inancial objectives include those associated with growth in revenues, growth in
ID: 386582 • Letter: I
Question
inancial objectives include those associated with growth in revenues, growth in earnings ives," dividends, larger profit margins, greater return on investment, higher earnings per share, bighins stock price, improved cash flow, and so on; whereas strategic objectives include things a larger market share, quicker on-time delivery than rivals, shorter design-to-market than rivals, lower costs than rivals, higher product quality than rivals, wider geographic verage than rivals, achieving technologial leadership. consistently geting new or improved her rising stoc ucts to market ahead of rivals, and so on Although financial objectives are especially important in firms, oftentimes there is a trade- n financial and strategic objectives such that crucial decisions have to be made. For example, a firm can do certain things to maximize short-term financial objectives that would harm long-term strategic objectives. To improve financial position in the short run through higher off betwee TABLE 5-2 Eight Desired Characteristics of Objectives 1. Quantitative 2. Measurable 3. Realistic 4. Understandable 5. Challenging 6. Hierarchical 7. Obtainable 8. Congruent across departmentsExplanation / Answer
Three financial objectives could be:
Five Strategic objectives could be:
Long-term objective of Uber could be "To become substitute of about 80 percent owned personal cars."
The financial objectives are chosen because increase in earnings is crucial for Uber to breakeven. Investors are to be kept under confidence as Uber needs to invest more money for penetration in existing and expansion in new markets, innovate and improve technology. To be successful in long term and get low cost funding, ultimately company needs to go public and reduce dependency on private investors. But to come out with successful IPO it is desired that company show some profit and attract public to subscribe IPO.
The rationale behind choosing above mentioned objectives could be explained through following arguments.
Few suggested strategies for Uber in context of above objectives are:
Cost leadership competitive strategy seems to be at core of Uber. While applying this strategy Uber needs to ensure it offers best value to customers. Under this variant of Cost leadership, Uber instead of offering no-frill lowest cost services, identify customer valued service attributes and make them available to customers at cost lower that competitors.
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