Business Goals Kathmandu PDF

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BUSINESS GOALS Kathmandu Holdings Limited

Student Name: Preferred Name: Student Number: Class: Teacher: Word Count: 880 words

Business Goals

1.0 Introduction A business operates to achieve goals and is striving towards it every day (Sykes, 2010, p. 119). The purpose of this report is to look at the financial and non-financial goals affecting the business and the society. Kathmandu Holdings Limited (KMD) is used as an example to show how accomplishing those goals are interconnected.

2.0 Goals Goals are “desired outcomes the individual or business intends to achieve within a specific time frame.” (Chapman, 2014, p. 144). Goals can be defined into financial and non-financial goals.

3.0 Financial and Non-financial Goals (i) Financial Goals Financial goals are targets which business focuses on the rate of return for their investments (Horsley, 2010, p.12). Examples are profits, market share, growth and share prices. (ii) Non-Financial Goals Non-financial goals of business consist of improving the quality of life in their community. The business achieves those by contributing time and financial support to care towards employees, customers, government and the environment. Social justice, ecological sustainability, staff evolvement, code of practice and compliance with the law are some examples of it (Roll, 2011, p.101).

4.0 Business plans on achieving future goals - Kathmandu Holdings Limited (KMD) Behind the accomplishment of every business goal, there are unseen hard work, planning, persistence from internal stakeholders to make the best for the company and its members of its society. Kathmandu Holdings Limited (KMD) is an Australian public transnational chain of retail store has 165 retail stores worldwide in 2020 (KMD, 2020 p.10). KMD is a global

outdoor, lifestyle, and sports company, made up of 3 iconic brands: Kathmandu, Rip Curl, and Oboz; specializing in quality clothing and equipment for travel and adventure. The 3 main goals of KMD are profit (financial), ecological sustainability and social justice (non-financial).

(i) Profit (Financial) Profit is one of main reason a company exist and is related to other goals as the “success” of a business is related to the amount of profit (Sykes, 2010, p.119). Profit is also directly related to the dividends and share prices. KMD ‘s net profits and revenue has been fluctuating throughout the years. The underlying net profit after tax in 2020 was down 44.5% to $31.5 million which is impacted by the lockdowns of retail stores due world pandemic (KMD, 2020, p.4). The share price of KMD was 2.32NZD at the end of 2019, and it plunged to 0.6NZD. The future goal of KMD is for it to rise up to 1.50NZD in the first half of 2021 and continue the trend in the future. In order to remain positive on the balance sheet; KMD suspend dividends. Hence, by reducing dividends paid, they improve their end of year balance equity from NZ$442,062,000 (2019) to NZ$779,202,000 in 2020 (KMD, 2020, p.15). By increasing the end of year balance for 2020, KMD ‘s future goal is to maximize revenue, sales and profit in the future by reinvesting to reach their goal of over NZ$781,000,000 in the first half of 2021.

(ii) Ecological Sustainability (Non-Financial) Businesses’ environmental goals are focused on having ‘green awareness” at the expense of some profitability (Hickey, Nader & Williams, 2017, p.80). Being environmental will bring better publicity of the business from external stakeholders like customers and the government. KMD remain eco-friendly by using only sustainable cotton and opened the first fully solar-powered store in Australia in 2016 (KMD, 2020, p22). Some of the future environmental goal for KMD is to have 100% sustainable packaging and net-zero carbon goal by 2025. To try and achieve net-zero carbon goal, KMD opened the 100% solar powered store, which reduces roughly 124 tons of carbon dioxide. As for fully sustainable packaging, KMD ask customers if they require plastic bags & recycling cardboard and plastic by expanding their partnership with local recyclers- turning soft plastic into other products to work towards their 100% sustainable packaging goal (KMD, 2020, p23).

(iii) Social Justice (Financial & Non-Financial) Social Justice is the sense of duty a company has on considering the impact of its action on the members of the society (Roll, 2011, p.101). On International Women’s Day, it donated 1% of its sales and have up to 5 female senior leaders in its company; and one of its future goal is to increase the female leaders by developing formal policy and support to female employees (KMD, 2020, p30). Furthermore, KMD runs 12 audits on its 99 partner’s factories in 2020 alone and has break their partnership with 10 due to contradicting its code of practice. KMD has also announced its future goal to change 100,000 lives of workers in its supply chain with education programs in Nepal. Moreover, this year there has been only 1 reported incident concerning about the safety of its workers (KMD, 2020, p25). Those factors motivate the staff in KMD to be more productive as they feel they too contribute to the society they live in, and increase quality of their work. KMD’s aim is “to do less but do better” which indirectly relates to the probability of the business.

5.0 Conclusion All businesses will attempt to reach their goals to benefit themselves, the society and the environment they live in. Achieving those goals are interrelated to one another which helps to ensure business success. The example of KMD highlights these goals and their links.

Reference List Chapman, S. (2014). Business studies in action: preliminary course (4th ed.).

Hickey, M., Nader, T., & Williams, T. (2017) Cambridge preliminary business studies (4th ed.). Port Melbourne: Cambridge University Press.

Horsley, M. (2010). Business focus preliminary. Pearson Australia.

Kathmandu Holdings Limited. (2020). Annual Report – 2020. Retrieved March 7, 2021, from, https://www.kathmanduholdings.com/wp-content/uploads/2020/10/KHL-AnnualReport-2020_online.pdf

Kathmandu Holdings Limited. (2020). Sustainability Report – 2020. Retrieved March 13, 2021, from, https://www.kathmanduholdings.com/wpcontent/uploads/2020/10/Kathmandu_Sustainability_Report_2020.pdf

Roll, G. (2011). Mastering Preliminary Business Studies. Five Senses Education Pty Ltd.

Sykes, D. (2010). Preliminary business studies (Get going with business) (2nd ed.)....