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With its unseen questions, the IB Business Management Paper 2 is often a source anxiety for many students. In this post, we’ll however provide a thorough breakdown of this paper, ensuring you can approach it confidently.
IB Business Management Paper 2
- Paper 2 is based on unseen stimulus material with a quantitative focus.
- For SL, Paper 2 contributes 35% to the overall subject grade, while for HL, it accounts for 30%.
- SL students have 1 hour 30 minutes, while HL students are given 1 hour 45 minutes to complete Paper 2.
- A calculator is required for this exam.
- Paper 2 is made up of two sections – Section A and Section B.
Section A
- Section A is made up of medium-length questions
- There is a quantitative focus in these questions. Students answer questions with reference and analysis of the provided information
- Paper 2 may cover all 5 units of the syllabus
- Students must be equipped with the skills of analysing and presenting information.
A typical Section A question may look like this:
Florian Stones (FS) sells handmade bracelets made from natural stones. FS enjoys strong brand awareness. Table 2 shows forecasted figures for FS for the year ending 31 December 2022.
| Fixed costs | $15 000 |
| Variable costs per bracelet | $40 |
| Price per bracelet | $70 |
| Number of bracelets produced | 800 |
(a) Define the term ''brand awareness'' [2]
(b) Using Table 2, draw a fully labelled break-even chart, to scale, for 2022. [4]
(c) Using Table 2, calculate:
(i) the profit or loss in 2022 for FS if its production and sales increases to 1200. [2]
(ii) the price FS would need to charge per bracelet if it sells 800 bracelets and wants to make profit of $10,000. Assume that the costs remain the same. [2]
Section B
- In this section, students choose to answer one out of two questions
- The questions in Section B, in structure, are very similar to those in Section A
- The Section B questions however are longer and require deeper analysis.
A typical Section B question may look like this:
Coco Delight (CD) produces a range of luxury chocolate bars that are sold and manufactured in New Zealand. CD has created an overseas supply chain in which all ingredients for its chocolate bars are imported to New Zealand.
(a) Describe one feature of a supply chain [2]
CD is aware that overseas suppliers use palm oil* in the production of chocolate bars. Palm oil production is damaging to the environment, so CD has decided to produce a new ethical chocolate bar that contains only a quarter of the palm oil used in its other chocolate bars. These new ethical chocolate bars will be considerably more expensive than the chocolate bars in CD’s current range and will be priced using a premium pricing method. Part of the profits from the sales of the new chocolate bars will be used to finance sustainable palm oil production to reduce the impact on the environment.
(b) Explain one advantage and one disadvantage for CD of using a premium pricing method for the new ethical chocolate bar. [4]
CD is considering exporting the ethical chocolate bars to consumers in new overseas markets. It has identified three possible target countries: X, Y and Z. CD used a random sampling method of 500 consumers in each of the three countries to carry out market research. The new ethical chocolate bar is to be launched in 2024. The results of the market research are given in Table 4.
Table 4
| Possible target country | Percentage of respondents who would try the new ethical chocolate bar | Percentage of respondents who would possibly try the new chocolate bar | Percentage of respondents who would not try the new chocolate bar |
|---|---|---|---|
| X | 60% | 32% | 8% |
| Y | 42% | 38% | 20% |
| Z | 28% | 62% | 10% |
(c) Comment on the market research in Table 4. [2]
(d) Explain one benefit for CD of collecting market research using random sampling. [2]
CD has employed an economics consultancy to review the current and future economic situation in each of the three possible target countries in which it wants to launch the new ethical chocolate bar. The chocolate bar is expected to be priced higher than the chocolate bars of CD’s competitors in all three countries. No ethical chocolate bars are currently produced by these competitors.
The consultancy:
- forecasted economic conditions for each possible target country for 2024 and 2028
- used data from the last six years and estimated the probability of CD’s success upon entering each market based on the experiences of other confectionery manufacturers
- carried out an extensive STEEPLE analysis for each possible target country.
Table 5
| Target country | Forecasted economic conditions in 2024 | Forecasted economic conditions in 2028 | Probability of success | STEEPLE analysis summary |
|---|---|---|---|---|
| X | Stable | Worsening | 0.42 | Favourable to business |
| Y | Improving | Stable | 0.58 | No clear trend but limited technology |
| Z | Declining | Strongly improving | 0.79 | Concerns, especially about political in the future |
(e) Using the data provided in Table 4 and Table 5, and other information in the stimulus, recommend which target country CD should launch its new ethical chocolate bar in [10]
How to succeed in Business Management Paper 2?
To do well in Paper 2 of IB Business Management, you need a strong understanding of the syllabus and good analytical skills. Knowing the units thoroughly is important because the paper can cover virtually any topics of the syllabus. It’s however just as important to be able to think critically and analyze information. This includes reading and understanding financial statements, market data, and other business information. You must be able to effectively spot trends, problems, or opportunities. To develop these practical skills, it’s best to practice with past exam questions. This helps you get used to applying your knowledge to real-life business scenarios, explaining your ideas clearly, and backing them up with evidence.
We hope you found this post helpful. For more useful materials associated with the IB check out the wide variety of IA, EE and TOK exemplars available at Clastify.
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