Business Plans & Descriptive Statistics: Sunset Sails Tours (DP IB Business Management)

Fig. 1: Confirmed Corporate Hotel Bookings in Quepos: August 2023 to January 2024
 

Fig. 2: Sunset Sails Tours: Trip Advisor Ratings - July 2023

Fig. 3: Purchase prices of nearly-new trimaran models - June 2023

Primary market research is the collection of original, first-hand data [1] using tools such as surveys, focus groups or observation [1].

• Define questions require you to provide a full definition that demonstrates good knowledge and understanding 
  

• Examples are a good way to do demonstrate good knowledge and understanding
  

• The model answer is awarded 2 marks because provides a clear definition of primary market research with examples

Sunsailor T

FL 479X

Bateux Sol Ranger V

DMAX 800

$390,000

$430,000

$450,000

$520,000

FL 479X

Bateux Sol Ranger V

$430,000

$450,000

• Advantages of calculating standard deviation include

  • It gives an accurate idea of how the data is distributed

  • It is less affected by data fluctuations than other statistical methods

• Disadvantages of calculating standard deviation include

  • It is more complex to calculate than other statistical methods

  • Standard deviation gives more weight to outlying data

• In this type of explain question you can be awarded one mark for each correct advantage or disadvantage identified
  

• A further two marks can be awarded if you apply both the advantage and disadvantage to the business. 

An advantage of using standard deviation is that it is a reliable and widely-used statistical tool that takes into account all of the relevant data [1 mark]. However standard deviation is complex to calculate and may need an expert to interpret correctly [1 mark].

• In this example, the candidate has been awarded 2 marks
  

• Whilst one valid advantage and one valid disadvantage have been provided, the response has not been applied to the business

An advantage of using standard deviation of confirmed hotel bookings is that it is a reliable and widely-used statistical tool that takes into account all of the relevant data over the five months of hotel bookings in which Sunset Sails Tours is interested  [1 mark + 1 mark]. However standard deviation is complex to calculate and may need an expert to interpret correctly which, as a small local business, Sunset Sails Tours is unlikely to employ [1 mark + 1 mark].

• In this improved response the candidate is awarded 4 marks
  

• One valid advantage and one valid disadvantage have been provided, and the response has been applied to the business

• Implications of producing a business plan include:

  • Detailed research related to a new market segment is required → initial research already compiled is unlikely to be sufficient

  • Effective business plans require time and expertise to construct → does this small, local business have this expertise or time to produce such a plan?

  • The business has a clear mission and growth objective → this is likely to help in developing a focused business plan

• This is a 'Level of response' answer where the examiner judges how well you have displayed the key skills of knowledge, application, analysis and judgement
  

• In particular your answer will need to show the following elements in order to gain top marks:

  • Appropriate business terms are used throughout

  • Business plans are explained clearly and knowledge applied purposefully

  • The case study material is used in a way that significantly strengthens the response

  • Chains of balanced analysis are evident throughout the response

  • Judgments are relevant and well substantiated

Overall, producing a detailed and thorough business plan would be likely to play an important role in persuading the bank to finance the purchase of a new trimaran. The lender will be able to analyse the financial performance of the business as well as the research it has conducted to determine whether it is in a position to pay back upwards of $350,000 and whether the idea has commercial merit. It is likely, though, that other factors such as Sunset Sails Tours' past credit history as well as how convincing their case is presented by the business owners will influence the bank's decision and the business plan should be seen as just one, albeit influential, part of the finance application.

• In this judgement extract, the candidate demonstrates clear knowledge and understanding of the business plan
  

• They have used the case study material effectively to support the judgement
  

• Judgement is balanced and reasoned, considering 'both sides' of the point and considering wider factors