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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

Calculator NOT allowed

IB BUSINESS MANAGEMENT SL, Paper 2, May, 2004, TZ0, Solved Past Paper

Master the 2004 IB May for Paper 2 Business Management SL with examiner tailored solutions and comments for TZ0

Question 1 [Explained]

Bowlarama is a company that provides franchises for setting up bowling alleys, aiming to offer affordable bowling experiences for families. The business model emphasizes minimizing staff to reduce costs, relying heavily on automation and self-service options. This includes using slot machines for change and equipment, internet or machine-based lane booking, and vending machines for refreshments. The bowling alley will be located in a central area of Mexico City, which is characterized by a wealthy population, low unemployment, and a high standard of education. Pablo Santiago, who manages another leisure facility and has extensive contacts in the entertainment industry, is interested in purchasing a Bowlarama franchise. While he excels in management and interpersonal skills, he lacks financial management skills and relies on an accountant for financial matters.

Question 1 [a] [Explanation]

This question asks about the benefits to customers when the number of employed staff is kept to a minimum. Consider how reducing staff might affect the cost of services and the overall customer experience.

Question 1 [b] [Explanation]

This question requires an explanation of three advantages and disadvantages for Pablo Santiago in operating a franchise. Consider the implications of using an established brand, the support provided by the franchisor, and the potential limitations and costs associated with franchise agreements.

Question 1 [c] [Explanation]

This question asks you to prepare a SWOT analysis for the Bowlarama franchise opportunity and make a recommendation to Pablo Santiago about whether to purchase the franchise. Consider the strengths, weaknesses, opportunities, and threats associated with this business venture.

Question 2 [Explained]

Geofarms, an organic farming company, is considering two investment options to enhance their business operations. The first option is to purchase a second-hand van for home delivery services, which costs $$ 5350$ . The second option is to invest in a computer and set up a website for online orders, costing $$ 2200$ . The expected income from these investments over an eight-year period is presented in a table. The company needs to analyze these options to determine the payback period for each investment and evaluate the advantages and disadvantages of each approach.

Year	1	2	3	4	5	6	7	8	Total
Van	1000	1200	1200	1200	1400	1700	1800	2300	11800
Computer	600	900	1100	1100	1200	1300	1800	2300	10300

Question 2 [a] [Explanation]

This question requires you to calculate the payback period for two different investments: a van and a computer with a website. The payback period is the time it takes for an investment to generate enough cash flow to recover its initial cost. You will need to analyze the cash flows provided in the table to determine how long it will take for each investment to pay back its initial cost, rounded to the nearest month.

Question 2 [b] [Explanation]

This question asks you to discuss two advantages and two disadvantages of a delivery service compared to collection from the farm after ordering online. Consider the impact on customers, including convenience, cost, and the quality of the produce.