Paper 1 - 2024 Pre-released Case Study

Rest of the case study and stimulus material are unseen and will consist of 800 - 1000 words, which you see on the actual day of the exam, which includes the pre-released statement.

All answers written on separate answer sheets (different from Paper 2)

Paper 1 Overview from the IB

Paper 1 is the same for SL and HL students. Three months prior to the examination the IB will release a statement with two elements. The first element will be a small number of topics that provide context to the case study. These topics will not be topics that are in the guide but ones that students are asked to research for approximately five hours. Topics in the pre-released statement will build on topics contained in the syllabus. The aim is to assess students’ knowledge around important contemporary business topics that could not have been anticipated when the guide was written.

The second element will be the first 200 words, approximately, of the case study itself. The release of this portion of the case study will provide additional context and will reduce the number of words to be read during the examination period. The aim of the paper is to assess students’ knowledge of the business management syllabus. The examination is based upon one case study, of approximately 800 to 1,000 words, that students do not see before the examination. Most questions will be qualitative, although some minor calculations could be part of the assessment.

Paper 1 Section A (20 marks)

Answer all structured questions based on the case study.
The maximum score = 20 marks
All 5 units of the syllabus can be assessed, except for HL only topics.

Section A Paper 1 - Example

Paper 1 Section B (10 mark question)

Answer 1 out of 2 extended response questions based on the case study.
The maximum score = 10 marks.
All 5 units of the syllabus can be assessed, excluding the HL only topics.

Section B Paper 1 - Example

Paper 1 Time Management

Approximately 2-3 minutes per mark

Time: 1 hour 30 min

30 marks

Section A = 20 marks

Suggested 40-50 min

Section B = 10 marks

Suggested 30-40 min

Total: 1 hour 30 min

10 Mark Question Mark Scheme (Paper 1 & 2)

10 Mark Question Mark Scheme Criteria - Paper 1 - 2.pdf

In-Class Paper 1 Exam Preparation

Day 1: Paper 1 Introduction of Pre-Released Case Study

Go over the format of a Paper 1 Exam
Read the Pre-Released Case Study (Additional Terminology and Case Study)
Look for key terms in the Case Study
Define all key terms
Extra: write at least two sentences for each key term . State what each of the terms mean, plus provide a contextualized example
Example: A publicly held company (as in Before One PLC) is a limited liability business organization owned by shareholders, such as the shareholders of BON. Shares in the company are openly traded on a public stock exchange such as the London Stock Exchange

Day 2: Paper 1 Connecting the Business Knowledge to the Case Study + Possible Exam Questions

Go through Business Management Syllabus (Units 1 - 5) and connect the Business tools, theories, and concepts to the case study and additional terminology, coming up with possible Final Exam Questions

Come up with at least 10 possible exam questions, using command terms and post them on the following link

https://docs.google.com/document/d/1dBZW60LzCCFNBvds9dEipbML8T4eG2KJtjA7UrQhA60/edit?usp=sharing

Watch some of the Music Festival Videos for Context

Day 3: Context - SWOT & STEEPLE

https://padlet.com/wongbryanchristopher/bon-swot-steeple-industry-analysis-7hlbx52yvc8sg4ph

Work in pairs to create a SWOT and STEEPLE and then create a mini presentation or poster on any one of the following:

Impact of COVID-19 on music festivals
Credit cards as a source of finance
Freelancers in the music industry
Greenwashing and business ethics
The impact of interest rates on businesses
Landfill sites and environmental sustainability
Solar power and environmental sustainability
Operations management and music festivals
Privately held vs Publicly held companies.

Discuss how the SWOT analysis can be used by the directors of BON to formulate a suitbale business strategy to maintain their competitiveness and profitability in running music festivals.

A STEEPLE analysis provides a comprehensive overview of the external factors that shape BON's operations and guides its strategic decision-making.

This can be useful for the 10-mark question in Section B, such as:

Evaluate the impact of changes in the external environment on BON’s competitiveness in the European music festivals industry. [10 marks]
Justify the importance of sustainability initiatives for BON. [10 marks]
With reference to BON, discuss the importance of ethical business objectives and corporate social responsibility (CSR). [10 marks]
Examine the impact of the external environment on the operations of BON. [10 marks]

Day 4: Investigating Stakeholders + Costs and Revenues for BON

Investigating Stakeholders

Regarding one of the issues above from Day 3, do a SLAP analysis

Stakeholder perspectives - not all stakeholder groups are equal, nor are they equally affected by business decisions and strategic choices.
Long-term versus short-term consequences - as is often the case in business, there may need to be some short term pains (sacrifices) for long term gains.
Advantages / Disadvantages - what are the overall advantages and disadvantages of the decision.
Priorities - this requires the student to prioritize the arguments presented in the written commentary. For example, if the student has presented more advantages or strengths than drawbacks or weaknesses, which of these has the greatest weighting, and why?

Costs and Revenues for Bon

In 2014, Glastonbury (one of Europe's largest music festivals) earned £37.3 million (USD47.25 million) in revenues. However, the costs associated with running the festival meant the organizers only earned £86,000 in profits (less than USD110,00). Needless to say, organising and running successful music festival requires effective financial management.

In groups of 2 or 3, investigate the costs and revenues for music festival businesses such as BON.

Split the costs into revenue expenditure and capital expenditure. Split the revenues into different categories of revenue streams.

Be prepared to share your findings with your teacher and the rest of the class.

Day 5-6: Mock Paper 1 - Groups and Open Note

We will work on the following Paper 1 Mock Exam in class. You may work in groups if you prefer and with your notes.

You should finish Section A in the first class and then Section B in the 2nd class. You only have 1 hour and 30 minutes total.

https://drive.google.com/file/d/1Uwhr6ofJGafJy_TvJn91r7xDbCeQ7fCp/view?usp=sharing

Day 7-8: Mock Paper 1 - Individual - Knowledge Check

We do a Paper 1 Mock Exam in class. This will be individual and timed, practicing as close to the Paper 1 conditions as possible.

You should finish Section A in the first class and then Section B in the 2nd class. You only have 1 hour and 30 minutes total.

Paper 1 Possible Exam Questions

Possible Paper 1 Exam Questions - In Class Groups

https://docs.google.com/document/d/1dBZW60LzCCFNBvds9dEipbML8T4eG2KJtjA7UrQhA60/edit?usp=sharing

SWOT, STEEPLE, Industry Analysis

https://padlet.com/wongbryanchristopher/bon-swot-steeple-industry-analysis-7hlbx52yvc8sg4ph

Paper 1 Pre-released Case Study PowerPoint Summary - Level 7

X M24 CSP PPT (Before One PLC) - International School of Panama

https://docs.google.com/presentation/d/1ORmzrIM6i_dGHYMSnmm_lnI-E_3Xe_g_gIH1lp02km4/edit?usp=sharing

Sorry, but the BBC videos only work in the UK

Key Terms - 2024 May CSP (BON PLC)

2024 May CSP (BON PLC) - Key Terms.pdf

https://drive.google.com/file/d/1R9oG2DGTGoEXGKiTN2BHZcfeZoEMRMDu/view?usp=sharing

Key Terms

average cost
bamboo plates and cutlery
challenge
company
contracts
COVID-19 pandemic
credit card
directors
employees
environmental sustainability
expansion
fee
finance
freelancer
greenwashing
interest rate
landfill site
line manager
location
music concert
music festivals
music genre
music performer
private limited company
public limited company
reservoir
solar power
temporary workers

Strengths and Weaknesses of Bon

Answers

2. Explain two possible strengths of BON. [4 marks]

Well established - BON has 23 year of experience and expertise in the European music festivals industry. This can give BON competitive advantages such as brand recognition and customer loyalty.
Established relationships with suppliers - Similarly, BON has contractual agreements with five farmers to use their farmland for music festivals. These contracts enable BON to have suitable and established venues for hosting their music events, reducing the uncertainty of finding suitable locations.
Limited liability - Being a a public limited company, BON's shareholders can benefit from limited liability. This helps to build investor confidence and can give BON access to much-needed finance to fund its expansion, such as share capital or loan capital (from banks and other financiers).
Accept any other valid strength, written in the context of the pre-release statement.

Mark as a 2 + 2

3. Explain two possible weaknesses of BON. [4 marks]

Over-reliance on temporary workers and freelancers for its music festivals, which can result in inconsistent quality of work, a lack of loyalty, challenges in maintaining a cohesive team, and barriers to creating a strong corporate culture.
Environmental sustainability - BON's directors regard environmental sustainability as a significant challenge. The music festival industry is known for generating huge amounts of waste, so addressing this growing issue may require additional resources and creative solutions for the directors.
The seasonal nature of the business - BON's music festival season runs from May to August, i.e., only 4 months a year. The seasonal nature of the industry can result in significant fluctuations in revenue (cash inflows) and expenditures (cash outflows). This can create liquidity and profitability concerns for BON.
Accept any other valid weakness, written in the context of the pre-release statement.

Mark as a 2 + 2

Unit 1: Exam-style Questions

Define the term private limited company (line 5). [2 marks]
State two features of a public limited company (line 5). [2 marks]
Define the term expansion (line 6). [2 marks]
Explain two reasons for BON choosing to convert from a private limited company to a public limited company (line 5). [4 marks]
Suggest two reasons why BON might want to expand (line 6). [4 marks]
In the context of BON, distinguish between corporate social responsibility (CSR) and sustainability. [4 marks]
Describe two types of economies of scale that BON could benefit from. [4 marks]
Explain one advantage and one disadvantage for BON pursuing an internal growth strategy. [4 marks]
Explain one advantage and one disadvantage of BON using inorganic growth. [4 marks]
Explain the interests of any two different stakeholders of BON. [4 marks]
Analyse two potential stakeholder conflicts for BON. [6 marks]
Discuss the importance of ethical objectives and corporate social responsibility (CSR) for BON. [10 marks]

Answer Key

Unit 2: Exam-style Questions

Define the term employees (line 6). [2 marks]
Explain two advantages for BON of employing temporary workers (lines 6 – 7) for its music festivals. [4 marks]
Explain the interests of permanent employees (line 6) as internal stakeholders of BON. [2 marks]
Explain two advantages for BON of employing temporary workers and freelancers (lines 6 – 7) for its music festivals. [4 marks]

Answer Key

Unit 3: Exam-style Questions

Define the term average costs. [2 marks]
Identify two revenue streams for BON. [2 marks]
Describe two suitable source of finance for BON to fund its music festivals. [4 marks]
Suggest two reasons why BON may have faced liquidity issues during the COVID-19 pandemic. [4 marks]
Distinguish between fixed and variable costs for BON. [4 marks]
Apart from share capital, suggest two suitable sources of finance for BON to fund its expansion (line 6). [6 marks]
Recommend appropriate sources of finance for BON to fund the expansion of its operations (line 6). [10 marks]

Answer Key

Unit 4: Exam-style Questions

Outline why brand recognition is important to BON operating in the music festivals industry. [2 marks]
Describe two elements of BON’s marketing mix for its running music festivals. [4 marks]
Suggest two promotional strategies for BON to increase ticket sales of its music festivals. [4 marks]
Suggest two appropriate promotional strategies that BON could use to increase its brand awareness. [6 marks]

Answer Key

Unit 5: Exam-style Questions

Outline the importance of location for BON (line 1). [2 marks]
Suggest why the location decision is strategically important to BON. [2 marks]
Explain two factors that affect the choice of location for BON. [4 marks]
Evaluate BON’s decision to outsource its operations. [10 marks]

Answer Key

Additional Exam-style Questions

Define the term environmental sustainability (line 10). [2 marks]
Explain two possible strengths of BON. [4 marks]
Explain two possible weaknesses of BON. [4 marks]
Explain one advantage and one disadvantage for BON of operating as a seasonal business (line 12). [4 marks]
Comment on why BON’s directors regard environmental sustainability as a significant challenge (lines 9 – 10). [4 marks]
Comment on one opportunity and one threat that BON faces by operating a seasonal business (line 12). [4 marks]
Examine the impact of changes in the external environment on the operations of BON. [10 marks]
Evaluate the impact of changes in the external environment on BON’s profitability. [10 marks]
Recommend whether BON should change its pricing or add a sixth music festival in order to raise the company’s profits. [10 marks]
Justify the importance of sustainability initiatives for BON’s competitiveness in the music festivals industry. [10 marks]
Recommend two strategies that BON could use to improve its environmental sustainability (line 10). [10 marks]
Recommend how BON can improve its corporate social responsibility (CSR) to mitigate accusations of greenwashing. [10 marks]

Answer Key

Videos for Context on Music Festivals

Video documentary – Music festivals (FT Film)

https://youtu.be/_9womMYx3yw

Watch this 20 minutes documentary from The Financial Times about the (risky) business of music festivals.

The video provides real context to the pre-release statement, with reference terms such as music performers (music artists), music genres, credit cards, and the COVID-19 pandemic.

Whilst watching this video, consider the threats and opportunities for Before One PLC (BON).

Video documentary – Why are Music festivals so expensive? (The Economist)

https://www.youtube.com/watch?v=PMfkO3Pv4VQ&ab_channel=TheEconomist

This 8 minute video discusses the high (and rising) costs of running music festivals. In the digital era, with music streaming services, artists and performers are increasingly relying on revenues from tours, concerts and festivals. For consumers, or music festival goers, it is more about the experience than the music itself. This has huge implication for marketers of music festival events.

How Glastonbury Festival is built in 26 Days

https://www.youtube.com/watch?v=6OmgU6opk3E

Sustianability and Music Festivals

Reading Festival revellers leave sea of rubbish and tents

https://youtu.be/sXdZUPnKkjM

Inside Rainbow Serpent Festival - Waste & Sustainability (Official)

https://youtu.be/nOrBWsIQfc0?feature=shared

BON Learning Activities

Learning Activity for BON

State 5 types of music genre ...

State 4 sustainable business practice relevant to the music festivals industry ...

State 3 external stakeholder groups of BON ...

State 2 drawbacks for BON of running a seasonal business ...

State 1 drawback of using solar power at music festivals ...

Possible answers

State 5 types of music genre ...

Country
Hip-hop
Jazz
Pop
Rap
Reggae
Rock

State 4 sustainable business practice relevant to the music festivals industry ...

Green transportation initiatives, e.g., attendees carpool, cycle, or walk to music festivals to reduce carbon emissions.
Waste reduction and recycling practices.
Energy efficiency and renewable energy, e.g., solar power.
Water conservation initiatives.
Corporate social responsibility initiatives to engage with local communities and stakeholders to minimize their environmental footprint and contribute to a more sustainable future.

State 3 external stakeholder groups of BON ...

Customers, i.e., attendees at music festivals.
Local communities surrounding the music festival venue.
Sponsors and partners (those that support and finance music festivals).
Music performers and artists.
Farmers who rent out their farmland to BON.
Government entities and regulatory agencies.

State 2 drawbacks for BON of running a seasonal business ...

Fluctuations in sales revenue throughout the year.
Staffing challenges, e.g., recruiting, hiring, training, and retaining temporary and seasonal employees.
Dependence of seasonal factors, e.g., weather and climate.

State 1 drawback of using solar power at music festivals ...

High set-up and capital expenditure costs.
Solar power is weather dependent, so reliability could be a challenge.

Mini Comprehension Quizes of Bon

In which year was BON established?
How much money does BON spend on cleaning up after each music festival?
In which year did BON convert from a private limited company (privately held company) to a public limited company (publicly held company)?
Why did BON convert from a private limited company (privately held company) to a public limited company (publicly held company)?
How many permanent employees does BON have?
How many farmers have contracts with BON for using their farmland to hold the music festivals?
What do BON’s directors regard as a significant challenge?
During which months do BON’s music festival season run?
On which days do BON's music festival runs?
For each of BON's music festivals, how many weeks does it take to set up and then to dismantle?

Answers

In which year was BON established? 2001
How much money does BON spend on cleaning up after each music festival? $250,000 (or $1.25m per year)
In which year did BON convert from a private limited company (privately held company) to a public limited company (publicly held company)? 2016
Why did BON convert from a private limited company (privately held company) to a public limited company (publicly held company)? To raise additional finance to fund its expansion
How many permanent employees does BON have? 60 (but there are also temporary staff)
How many farmers have contracts with BON for using their farmland to hold the music festivals? Five
What do BON’s directors regard as a significant challenge? Environmental sustainability
During which months do BON’s music festival season run? May to August
On which days do BON's music festival runs? From Friday to Sunday
For each of BON's music festivals, how many weeks does it take to set up and then to dismantle? Two weeks to set up and one week to dismantle

Possible Costs at BON

Staffing costs, for the 60 permanent employees, as well as for the temporary workers.
Costs of freelance service providers, such as photography and videography.
Music performers - The cost of booking festival acts will depend on agency fees and the individual music performer in question.
Site hire (paid to the five farmers in the case of BON).
Staging costs (for BON's 60 stages).
Utilities bills, including water charges for the on-site toilets.
Waste disposal during and after each music festival.
Signage, banners, and other printed materials.
Marketing (including BTL, ATL or TTL promotional campaigns).
Capital equipment costs, e.g., ticketing apps and hardware to accept credit card payments.
Equipment hire, e.g., public announcement (PA) systems and lighting for each stage.
Insurance, including public liability insurance.
Security costs.
Fees for licenses and permits.
Infrastructure for outdoor music events, e.g., car parking, camping sites, and scaffolding for stage set-up.

Possible Revenue streams for BON

Ticket sales for music concerts and festivals.
Camping charges to campers and glampers (who willing to pay for added-extras such as tents with power, Wi-Fi, air-conditioning, air-inflated beds, and private toilets).
Sponsorships deals.
Merchandise sales.
Rent paid by vendors, such as traders at the festivals selling food and beverages.
Government grants or subsidies for supporting local communities.