Growth & Evolution (DP IB Business Management: HL)

Exam Questions

44 mins14 questions
12 marks

Case Study

Quantum Electronics Ltd operates three semiconductor fabrication plants in Toulouse. The firm has recently expanded its production capacity and now achieves significant economies of scale.

Define the term 'economies of scale'.

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22 marks

Case Study

KoriFun Solutions Ltd, a toy manufacturer based in Seoul, has experienced decreasing average costs as a result of purchasing economies as its production volume has increased.

Define the term 'purchasing economies'.

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32 marks

Case Study

MetroBank PLC increased its workforce to 15,000 employees in 2024. The organisation now faces diseconomies of scale associated with this rapid growth.

State two types of diseconomies of scale.

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42 marks

Case Study

ArtisanBake Ltd operates three small bakeries in Dublin. The owner's main objective is satisficing, by maintaining close relationships with customers rather than expanding nationwide.

Define the term 'satisficing'.

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52 marks

Case Study

Global Mining Corporation has expanded its quarrying operations across North America and Asia in recent years, achieving rapid growth.

State two reasons why businesses aim to grow.

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62 marks

Case Study

Nordic Electronics AS recently underwent a horizontal integration with its main competitor in Stockholm to improve its market position.

Define the term 'horizontal integration'.

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72 marks

Case Study

WorldGym PLC uses franchising to expand its fitness centres globally. More than 4,700 gyms now operate across Europe under the WorldGym brand name.

State two advantages of franchising for growth.

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82 marks

Case Study

ASOS, an online fashion retailer, plans to grow by expanding into Asian markets to increase market share and profitability. The company believes its current size limits its ability to compete with larger rivals due to higher unit costs and reduced bargaining power with suppliers.

Explain one advantage for ASOS of pursuing growth.

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14 marks

Case Study

GreenTech Solar Solutions (GSS) is a medium-sized company that makes solar panels. Over the last five years, it has grown quickly because of the increasing demand for renewable energy products. GSS has reduced its costs by buying raw materials in bulk and using advanced machines to speed up production. However, as the company has grown, it has faced problems. Managers say that communication between departments has become slower and less clear, and customers have complained about delays in their orders.

GSS is now thinking about merging with EcoVolt, a smaller company that makes innovative solar storage systems. This merger would help GSS diversify its product range and offer new products to its customers. It could also allow GSS to enter new markets by using EcoVolt’s reputation and technology. However, GSS is worried about possible cultural clashes. EcoVolt’s casual, start-up style may not fit well with GSS’s more formal, structured way of working. Integrating the two companies could also take time and increase costs.

Explain one advantage and one disadvantage for GSS of merging with EcoVolt.

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24 marks

Case Study

GreenTech Solar Solutions (GSS) is a medium-sized company that makes solar panels. Over the last five years, it has grown quickly because of the increasing demand for renewable energy products. GSS has reduced its costs by buying raw materials in bulk and using advanced machines to speed up production. However, as the company has grown, it has faced problems. Managers say that communication between departments has become slower and less clear, and customers have complained about delays in their orders.

GSS is now thinking about merging with EcoVolt, a smaller company that makes innovative solar storage systems. This merger would help GSS diversify its product range and offer new products to its customers. It could also allow GSS to enter new markets by using EcoVolt’s reputation and technology. However, GSS is worried about possible cultural clashes. EcoVolt’s casual, start-up style may not fit well with GSS’s more formal, structured way of working. Integrating the two companies could also take time and increase costs.

Describe two challenges GSS may face as it continues to grow.

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34 marks

Case Study

Berry Bliss Bakery (BBB) is a small family-run business specialising in high-quality artisanal pastries and custom-made cakes. Located in a busy city centre, BBB has built a strong reputation for its personalised customer service and attention to detail. The business relies heavily on word-of-mouth recommendations, with most customers being loyal locals. Despite its success, BBB faces increasing competition from larger bakery chains offering similar products at lower prices. Emma and Raj, the owners, are considering how to grow their business.

One option is to open a second bakery in a nearby town, allowing them to serve new customers. However, this expansion would require significant investment in hiring staff and renting premises. The second option is to start selling their products online, enabling them to reach customers further afield. Selling online would involve costs for setting up a website and creating a delivery system. Emma favours opening a second location to grow their local brand, while Raj is cautious, worrying about potential cash flow problems and loss of quality control if they expand too quickly.

Explain one advantage and one disadvantage of opening a second location for Berry Bliss Bakery.

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46 marks

Case Study

Berry Bliss Bakery (BBB) is a small family-run business specialising in high-quality artisanal pastries and custom-made cakes. Located in a busy city centre, BBB has built a strong reputation for its personalised customer service and attention to detail. The business relies heavily on word-of-mouth recommendations, with most customers being loyal locals. Despite its success, BBB faces increasing competition from larger bakery chains offering similar products at lower prices. Emma and Raj, the owners, are considering how to grow their business.

One option is to open a second bakery in a nearby town, allowing them to serve new customers. However, this expansion would require significant investment in hiring staff and renting premises. The second option is to start selling their products online, enabling them to reach customers further afield. Selling online would involve costs for setting up a website and creating a delivery system. Emma favours opening a second location to grow their local brand, while Raj is cautious, worrying about potential cash flow problems and loss of quality control if they expand too quickly.

Analyse two benefits and one drawback of product diversification for Berry Bliss Bakery.

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56 marks

Case Study

TechTrek Innovations (TTI) is a fast-growing start-up that develops cutting-edge software for the healthcare industry. Its flagship product is a patient management system that helps hospitals track appointments, medical records, and billing. TTI has seen rapid success in its home market and is now looking for ways to expand globally. One option is a joint venture with MediCare Solutions, a large multinational healthcare provider. This partnership would give TTI access to MediCare’s extensive network of hospitals and knowledge of international healthcare systems.

However, there are risks. Some employees worry that working with a much larger company like MediCare could stifle TTI’s creativity and flexibility. Others are concerned about sharing TTI’s proprietary software code, fearing that MediCare might gain too much control. Despite these challenges, the founders of TTI see the partnership as a chance to scale up quickly and enter new markets without having to make a large upfront investment. MediCare, meanwhile, is keen to enhance its digital offerings by collaborating with TTI’s innovative team.

Analyse two benefits and one drawback of TechTrek Innovations using external growth to expand.

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64 marks

Case Study

TechTrek Innovations (TTI) is a fast-growing start-up that develops cutting-edge software for the healthcare industry. Its flagship product is a patient management system that helps hospitals track appointments, medical records, and billing. TTI has seen rapid success in its home market and is now looking for ways to expand globally. One option is a joint venture with MediCare Solutions, a large multinational healthcare provider. This partnership would give TTI access to MediCare’s extensive network of hospitals and knowledge of international healthcare systems.

However, there are risks. Some employees worry that working with a much larger company like MediCare could stifle TTI’s creativity and flexibility. Others are concerned about sharing TTI’s proprietary software code, fearing that MediCare might gain too much control. Despite these challenges, the founders of TTI see the partnership as a chance to scale up quickly and enter new markets without having to make a large upfront investment. MediCare, meanwhile, is keen to enhance its digital offerings by collaborating with TTI’s innovative team.

Describe two challengesTechTrek Innovations might face as it expands globally.

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