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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.

01 Hours 30 Minutes

100 Marks

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IB BUSINESS MANAGEMENT SL, Paper 2, November, 2005, TZ0, Solved Past Paper

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

Question 1 [Explained]

Wide Water plc is a global conglomerate involved in various industries, including household electrical goods, plastics, and airplane engines. In 1999, Bob Monkville became the chairman and CEO, initiating significant changes to ensure the company's survival and growth in the 21st century. These changes included focusing on markets where the company already had a strong position, exploring new markets with growth potential, and restructuring underperforming areas. The company also planned to reduce its workforce, flatten its organizational structure, draft ethical objectives, and enter new markets such as insurance and finance. Additionally, production of household electrical appliances would be relocated, and middle managers would be replaced to bring in fresh energy and dynamism.

Question 1 [a] [Explanation]

This question requires you to differentiate between objectives, strategies, and tactics within the context of Wide Water plc. Objectives refer to the broad goals the company aims to achieve, such as survival and growth. Strategies are the overarching plans or approaches designed to achieve these objectives, like focusing on leading markets and exploring growth opportunities. Tactics are the specific actions or steps taken to implement the strategies, such as selling off underperforming divisions or reducing the workforce. Understanding how these elements interrelate is crucial for comprehending the company's approach to achieving its goals.

Question 1 [b] [Explanation]

This question asks you to use SWOT analysis to evaluate the current position of Wide Water plc. SWOT analysis is a strategic planning tool used to identify and assess the internal strengths and weaknesses, as well as the external opportunities and threats, facing an organization. By applying SWOT analysis, you can gain insights into the company's competitive advantages, potential growth areas, and challenges that may impact its performance.

Question 1 [c] [Explanation]

This question requires you to explain three likely effects of globalization on Wide Water plc. Globalization refers to the increasing interconnectedness and interdependence of world economies, leading to the expansion of multinational corporations. It can present both opportunities and challenges for businesses, influencing factors such as market access, competition, and operational efficiency.

Question 1 [d] [Explanation]

This question asks you to explain two potential advantages for Wide Water plc of setting ethical objectives. Ethical objectives refer to goals that align with moral principles and values, guiding an organization's behavior and decision-making processes. Setting ethical objectives can have various benefits for a company, influencing its reputation, stakeholder relationships, and overall success.

Question 2 [Explained]

Gabad Designs Ltd, a Spanish-based company, is known for producing calendars, posters, and greeting cards. While the company has been successful in the Spanish market, it faces challenges due to intense competition and innovation in the calendars and posters markets, leading to reduced profit margins and declining sales. However, the greeting cards segment continues to experience rapid growth. The board of directors is considering two strategic options to sustain the company's growth:

Option 1: Launch a new product line of greeting cards that play a musical greeting. Test markets in southern Spain have shown promising results, indicating a likely product launch.
Option 2: Produce picture postcards for the tourist industry.

Cleo Segura, the marketing director, is confident that with effective marketing, Gabad Designs Ltd can maintain its target of 10% revenue growth per annum. Cleo is currently analyzing both primary and secondary data on consumer profiles and market segments to identify market opportunities.

Question 2 [a] [Explanation]

This question requires an explanation of why the market research conducted by Gabad Designs Ltd might be unreliable. Consider factors such as the sample size, representativeness, honesty of respondents, and the relevance and accuracy of the questions asked. Additionally, evaluate the reliability of secondary sources and potential biases in the research.