6.1 The Business Management Toolkit (DP IB Business Management)

A corporate strategy is the approach taken by a business to achieve its objectives.

The Ansoff Matrix is a strategic planning tool used to devise strategies for future growth.

True.

Ansoff's Matrix includes market penetration, product development, market development, and diversification.

Market penetration involves increasing sales of existing products to existing markets.

Product development involves selling new or improved products to existing customers.

Market Development involves selling existing products to new markets.

Diversification involves targeting new customers with new or redeveloped products.

The most risky growth strategy in the Ansoff Matrix is diversification.

STEEPLE Analysis is an analytical tool that examines external factors likely to impact a business.

True.

STEEPLE stands for Social, Technological, Economic, Environmental, Political, Legal, and Ethical.

True.

An example of a social factor in STEEPLE Analysis is social mobility.

The main purpose of STEEPLE Analysis is to support effective decision-making by understanding external factors.

False.

Climate change is an example of an environmental factor in STEEPLE Analysis.

True.

Inflation rates are an example of an economic factor in STEEPLE Analysis.

True.

The UK’s decision to leave the EU in 2016 is an example of both an economic and a political factor.

A product portfolio is the range of products offered by a business.

The BCG Matrix is a tool used by businesses to analyse their product portfolio and make strategic decisions.

False.

The BCG Matrix classifies products into four categories:

• Cash cow

• Star

• Question mark

• Dog

Cash Cows are products with a high market share in a low growth market.

A Star is a product with a high market share in a high growth market.

A Question Mark is a product with low market share in a high growth market.

A dog is a product with low market share in a low growth market.

The main purpose of the BCG Matrix is to help businesses allocate resources more effectively and develop marketing strategies.

Market share in the BCG Matrix indicates a product's relative competitiveness in the market.

Market growth in the BCG Matrix indicates the potential for expansion and profitability.

A business plan is a formal written document detailing the goals, strategies, and actions for a business.

True.

A business plan includes financial projections.

Market analysis is the examination of the market in which a business operates to understand its size, trends and competition.

The executive summary is a brief section at the beginning of a business plan that highlights its key points.

True.

A business plan should be updated regularly.

Competitive advantage is a unique characteristic that allows a business to outperform its competitors.

USP stands for Unique Selling Proposition.

True.

A SWOT analysis is usually part of a business plan.

A target market is a specific group of potential customers at which a business aims its products or services.

A marketing strategy is a plan to reach and persuade potential customers to buy a product or service.

A decision tree is a visual, quantitative method of tracing the outcomes of a decision so that the most profitable decision can be identified

True.

Decision trees use research-based estimates and probabilities to calculate likely outcomes.

The four key elements in a decision tree diagram are:

• Decision points

• Outcomes

• Probabilities

• Expected monetary value

False.

In a decision tree, points where there are different outcomes are represented by circles called nodes

A probability of 1 is a certain outcome in a decision tree diagram.

False.

In a decision tree, the outcome with the highest expected value is the most attractive option.

Formula.

False.

Decision trees do not take into account qualitative elements such as human resource impacts.

The mean is where all the numbers in a data set are added, and then divided by the amount of numbers.

The mode is the value that occurs most often in a set of data,

The standard deviation is a measure of the spread of numbers within a set of data.

Quartiles are the values that divide a list of numbers into quarters.

True.

Analysis of data using quartiles allows a business to see the distribution and spread of data.

False.

The top quartile is the highest 25% of a list of numbers

Infographics are easy to understand visual representations of data.

Pie charts illustrate how a whole is divided into different elements.

False.

Bar charts show data that are independent of each other.

The median is the middle value in a list of numbers.

A circular business model aims at eliminating waste and the continual use of resources.

The main goal of circular business models is to extend the lifecycle of products.

Closing the loop refers to recycling and reusing materials to create a closed system.

Product life extension is a strategy to prolong the life of a product through maintenance, repair and upgrades.

Remanufacturing means refurbishing used products to a like-new condition.

Upcycling is the process of transforming by-products, waste materials or unwanted products into new materials or products of better quality.

Sustainable sourcing involves integrating social, ethical and environmental performance factors into the process of selecting suppliers.

The aim of design for disassembly is to create products that can be easily taken apart at the end of their life for recycling or reuse.

Biomimicry is the use of nature-inspired design principles to create products and processes that mimic natural systems, resulting in greater sustainability.