IB · BM HL

Business Management HL

Growth and evolution (Unit 1, HL) — Unit 1 HL

Name: ____________________Date: October 14, 2026

1.
A regional airline is considering whether to expand into long-haul international routes. Its strengths include a strong safety record and a loyal domestic customer base; its weaknesses include an ageing fleet unsuited to long-haul flights. (a) Explain how this SWOT information could support a decision against immediate long-haul expansion. (b) Suggest one internal action the airline could take before expanding to address the identified weakness.
[4 marks] · no calculator
Marking points
- Explains that the ageing fleet weakness directly undermines the operational requirements of long-haul flying, such as range, comfort and reliability.
- Explains that expanding immediately without addressing this weakness risks poor customer experience or higher maintenance/safety risk that could damage the airline's stated strong safety reputation.
- Concludes that the SWOT evidence supports delaying expansion until the weakness is addressed.
- Suggests a valid internal action, such as fleet renewal or leasing newer long-haul aircraft, or a phased/partnered expansion approach.
Examiner tip: A strong SWOT-based recommendation explicitly connects a specific strength or weakness to the specific decision, rather than restating the factors in isolation.
2.
Marking analysis: A learner attempts the following task: “A regional airline is considering whether to expand into long-haul international routes. Its strengths include a strong safety record and a loyal domestic customer base; its weaknesses include an ageing fleet unsuited to long-haul flights. (a) Explain how this SWOT information could support a decision against immediate long-haul expansion. (b) Suggest one internal action the airline could take before expanding to address the identified weakness.” Their response addresses only this point: “Explains that the ageing fleet weakness directly undermines the operational requirements of long-haul flying, such as range, comfort and reliability.” Evaluate the response against the complete 4-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[4 marks] · no calculator
Marking points
- Recognises credit for the stated point: Explains that the ageing fleet weakness directly undermines the operational requirements of long-haul flying, such as range, comfort and reliability.
- Identifies the missing requirement: Explains that expanding immediately without addressing this weakness risks poor customer experience or higher maintenance/safety risk that could damage the airline's stated strong safety reputation.
- Identifies the missing requirement: Concludes that the SWOT evidence supports delaying expansion until the weakness is addressed.
- Identifies the missing requirement: Suggests a valid internal action, such as fleet renewal or leasing newer long-haul aircraft, or a phased/partnered expansion approach.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
3.
A furniture retailer is evaluating two growth options: (Option A) selling its existing furniture range through a new online store to its existing domestic market, or (Option B) selling a new range of outdoor furniture to a new overseas market. (a) Using the Ansoff Matrix, identify the growth strategy represented by Option A. (b) Identify the growth strategy represented by Option B. (c) State which option is generally considered lower risk. (d) Explain why.
[5 marks] · no calculator
Marking points
- Identifies Option A as market penetration/market development, since it uses an existing product in an existing market through a new channel.
- Identifies Option B as diversification, since it combines a new product and a new market.
- States that Option A is generally lower risk.
- Explains that Option A builds on existing product knowledge and an existing customer base, whereas Option B combines two unfamiliar elements simultaneously.
- Notes that diversification is considered the highest-risk Ansoff quadrant precisely because it removes both familiar anchors at once.
Examiner tip: Position each option on the Ansoff Matrix by asking separately whether the product is new and whether the market is new.
4.
Marking analysis: A learner attempts the following task: “A furniture retailer is evaluating two growth options: (Option A) selling its existing furniture range through a new online store to its existing domestic market, or (Option B) selling a new range of outdoor furniture to a new overseas market. (a) Using the Ansoff Matrix, identify the growth strategy represented by Option A. (b) Identify the growth strategy represented by Option B. (c) State which option is generally considered lower risk. (d) Explain why.” Their response addresses only this point: “Identifies Option A as market penetration/market development, since it uses an existing product in an existing market through a new channel.” Evaluate the response against the complete 5-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[5 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies Option A as market penetration/market development, since it uses an existing product in an existing market through a new channel.
- Identifies the missing requirement: Identifies Option B as diversification, since it combines a new product and a new market.
- Identifies the missing requirement: States that Option A is generally lower risk.
- Identifies the missing requirement: Explains that Option A builds on existing product knowledge and an existing customer base, whereas Option B combines two unfamiliar elements simultaneously.
- Identifies the missing requirement: Notes that diversification is considered the highest-risk Ansoff quadrant precisely because it removes both familiar anchors at once.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
5.
A company is deciding how to grow: (Option A) reinvesting its own retained profit to gradually open new stores itself, or (Option B) acquiring an existing chain of stores from a competitor. (a) Identify Option A as organic (internal) growth or external growth. (b) Identify Option B as organic (internal) growth or external growth. (c) Suggest one situation in which a company would prefer Option B over Option A.
[3 marks] · no calculator
Marking points
- Identifies Option A as organic (internal) growth.
- Identifies Option B as external growth.
- Suggests a valid situation, such as when the company wants to grow quickly and gain instant access to an established customer base, brand, or market presence that would take much longer to build organically.
Examiner tip: Organic growth is generally slower but lower-risk and keeps full control internal; external growth is faster but carries integration risk and often requires significant upfront capital or debt.
6.
Marking analysis: A learner attempts the following task: “A company is deciding how to grow: (Option A) reinvesting its own retained profit to gradually open new stores itself, or (Option B) acquiring an existing chain of stores from a competitor. (a) Identify Option A as organic (internal) growth or external growth. (b) Identify Option B as organic (internal) growth or external growth. (c) Suggest one situation in which a company would prefer Option B over Option A.” Their response addresses only this point: “Identifies Option A as organic (internal) growth.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies Option A as organic (internal) growth.
- Identifies the missing requirement: Identifies Option B as external growth.
- Identifies the missing requirement: Suggests a valid situation, such as when the company wants to grow quickly and gain instant access to an established customer base, brand, or market presence that would take much longer to build organically.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
7.
Two companies of similar size in the same industry combine to form a single new company, with both sets of shareholders agreeing to the combination. (a) Identify this method of external growth. (b) Distinguish this from a takeover (acquisition), in which one company purchases a controlling stake in another.
[3 marks] · no calculator
Marking points
- Identifies this as a merger.
- States that a merger is typically a mutual, negotiated combination of two roughly similarly sized companies into one new entity, agreed to by both sets of shareholders.
- States that a takeover/acquisition instead involves one company purchasing a controlling stake in another, which can happen without the agreement of the target company's management (a hostile takeover), and the acquired company typically loses its separate identity into the acquirer.
Examiner tip: A merger is usually presented as a combination of equals; a takeover clearly has one company in control of the other, whether the target's management agrees or not.
8.
Marking analysis: A learner attempts the following task: “Two companies of similar size in the same industry combine to form a single new company, with both sets of shareholders agreeing to the combination. (a) Identify this method of external growth. (b) Distinguish this from a takeover (acquisition), in which one company purchases a controlling stake in another.” Their response addresses only this point: “Identifies this as a merger.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies this as a merger.
- Identifies the missing requirement: States that a merger is typically a mutual, negotiated combination of two roughly similarly sized companies into one new entity, agreed to by both sets of shareholders.
- Identifies the missing requirement: States that a takeover/acquisition instead involves one company purchasing a controlling stake in another, which can happen without the agreement of the target company's management (a hostile takeover), and the acquired company typically loses its separate identity into the acquirer.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
9.
A domestic airline wants to start offering international flights but lacks the local knowledge, landing rights, and airport relationships needed in a specific foreign country. It partners with a foreign airline: the two remain fully independent companies, but they agree to jointly create and jointly own a brand-new, separate airline company to operate these specific international routes together. (a) Identify this method of external growth. (b) Distinguish it from a strategic alliance, in which the two companies would cooperate without creating a new, separate jointly owned company.
[3 marks] · no calculator
Marking points
- Identifies this as a joint venture.
- States that a joint venture involves creating a new, separate, jointly owned company, with both parent companies sharing the risks, costs, and profits of that new entity.
- States that a strategic alliance instead involves the two companies cooperating (e.g., sharing resources, expertise, or technology) towards a common goal, while remaining fully separate and not creating any new jointly owned company.
Examiner tip: The key distinguishing feature of a joint venture is the creation of a genuinely new, separately owned company — a strategic alliance is a looser form of cooperation without that new shared entity.
10.
Marking analysis: A learner attempts the following task: “A domestic airline wants to start offering international flights but lacks the local knowledge, landing rights, and airport relationships needed in a specific foreign country. It partners with a foreign airline: the two remain fully independent companies, but they agree to jointly create and jointly own a brand-new, separate airline company to operate these specific international routes together. (a) Identify this method of external growth. (b) Distinguish it from a strategic alliance, in which the two companies would cooperate without creating a new, separate jointly owned company.” Their response addresses only this point: “Identifies this as a joint venture.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies this as a joint venture.
- Identifies the missing requirement: States that a joint venture involves creating a new, separate, jointly owned company, with both parent companies sharing the risks, costs, and profits of that new entity.
- Identifies the missing requirement: States that a strategic alliance instead involves the two companies cooperating (e.g., sharing resources, expertise, or technology) towards a common goal, while remaining fully separate and not creating any new jointly owned company.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
11.
A successful restaurant chain wants to expand rapidly into many new cities without funding all the new restaurants itself. It allows independent local business owners to open and operate new restaurants using its brand name, recipes, and business systems, in exchange for an upfront fee and ongoing royalty payments. (a) Identify this method of growth. (b) Explain one benefit of this method for the restaurant chain (the franchisor). (c) Explain one benefit of this method for the local business owner (the franchisee).
[3 marks] · no calculator
Marking points
- Identifies this as franchising.
- Explains a valid benefit for the franchisor, such as rapid expansion funded mainly by the franchisees' own capital, and earning ongoing royalty income with lower financial risk than opening company-owned outlets itself.
- Explains a valid benefit for the franchisee, such as operating under an already well-known, trusted brand with a proven business model, reducing the risk of business failure compared with starting an entirely new, unknown restaurant.
Examiner tip: Franchising lets a brand expand using other people's capital and local effort, in exchange for giving up some direct control and sharing profit through royalties.
12.
Marking analysis: A learner attempts the following task: “A successful restaurant chain wants to expand rapidly into many new cities without funding all the new restaurants itself. It allows independent local business owners to open and operate new restaurants using its brand name, recipes, and business systems, in exchange for an upfront fee and ongoing royalty payments. (a) Identify this method of growth. (b) Explain one benefit of this method for the restaurant chain (the franchisor). (c) Explain one benefit of this method for the local business owner (the franchisee).” Their response addresses only this point: “Identifies this as franchising.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies this as franchising.
- Identifies the missing requirement: Explains a valid benefit for the franchisor, such as rapid expansion funded mainly by the franchisees' own capital, and earning ongoing royalty income with lower financial risk than opening company-owned outlets itself.
- Identifies the missing requirement: Explains a valid benefit for the franchisee, such as operating under an already well-known, trusted brand with a proven business model, reducing the risk of business failure compared with starting an entirely new, unknown restaurant.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
13.
As a manufacturing company has grown much larger, its head office has become slower at communicating decisions to individual factories, and different departments increasingly duplicate each other's work without realising it. (a) Identify the concept illustrated by these problems. (b) Explain how growing significantly larger can specifically cause the communication problem described.
[3 marks] · no calculator
Marking points
- Identifies diseconomies of scale.
- Explains that as a company grows very large, communication must pass through more layers of management and across more separated sites/departments, making it slower and more prone to distortion or being lost entirely.
- Links this directly to the described symptoms of slow decision communication and duplicated work between departments unaware of each other's activities.
Examiner tip: Diseconomies of scale are the rising average costs (or falling efficiency) that can occur once a business grows beyond its optimal size — communication and coordination problems are among the most common causes.
14.
Marking analysis: A learner attempts the following task: “As a manufacturing company has grown much larger, its head office has become slower at communicating decisions to individual factories, and different departments increasingly duplicate each other's work without realising it. (a) Identify the concept illustrated by these problems. (b) Explain how growing significantly larger can specifically cause the communication problem described.” Their response addresses only this point: “Identifies diseconomies of scale.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies diseconomies of scale.
- Identifies the missing requirement: Explains that as a company grows very large, communication must pass through more layers of management and across more separated sites/departments, making it slower and more prone to distortion or being lost entirely.
- Identifies the missing requirement: Links this directly to the described symptoms of slow decision communication and duplicated work between departments unaware of each other's activities.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
15.
A large supermarket chain is able to negotiate significantly lower prices per unit from suppliers than a small independent grocery store can, simply because it buys in much greater bulk. (a) Identify the type of economy of scale illustrated here. (b) Identify and briefly describe one other distinct type of economy of scale that a large business could benefit from.
[2 marks] · no calculator
Marking points
- Identifies purchasing (bulk-buying) economies of scale.
- Identifies and briefly describes one other valid type, such as technical economies (spreading the cost of expensive specialised machinery over a larger output), financial economies (larger firms often borrowing at lower interest rates), managerial economies (affording specialist managers whose salary is spread over larger output), or risk-bearing economies (diversifying across more products/markets to spread risk).
Examiner tip: Each type of economy of scale reduces average cost through a different mechanism — always name the specific mechanism (bulk buying, specialised machinery, cheaper borrowing, etc.), not just 'the business gets more efficient'.
16.
Marking analysis: A learner attempts the following task: “A large supermarket chain is able to negotiate significantly lower prices per unit from suppliers than a small independent grocery store can, simply because it buys in much greater bulk. (a) Identify the type of economy of scale illustrated here. (b) Identify and briefly describe one other distinct type of economy of scale that a large business could benefit from.” Their response addresses only this point: “Identifies purchasing (bulk-buying) economies of scale.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies purchasing (bulk-buying) economies of scale.
- Identifies the missing requirement: Identifies and briefly describes one other valid type, such as technical economies (spreading the cost of expensive specialised machinery over a larger output), financial economies (larger firms often borrowing at lower interest rates), managerial economies (affording specialist managers whose salary is spread over larger output), or risk-bearing economies (diversifying across more products/markets to spread risk).
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
17.
Two businesses fail within the same year: Business A fails because its founder made poor cash-flow management decisions and failed to control costs; Business B fails because a sudden, severe economic recession collapses demand across its entire industry. (a) Identify Business A's cause of failure as internal or external. (b) Identify Business B's cause of failure as internal or external. (c) Explain why distinguishing between internal and external causes of failure matters for evaluating the quality of a company's management.
[4 marks] · no calculator
Marking points
- Identifies Business A's cause of failure as internal.
- Identifies Business B's cause of failure as external.
- Explains that internal causes reflect decisions and controllable factors within the business itself (such as poor management), whereas external causes arise from the wider environment beyond the business's control (such as a recession).
- Explains that this distinction matters because it is unfair (and analytically inaccurate) to judge Business A's and Business B's management equally harshly, since only Business A's failure reflects genuinely poor decision-making that could have been avoided.
Examiner tip: When evaluating why a business failed, always separate what management could realistically have controlled from what it could not — this is central to a fair HL evaluation.
18.
Marking analysis: A learner attempts the following task: “Two businesses fail within the same year: Business A fails because its founder made poor cash-flow management decisions and failed to control costs; Business B fails because a sudden, severe economic recession collapses demand across its entire industry. (a) Identify Business A's cause of failure as internal or external. (b) Identify Business B's cause of failure as internal or external. (c) Explain why distinguishing between internal and external causes of failure matters for evaluating the quality of a company's management.” Their response addresses only this point: “Identifies Business A's cause of failure as internal.” Evaluate the response against the complete 4-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[4 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies Business A's cause of failure as internal.
- Identifies the missing requirement: Identifies Business B's cause of failure as external.
- Identifies the missing requirement: Explains that internal causes reflect decisions and controllable factors within the business itself (such as poor management), whereas external causes arise from the wider environment beyond the business's control (such as a recession).
- Identifies the missing requirement: Explains that this distinction matters because it is unfair (and analytically inaccurate) to judge Business A's and Business B's management equally harshly, since only Business A's failure reflects genuinely poor decision-making that could have been avoided.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
19.
A company proudly reports that its total sales revenue grew by 40% over the past year. (a) Identify two other measures, besides sales revenue, that could be used to assess whether a business has genuinely grown. (b) Explain why relying on sales revenue growth alone can give a misleading picture of a business's overall growth or success.
[4 marks] · no calculator
Marking points
- Identifies a valid alternative measure, such as market share, number of employees, number of outlets/branches, or total assets.
- Identifies a second valid alternative measure from the list above.
- Explains that revenue can rise for reasons that do not reflect genuine underlying growth, such as raising prices while selling fewer units, or growth achieved by sharply cutting profit margins.
- Concludes that a fuller picture of growth requires looking at multiple measures together, not revenue in isolation.
Examiner tip: Always be ready to name at least two or three growth measures beyond revenue: profit, market share, employees, outlets, and total assets are the most commonly cited.
20.
Marking analysis: A learner attempts the following task: “A company proudly reports that its total sales revenue grew by 40% over the past year. (a) Identify two other measures, besides sales revenue, that could be used to assess whether a business has genuinely grown. (b) Explain why relying on sales revenue growth alone can give a misleading picture of a business's overall growth or success.” Their response addresses only this point: “Identifies a valid alternative measure, such as market share, number of employees, number of outlets/branches, or total assets.” Evaluate the response against the complete 4-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[4 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies a valid alternative measure, such as market share, number of employees, number of outlets/branches, or total assets.
- Identifies the missing requirement: Identifies a second valid alternative measure from the list above.
- Identifies the missing requirement: Explains that revenue can rise for reasons that do not reflect genuine underlying growth, such as raising prices while selling fewer units, or growth achieved by sharply cutting profit margins.
- Identifies the missing requirement: Concludes that a fuller picture of growth requires looking at multiple measures together, not revenue in isolation.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
21.
A multinational company (MNC) based in a wealthy country opens a large factory in a developing country, hiring thousands of local workers and introducing new production technology, while also repatriating (sending home) most of its profits rather than reinvesting them locally. (a) Explain one benefit of this MNC's investment for the host (developing) country. (b) Explain one cost or drawback of this MNC's investment for the host country.
[4 marks] · no calculator
Marking points
- States a valid benefit, such as job creation, the transfer of new technology and skills to the local workforce, or increased tax revenue and export earnings for the host country.
- Explains this benefit specifically in relation to the scenario, e.g., thousands of new jobs directly reducing local unemployment.
- States a valid cost, such as most of the profit generated leaving the country (profit repatriation) rather than being reinvested or spent locally, limiting the wider economic benefit to the host country.
- Explains this cost specifically in relation to the scenario, e.g., that the described repatriation reduces how much of the economic value created actually stays and circulates within the local economy.
Examiner tip: A balanced evaluation of MNC investment always weighs tangible local benefits (jobs, technology transfer) against how much of the value created actually stays in the host economy versus leaving as repatriated profit.
22.
Marking analysis: A learner attempts the following task: “A multinational company (MNC) based in a wealthy country opens a large factory in a developing country, hiring thousands of local workers and introducing new production technology, while also repatriating (sending home) most of its profits rather than reinvesting them locally. (a) Explain one benefit of this MNC's investment for the host (developing) country. (b) Explain one cost or drawback of this MNC's investment for the host country.” Their response addresses only this point: “States a valid benefit, such as job creation, the transfer of new technology and skills to the local workforce, or increased tax revenue and export earnings for the host country.” Evaluate the response against the complete 4-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[4 marks] · no calculator
Marking points
- Recognises credit for the stated point: States a valid benefit, such as job creation, the transfer of new technology and skills to the local workforce, or increased tax revenue and export earnings for the host country.
- Identifies the missing requirement: Explains this benefit specifically in relation to the scenario, e.g., thousands of new jobs directly reducing local unemployment.
- Identifies the missing requirement: States a valid cost, such as most of the profit generated leaving the country (profit repatriation) rather than being reinvested or spent locally, limiting the wider economic benefit to the host country.
- Identifies the missing requirement: Explains this cost specifically in relation to the scenario, e.g., that the described repatriation reduces how much of the economic value created actually stays and circulates within the local economy.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
23.
A company based in a culture that values individual achievement and direct communication is expanding into a country whose culture, according to Hofstede's cultural dimensions, scores much higher on collectivism and places strong value on group harmony. (a) Identify the specific Hofstede dimension being described. (b) Explain one way the company's management style or HR practices might need to adapt when managing employees in this new cultural context.
[3 marks] · no calculator
Marking points
- Identifies the individualism versus collectivism dimension.
- Explains a valid adaptation, such as emphasising team-based goals and group recognition rather than individual performance rewards, or favouring more indirect, consensus-building communication and decision-making over blunt, direct individual feedback.
- Links the suggested adaptation explicitly back to the collectivist cultural context described, explaining why it would be better received than the company's original, more individualistic approach.
Examiner tip: Hofstede's dimensions (power distance, individualism vs collectivism, masculinity vs femininity, uncertainty avoidance, long-term vs short-term orientation, indulgence vs restraint) are HL-specific — always name the exact dimension involved.
24.
Marking analysis: A learner attempts the following task: “A company based in a culture that values individual achievement and direct communication is expanding into a country whose culture, according to Hofstede's cultural dimensions, scores much higher on collectivism and places strong value on group harmony. (a) Identify the specific Hofstede dimension being described. (b) Explain one way the company's management style or HR practices might need to adapt when managing employees in this new cultural context.” Their response addresses only this point: “Identifies the individualism versus collectivism dimension.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies the individualism versus collectivism dimension.
- Identifies the missing requirement: Explains a valid adaptation, such as emphasising team-based goals and group recognition rather than individual performance rewards, or favouring more indirect, consensus-building communication and decision-making over blunt, direct individual feedback.
- Identifies the missing requirement: Links the suggested adaptation explicitly back to the collectivist cultural context described, explaining why it would be better received than the company's original, more individualistic approach.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
25.
A factory experiences a sudden, unexpected chemical spill that forces an immediate evacuation and a halt to production, requiring the management team to respond within hours. (a) Identify whether this situation calls primarily for crisis management or contingency planning. (b) Explain the key difference between crisis management and contingency planning.
[3 marks] · no calculator
Marking points
- Identifies this as requiring crisis management.
- States that crisis management is a reactive response to an unexpected event that has already occurred and requires an immediate, often improvised, response.
- States that contingency planning is instead a proactive process, carried out in advance, of identifying potential future risks and preparing a plan for how the business would respond if each risk actually occurred.
Examiner tip: Good contingency planning done in advance is precisely what makes a company's crisis management response, when a crisis actually hits, faster and more effective rather than purely improvised.
26.
Marking analysis: A learner attempts the following task: “A factory experiences a sudden, unexpected chemical spill that forces an immediate evacuation and a halt to production, requiring the management team to respond within hours. (a) Identify whether this situation calls primarily for crisis management or contingency planning. (b) Explain the key difference between crisis management and contingency planning.” Their response addresses only this point: “Identifies this as requiring crisis management.” Evaluate the response against the complete 3-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[3 marks] · no calculator
Marking points
- Recognises credit for the stated point: Identifies this as requiring crisis management.
- Identifies the missing requirement: States that crisis management is a reactive response to an unexpected event that has already occurred and requires an immediate, often improvised, response.
- Identifies the missing requirement: States that contingency planning is instead a proactive process, carried out in advance, of identifying potential future risks and preparing a plan for how the business would respond if each risk actually occurred.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
27.
A growing manufacturing company is under pressure from customers and investors to reduce its environmental impact. It considers 'greening' its operations, for example by switching to renewable energy and more sustainable packaging. (a) Explain one way 'greening' the business could benefit the company in the long run. (b) Explain one reason the company's management might hesitate to invest in greening in the short run.
[4 marks] · no calculator
Marking points
- States a valid long-run benefit, such as an improved brand reputation attracting environmentally conscious customers and investors, or long-run cost savings from greater energy efficiency.
- Explains this benefit in more depth, e.g., linking improved reputation to increased sales or easier access to investment.
- States a valid reason for hesitation, such as the high upfront capital cost of new equipment or sustainable materials, which reduces short-run profit.
- Explains why this creates a genuine trade-off for management, since shareholders or lenders may prioritise near-term financial performance over long-run environmental benefits that take time to materialise.
Examiner tip: A strong HL answer on greening always weighs the long-run strategic benefit against the genuine short-run financial cost, rather than treating greening as a purely positive decision with no trade-off.
28.
Marking analysis: A learner attempts the following task: “A growing manufacturing company is under pressure from customers and investors to reduce its environmental impact. It considers 'greening' its operations, for example by switching to renewable energy and more sustainable packaging. (a) Explain one way 'greening' the business could benefit the company in the long run. (b) Explain one reason the company's management might hesitate to invest in greening in the short run.” Their response addresses only this point: “States a valid long-run benefit, such as an improved brand reputation attracting environmentally conscious customers and investors, or long-run cost savings from greater energy efficiency.” Evaluate the response against the complete 4-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[4 marks] · no calculator
Marking points
- Recognises credit for the stated point: States a valid long-run benefit, such as an improved brand reputation attracting environmentally conscious customers and investors, or long-run cost savings from greater energy efficiency.
- Identifies the missing requirement: Explains this benefit in more depth, e.g., linking improved reputation to increased sales or easier access to investment.
- Identifies the missing requirement: States a valid reason for hesitation, such as the high upfront capital cost of new equipment or sustainable materials, which reduces short-run profit.
- Identifies the missing requirement: Explains why this creates a genuine trade-off for management, since shareholders or lenders may prioritise near-term financial performance over long-run environmental benefits that take time to materialise.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.
29.
A traditional retailer that has only ever sold through physical stores launches an online e-commerce store to reach customers nationwide. (a) Explain one way this digital business model allows the company to grow beyond the geographic limits of its physical stores. (b) Explain one new challenge the company is likely to face as a result of operating online that it did not face with physical stores alone.
[2 marks] · no calculator
Marking points
- Explains that an online store allows the company to reach customers anywhere with internet access, no longer limited to people who can physically travel to a store location, enabling growth into new geographic markets without the cost of opening new physical branches.
- Explains a valid new challenge, such as the need to build reliable nationwide delivery/logistics, increased exposure to cybersecurity and data-protection risks, or new competition from other online retailers the company did not previously compete with locally.
Examiner tip: Going digital removes a geographic constraint on growth but replaces it with new operational challenges (logistics, cybersecurity, wider competition) that a purely local physical retailer did not previously need to manage.
30.
Marking analysis: A learner attempts the following task: “A traditional retailer that has only ever sold through physical stores launches an online e-commerce store to reach customers nationwide. (a) Explain one way this digital business model allows the company to grow beyond the geographic limits of its physical stores. (b) Explain one new challenge the company is likely to face as a result of operating online that it did not face with physical stores alone.” Their response addresses only this point: “Explains that an online store allows the company to reach customers anywhere with internet access, no longer limited to people who can physically travel to a store location, enabling growth into new geographic markets without the cost of opening new physical branches.” Evaluate the response against the complete 2-mark task. Identify what earns credit and state every additional requirement needed for full marks.
[2 marks] · no calculator
Marking points
- Recognises credit for the stated point: Explains that an online store allows the company to reach customers anywhere with internet access, no longer limited to people who can physically travel to a store location, enabling growth into new geographic markets without the cost of opening new physical branches.
- Identifies the missing requirement: Explains a valid new challenge, such as the need to build reliable nationwide delivery/logistics, increased exposure to cybersecurity and data-protection risks, or new competition from other online retailers the company did not previously compete with locally.
Examiner tip: Treat each marking point as a separate requirement. Do not award the same idea twice, and do not infer work the learner did not show.