wants of customers. There are four types of utility: form utility, time utility, place utility, and possession utility.
4. Risk and Uncertainty: Business involves risk and uncertainty, which means that there is no guarantee of success. Business owners have to take calculated risks and make informed decisions to ensure the success of their businesses.
5. Legal Entity: A business is a legal entity that has its own identity and can enter into contracts, own assets, and incur liabilities. It is separate from its owners and can operate independently.
6. Continuous Process: Business is a continuous process that involves various stages, such as production, marketing, sales, and distribution. It requires continuous efforts and innovations to ensure the growth and success of the business.
Different Objectives of Business:
1. Profit Maximization: Profit maximization is the primary objective of most businesses. It involves maximizing the profit by increasing revenue and reducing costs.
2. Sales Growth: Sales growth is another objective of business that involves increasing the volume of sales by expanding the customer base, introducing new products or services, and entering new markets.
3. Market Share: Market share is the percentage of total sales in a particular market that is attributed to a particular company or brand. The objective of market share is to increase the market share by outperforming competitors.
4. Customer Satisfaction: Customer satisfaction is an essential objective of business that involves providing high-quality products and services that meet the needs and wants of customers.
5. Social Responsibility: Social responsibility is becoming an increasingly important objective of business. It involves taking responsibility for the impact of business activities on society, the environment, and the economy.
6. Innovation and Growth: Innovation and growth are important objectives of business that involve developing new products and services, improving existing products and services, and expanding the business into new markets.
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