Business Objectives (DP IB Business Management: SL): Exam Questions

Sustainable Horizons Ltd (SHL) specialises in eco-friendly packaging solutions, producing biodegradable materials for food and beverage companies. Its mission is “To redefine packaging for a sustainable future.” SHL has set a strategic objective to grow its market share by 20% within three years while maintaining a profit margin of 15%.

To achieve this, SHL emphasises corporate social responsibility (CSR), working with ethical suppliers and investing in R&D to create innovative, recyclable products. However, these initiatives increase production costs, limiting SHL’s ability to compete with low-cost rivals offering similar products. Additionally, SHL has faced criticism for inconsistent quality in its biodegradable packaging, with some products failing to decompose as promised.

To address these challenges, SHL plans to automate parts of its manufacturing process, aiming to reduce costs by 10% within 18 months. While automation may improve efficiency, it requires significant upfront investment and risks layoffs, potentially undermining SHL’s ethical commitments.

Sustainable Horizons Ltd (SHL) specialises in eco-friendly packaging solutions, producing biodegradable materials for food and beverage companies. Its mission is “To redefine packaging for a sustainable future.” SHL has set a strategic objective to grow its market share by 20% within three years while maintaining a profit margin of 15%.

To achieve this, SHL emphasises corporate social responsibility (CSR), working with ethical suppliers and investing in R&D to create innovative, recyclable products. However, these initiatives increase production costs, limiting SHL’s ability to compete with low-cost rivals offering similar products. Additionally, SHL has faced criticism for inconsistent quality in its biodegradable packaging, with some products failing to decompose as promised.

To address these challenges, SHL plans to automate parts of its manufacturing process, aiming to reduce costs by 10% within 18 months. While automation may improve efficiency, it requires significant upfront investment and risks layoffs, potentially undermining SHL’s ethical commitments.

FlexiFit Ltd is a UK-based fitness clothing company founded in 2015 with the mission “To make high-quality fitness accessible to everyone.” The company’s vision is to become a global leader in sustainable sportswear by 2030.

FlexiFit currently operates in a competitive market dominated by larger brands. Its strategic objectives include increasing revenue by 25% over the next three years and achieving 10% market share in the UK sportswear sector. To achieve this, FlexiFit plans to launch a new eco-friendly product line made from recycled materials, emphasising its commitment to corporate social responsibility (CSR).

However, the company faces several challenges. The production costs for the sustainable product line are higher than its current range, which may impact profitability. Additionally, FlexiFit is relatively unknown compared to established brands, making it difficult to capture market share. To address this, FlexiFit has set a SMART objective to “double social media engagement within 12 months” as part of its marketing strategy.

FlexiFit Ltd is a UK-based fitness clothing company founded in 2015 with the mission “To make high-quality fitness accessible to everyone.” The company’s vision is to become a global leader in sustainable sportswear by 2030.

FlexiFit currently operates in a competitive market dominated by larger brands. Its strategic objectives include increasing revenue by 25% over the next three years and achieving 10% market share in the UK sportswear sector. To achieve this, FlexiFit plans to launch a new eco-friendly product line made from recycled materials, emphasising its commitment to corporate social responsibility (CSR).

However, the company faces several challenges. The production costs for the sustainable product line are higher than its current range, which may impact profitability. Additionally, FlexiFit is relatively unknown compared to established brands, making it difficult to capture market share. To address this, FlexiFit has set a SMART objective to “double social media engagement within 12 months” as part of its marketing strategy.

CleanCo Ltd is a start-up producing innovative water purification devices aimed at low-income communities in developing countries. Its mission is “To ensure access to clean drinking water for all.” The company’s strategic objective is to supply 500,000 devices annually within five years.

To achieve this, CleanCo focuses on ethical supply chain management and Corporate Social Responsibility (CSR), including partnerships with NGOs to distribute its products. However, CleanCo faces significant hurdles. Many of its customers cannot afford the devices without subsidies, and the company relies heavily on grants to keep prices affordable. Additionally, CleanCo has received criticism for delays in delivering devices due to supply chain inefficiencies.

To address these issues, CleanCo has set a SMART tactical objective to “reduce supply chain delays by 50% within 12 months” through improved logistics and supplier partnerships.

CleanCo Ltd is a start-up producing innovative water purification devices aimed at low-income communities in developing countries. Its mission is “To ensure access to clean drinking water for all.” The company’s strategic objective is to supply 500,000 devices annually within five years.

To achieve this, CleanCo focuses on ethical supply chain management and corporate social responsibility (CSR), including partnerships with NGOs to distribute its products. However, CleanCo faces significant hurdles. Many of its customers cannot afford the devices without subsidies, and the company relies heavily on grants to keep prices affordable. Additionally, CleanCo has received criticism for delays in delivering devices due to supply chain inefficiencies.

To address these issues, CleanCo has set a SMART tactical objective to “reduce supply chain delays by 50% within 12 months” through improved logistics and supplier partnerships.

Peak Toys Ltd. produces educational toys for children. In 2023, the company’s total revenue was $2,800,000, and its profit margin was 15%. The management is targeting a profit increase of $200,000 for 2024, aiming to achieve this by increasing sales while maintaining the same profit margin.

BakersDelight Ltd. operates a chain of bakeries offering premium baked goods. In 2023, the business reported revenue of $750,000, up from $600,000 in 2022. The company’s gross profit margin in 2023 was 40%, and its fixed costs were $200,000. BakersDelight plans to sell 50,000 units in 2024, maintaining the same selling price and profit margin.

EcoDelight Cafés Ltd is a rapidly expanding chain of environmentally conscious coffee shops focused on sustainability, innovation and ethical business practices. Founded five years ago by Sarah Patel, the business emerged to address a market gap for eco-friendly cafés. Sarah’s vision was inspired by her frustration with the coffee industry's lack of environmentally conscious options. Starting with a single café in her hometown, Sarah grew the business into a nationwide brand with 25 locations, with plans to open ten more in the coming year

A cornerstone of EcoDelight’s success is its strong unique selling proposition: promoting sustainability at every level of its operations. This includes sourcing coffee beans exclusively from fair-trade certified farms, using biodegradable packaging and incentivising customers to use reusable cups through a popular loyalty rewards programme. Additionally, the café interiors feature educational displays about green farming and recycling practices. These efforts resonate particularly with millennials, who make up 65% of EcoDelight’s customer base and have helped build a loyal following in a competitive market

Corporate social responsibility (CSR) is at the heart of EcoDelight’s mission. The company donates 2% of its annual profits to environmental causes, such as reforestation projects and ocean clean-up initiatives. Employees are encouraged to participate in these initiatives through paid volunteering days. These efforts have not only contributed to a positive brand image but have also fostered community engagement. A recent survey found that 75% of customers are aware of EcoDelight’s CSR activities, and 80% stated that these efforts influence their decision to choose the brand over competitors

Sarah’s leadership has played a key role in the company’s growth. In the early years, her autocratic style allowed for quick decision-making and clear direction during the start-up phase. However, as the business grew, Sarah adopted a more democratic and situational leadership style to manage a larger and more diverse team. Employees have shared mixed feedback on her leadership, with many appreciating her consultative approach, while others sometimes feel decisions take too long. Insights from staff feedback are detailed in Table 2

Looking ahead, Sarah is considering introducing a range of organic snacks, including granola bars and vegan pastries, to complement the coffee offerings. Preliminary sales forecasts (Table 1) suggest that these snacks could significantly boost revenue, but they also highlight potential challenges, such as demand variability and increased ingredient costs. To make informed decisions, Sarah is exploring a more structured approach to sales forecasting, recognising its importance for managing cash flow and inventory

As EcoDelight continues to grow, operational challenges have emerged. Maintaining service quality across all locations has been difficult, with staff turnover reaching 25%, significantly higher than the industry average of 15%. Qualitative feedback from employees reveals that while many value the company’s ethical focus, others feel overburdened due to rapid expansion. Sarah is now considering implementing more robust training programmes and recruitment strategies to ensure that EcoDelight’s high standards of service are upheld across all locations

Table 1: Sales forecast for organic snacks (next six months)

Table 2: Employee feedback on Sarah's leadership

GreenCycle Ltd is a private limited company that makes high-quality, eco-friendly bicycles. The business started ten years ago and has become popular with environmentally conscious customers. GreenCycle sells its bicycles online and through independent retailers. Its mission is to promote sustainable transport while making strong, reliable bicycles

The company wants to become a leader in the sustainable transport market. To achieve this, GreenCycle has set several goals. These include increasing sales by 20% each year for the next three years, launching two new bicycle models every year and improving customer satisfaction by 15% within two years. The company believes that these goals will help it grow while staying true to its commitment to sustainability

Recently, GreenCycle has seen more demand for its bicycles, especially from younger customers. To keep up, the company is thinking about investing in a new production line or automating parts of its production process. These changes would increase the number of bicycles it can make but would require large investments. For example, a new production line would cost $450,100 but could increase production by 30%. Automation would cost $320,800 and increase production by 20%. Management must decide which option is best for the company

GreenCycle is also using sales forecasts to decide if these investments are worth it. The forecasts show that sales could increase significantly over the next five years. However, some people in the company are unsure about the forecasts because they rely heavily on past sales and assumptions about future demand

The management team must make careful decisions. The company’s investors, employees and customers are all watching closely, as these changes could have a big impact on GreenCycle’s future

Table 1: Business objectives

Table 2: Production and investment data

Graph 1: GreenCycle Ltd sales revenue growth forecast (five years)