Core Business Objectives & Commercial Activities

Economic Objectives of Business

Business is an economic activity, and therefore, its primary purpose is to achieve economic results. The key economic objectives of business are as follows:

• Earning Profit

  Profit signifies the excess of income over expenditure. The foremost and prime objective of every businessman is to earn profit. A business cannot survive without earning profit. It is not only essential for survival but also crucial for the growth and expansion of the business.

• Market Standing & Customer Creation

  A business can survive for a longer period only if it can capture a significant market share and establish strong market standing. This is possible only when the business provides goods and services that satisfy the needs and wants of customers. Therefore, the creation and satisfaction of customers (market) is a crucial objective of business.

• Innovation in Business

  Innovation involves developing new products or enhancing existing ones with new features to make them more useful. It also includes improving methods of production and distribution, and exploring new markets. In today's competitive landscape, a business thrives by introducing new designs, better machinery, improved techniques, and diverse product varieties.

• Optimum Utilization of Resources

  This refers to the most effective use of human resources, materials, money, and machinery employed in a business. Business resources are scarce, so they must be utilized optimally to maximize benefits from these resources.

Understanding Commerce and Trade

Commerce includes two primary types of activities:

Trade: Buying and Selling for Profit

Trade refers to the buying and selling of goods and services with the objective of earning profit. It is classified into two main categories:

Internal Trade Explained

1. Internal Trade: This takes place within a country. Internal trade is further classified into two categories: wholesale trade and retail trade.

Wholesale Trade

i) Wholesale Trade: This refers to the buying and selling of goods in large quantities. A wholesaler buys goods in large quantities from producers and sells them to other dealers. He serves as a connecting link between the producer.