Exploring Business Objectives

SMART = Specific, Measurable, Attainable, Relevant, Timely

Task 1

Instructions:

  1. Part 1: Match the SMART Objective to the Correct Department.
    • Read each SMART objective carefully.
    • Match it to the appropriate department: Marketing, Operations, HR, or Finance.
  2. Part 2: Match the Objective to the Relevant Company.
    • Once you’ve assigned each objective to a department, match it with the real-life company that would most likely have such an objective.

Matching Companies

A. Apple
B. Toyota
C. McDonald’s
D. Coca-Cola
E. Google
F. Amazon

SMART Objectives

  1. Increase brand awareness among 18-30-year-olds by 25% through targeted social media campaigns on Instagram and TikTok over the next 12 months.
    • Department: __________
    • Company: __________
  2. Reduce production waste by 15% within the next 18 months through the adoption of lean manufacturing techniques.
    • Department: __________
    • Company: __________
  3. Hire 50 additional software engineers within the next 6 months to support the development of new product features, ensuring a 90% retention rate in the first year.
    • Department: __________
    • Company: __________
  4. Increase net profit margin by 5% within the next fiscal year by reducing operational expenses and optimizing the supply chain.
    • Department: __________
    • Company: __________
  5. Train 100% of customer service staff within the next 9 months on new software to improve customer satisfaction scores by 20%.
    • Department: __________
    • Company: __________
  6. Launch 3 new product lines by the end of Q4 to increase market share by 10% in the North American region.
    • Department: __________
    • Company: __________

Task 2: Case Study

Luckin Coffee

Luckin Coffee, founded in 2017, is China’s fastest-growing coffee chain. By mid-2024, the company operated nearly 20,000 stores, making it the largest coffee chain in China. Known for its focus on technology-driven convenience, the company specializes in small-format stores offering pick-up and delivery, with a strong emphasis on digital app ordering.

One of Luckin Coffee’s main objectives is expansion and innovation. To achieve this, the company has taken several strategic steps, including:

  • Rapid expansion of outlets: Luckin opened over 1,300 new stores in the second quarter of 2024, although it has slowed down slightly from its previous aggressive pace.
  • Product innovation: The company has introduced new beverages that resonate with local tastes and is focusing on high-quality, barista-prepared drinks.
  • Leveraging technology: A significant portion of Luckin’s operations is conducted through its mobile app, allowing seamless ordering and quick pick-up, giving it an edge in convenience.

These strategies have led to significant growth. In the second quarter of 2024, Luckin Coffee reported a 35% year-on-year increase in revenue, reaching RMB 8.4 billion ($1.1 billion). Despite slowing its expansion, the company saw a notable surge in average monthly transacting customers, peaking at 69.7 million—a 62% increase compared to the previous year

Questions

  1. Define the term business objective. [2]
  2. Explain two reasons why Luckin Coffee might set expansion as an objective. [6]
  3. Explain two possible drawbacks of Luckin Coffee aggressively pursuing expansion as their main objective [6]