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These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.

02 Hours 30 Minutes

100 Marks

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IB BUSINESS MANAGEMENT HL, Paper 2, May, 2005, TZ0, Solved Past Paper

Master the 2005 IB May for Paper 2 Business Management HL with examiner tailored solutions and comments for TZ0

Question 1 [Explained]

The merger of AOL and Time Warner in 2001 was a significant event in the business world, combining the innovative technology of AOL with the established entertainment empire of Time Warner. This merger was valued at $125 billion and was seen as a strategic move to deliver a wide range of entertainment content via the Internet. However, the merger faced challenges, including substantial financial losses and cultural clashes between the two companies. This question explores the nature of the merger, the challenges faced, and the strategies for making such mergers successful.

Question 1 [a] [i] [Explanation]

This question asks you to explain why AOL-Time Warner was described as a conglomerate. A conglomerate is a large corporation that consists of diverse and unrelated businesses. In this context, AOL-Time Warner combined different industries, such as film production and internet services, under one corporate umbrella.

Question 1 [a] [ii] [Explanation]

This question requires you to explain the challenges AOL-Time Warner may have faced when merging two different corporate cultures. Merging companies often encounter difficulties due to differences in organizational culture, values, and management styles.

Question 1 [b] [Explanation]

This question asks you to analyze the advantages and disadvantages of organizational growth through mergers and acquisitions, using AOL-Time Warner as a reference. Mergers and acquisitions can offer benefits such as increased market share and diversification, but they also come with potential drawbacks like cultural clashes and integration challenges.

Question 1 [c] [Explanation]

This question requires you to evaluate methods for making mergers more successful through effective change management. Change management involves strategies to facilitate the transition and integration of merging companies, addressing potential resistance and aligning goals.

Question 2 [Explained]

The Segway is a high-tech, environmentally-friendly scooter that was introduced in 2002. Before its launch, it was considered a revolutionary urban vehicle. However, it faced several challenges, particularly concerning health and safety issues. The Segway was initially tested in San Francisco, where it was later banned from sidewalks due to safety concerns. Despite these challenges, the Segway was launched on the Internet, and initial sales were promising. The case of the Segway is used to explore the stages of new product development, the high failure rate of new products, and the potential sources of finance for innovative products.

Question 2 [a] [Explanation]

This question asks you to describe the stages involved in developing a new product, using the Segway as an example. These stages typically include idea generation, market research, product development, and test marketing, among others. The focus is on understanding how a product like the Segway progresses from concept to market launch.

Question 2 [b] [i] [Explanation]

This question requires an explanation of why many new products fail during the early stages of their life cycles. Consider factors such as lack of customer recognition, inadequate market research, distribution challenges, and financial constraints that contribute to high failure rates.