Practice Questions (DP IB Business Management): Revision Note
2-Mark Define questions
Example
Define the term multinational company (line 1) [2] |
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Suggested answer A multinational company (MNC) is a business that operates in multiple countries [1], often with headquarters in one country and factories, offices, or stores in others [1] |
Markscheme
One mark is awarded for a basic definition that conveys partial knowledge and understanding
Two marks are awarded for a full definition that conveys knowledge and understanding similar to the answer above
Examiner Tips and Tricks
Include two main statements for each definition to guarantee two marks
No application to the case studyis required
Further practice questions
Define the term diversification (line 14) [2]
Define the term external growth (line 7) [2]
Define the term portfolio (line 9) [2]
Define the term chain (of a business) (line 15) [2]
Define the term corporate social responsibility (line 21) [2]
Define the term social media influencer (line 11) [2]
For more tips, check out our guide to answering 2-mark questions
2-Mark Explain questions
Example
Explain one reason why Myt PLC might want to use computer-generated avatars in its advertising [2] |
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Suggested answer Myt PLC might use computer-generated avatars in its advertising to create engaging and innovative digital marketing campaigns that appeal to younger consumers [1]. Alongside Myt’s existing use of social media influencers, avatars could enhance its online presence and brand engagement [1] |
Markscheme
One mark is awarded for explaining why Myt PLC might want to use computer-generated avatars in its advertising
An additional mark is awarded for application to the case study
Examiner Tips and Tricks
The command word explain requires a point to be developed in context
You must apply your answer to the scenario
Further practice questions
Explain one reason why Myt PLC’s decision to acquire Lotssa Coffee (LC) might be considered diversification [2]
Explain one possible challenge Myt PLC could face when reducing caffeine and sugar levels in its drinks [2]
Explain one impact that Myt PLC’s acquisition of Lotssa Coffee (LC) could have on its brand positioning [2]
Explain one way in which Myt PLC’s decision to reduce sugar and caffeine in its drinks could affect its relationship with retailers [2]
Explain one reason why Myt PLC’s diversification into the healthy snacks market could be considered a risky strategy [2]
Explain one way in which Myt PLC’s investment in green factory modernisation could impact its supply chain [2]
For more tips, check out our guide to answering 2-mark questions
4-Mark Explain questions
Example
Explain one advantage and one disadvantage for Myt PLC of acquiring Lotssa Coffee and Honest Water [4] |
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Suggested answer One advantage of acquiring Lotssa Coffee and Honest Water is that it helps Myt PLC expand into new markets, so it is less reliant on selling soft drinks [1]. This could help the business attract health-conscious customers who prefer coffee or bottled water [1] One disadvantage is that running coffee shops and bottled water production is very different from making soft drinks, which could make it harder to manage [1]. Myt PLC might need to spend more money on training staff and changing operations, increasing costs [1] |
Markscheme
Two marks are awarded for a relevant advantage and a relevant disadvantage of acquiring Lotssa Coffee and Honest Water
An additional two marks are awarded for application of each advantage/disadvantage to the case study
Examiner Tips and Tricks
The command word explain requires points to be developed in context
You must apply your answer to the scenario
Further practice questions
Explain one advantage and one disadvantage of Myt PLC investing in computer-generated avatars for advertising [4]
Explain one advantage and one disadvantage for Myt PLC of reducing the sugar and caffeine levels in its drinks [4]
Explain one advantage and one disadvantage for Myt PLC of modernising its factories to become greener [4]
Explain one advantage and one disadvantage for Myt PLC of expanding into the healthy snacks market [4]
For more tips, check out our guide to answering 4-mark questions
4-Mark Describe questions
Example
Describe two possible risks to Myt PLC of entering the bottled water market [4] |
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Suggested answer One possible risk for Myt PLC when entering the bottled water market is strong competition from well-established brands such as Evian and Dasani [1]. Competing against these brands may require significant marketing and pricing strategies, increasing costs for Myt PLC [1] Another risk is negative environmental perception, as bottled water production is often criticised for excessive plastic waste and water usage [1]. This could harm Myt PLC’s brand reputation, especially if consumers and pressure groups question its commitment to sustainability [1] |
Markscheme
One mark is awarded for each relevant risk of entering the bottled water market explained
An additional two marks are awarded for application of each risk to the case study
Examiner Tips and Tricks
Use specific details from the case study, such as key competitors or current trends, to support your answer
Further practice questions
Describe two possible implications of government regulations on sugar and caffeine levels for Myt PLC [4]
Describe two possible benefits to Myt PLC of using social media influencers as part of its promotional strategy [4]
Describe two possible benefits to Myt PLC of expanding into the bottled water market [4]
Describe two challenges Myt PLC could face when entering the healthy snacks market [4]
For more tips, check out our guide to answering 4-mark questions
6-Mark Analyse questions
Example
Analyse two potential financial impacts of Myt PLC’s investment in modernising its factories to become greener [6] |
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Suggested answer One financial impact of modernising its factories is that Myt PLC will have high upfront costs for new equipment and technology [1]. Since Myt operates factories on six continents, making them greener could be very expensive. This means higher short-term costs, which could reduce profits if savings take time [1] Another impact is that greener factories could lower running costs by using less energy and producing less waste [1]. Since Myt makes many drinks, energy-efficient equipment could cut electricity and water bills. This could help Myt save a significant amount of money over time, leading to higher future profits [1] However, changing to greener production methods might slow things down, making production of soft drinks more expensive [1]. If new processes take longer or need special materials, costs may increase. This could make competitive pricing harder, affecting short-term profits. [1] |
Markscheme
One mark is awarded for each relevant explanation of a financial impact of Myt PLC’s investment in modernising its factories to become greener
An additional three marks are awarded for application of each financial impact to the case study
Examiner Tips and Tricks
Use specific details from the case study, such as the type of products the business produces or the processes it uses, to support your answer
Further practice questions
Analyse three ways in which Myt PLC’s corporate social responsibility (CSR) initiatives could affect its brand image and profitability [6]
Analyse two potential effects of government health regulations on Myt PLC’s ability to remain competitive [6]
Analyse two ways in which Myt PLC’s decision to modernise its factories could impact its operational efficiency [6]
Analyse one advantage and two disadvantages of Myt PLC reformulating its drinks to reduce sugar and caffeine [6]
For more tips, check out our guide to answering 6-mark questions
10-Mark Discuss questions
Example
Discuss whether Myt PLC’s corporate social responsibility (CSR) initiatives are likely to give the company a competitive advantage [10] |
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Suggested answer CSR means a business aims to act ethically towards all its stakeholders, including the environment, local communities, and its own workers. For Myt PLC, this involves “modernising and making its factories green” and “reducing caffeine and sugar levels” in drinks. As the case study highlights, a single can of some products can exceed an adult’s recommended daily sugar intake, so addressing health concerns is key One way CSR could give Myt a competitive advantage is by improving its image. Social factors, such as rising obesity and diabetes rates are concerning to many consumers, and they may prefer healthier beverages. By lowering sugar and caffeine, Myt could attract these buyers. This could lead to stronger sales and help Myt stand out from rivals. Also, “making factories green” can cut waste and lower energy costs, letting Myt invest more in product development or marketing However, there are challenges. Researching healthier recipes, as mentioned in the case study, may be costly, and updating factories can interrupt production. This might push up prices if Myt needs to cover higher costs, risking a loss of price-sensitive customers. Also, not everyone cares about CSR; some might still buy cheaper drinks regardless Overall, CSR can help Myt build brand loyalty and potentially gain market share. Its recent takeovers, like Lotssa Coffee and Honest Water, could also benefit from Myt’s enhanced reputation. Furthermore, the board aims to diversify into healthy snacks, which could reinforce Myt’s ethical image if they emphasise organic or low-sugar options, appealing to customers concerned about wellness. Yet the success of these measures depends on how well Myt controls costs and whether it can communicate its CSR effectively. Knowing more about the exact expense of “going green” and genuine consumer reactions would give a clearer view. If executed properly, CSR could be a powerful way for Myt to stand out, though careful planning is crucial to protect profits |
Markscheme
This is a 'Level of Response' question, where the examiner makes a judgement about how well the response demonstrates the following skills:
Knowledge and understanding: Clear focus on addressing the demands of the question
Application: Relevant information from the case study is integrated effectively to support the argument
Analysis: Relevant and accurate use of business management tools and theories
Evaluation: Arguments are substantiated and balanced, with an explanation of the limitations of the case study
Examiner Tips and Tricks
Always define the question’s key terms in the first paragraph
Make sure your answer is balanced, with advantages and disadvantages or both sides of the argument explored
Make repeated references to the case study to ensure your answer is in context
Make an overall judgement - in some cases this may be a decision, but weighing up the extent of the impact of a decision is usually required
Further practice questions
Discuss whether Myt PLC should enter the healthy snacks market [10]
Discuss whether Myt PLC’s decision to modernise and make its factories greener is a good long-term strategy [10]
Discuss the potential advantages and disadvantages to Myt PLC of acquiring Honest Water (HW) [10]
Discuss whether Myt PLC’s use of social media influencers as a key promotional strategy is sustainable in the long term [10]
Discuss whether Myt PLC’s decision to reduce sugar and caffeine in its drinks is the best strategy to remain competitive [10]
Discuss the extent to which diversification into bottled water and coffee will help Myt PLC remain competitive [10]
Discuss the extent to which Myt PLC’s decision to expand into the healthy snacks market is a suitable growth strategy [10]
For more tips, check out our guide to answering 10-mark questions
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