IB Business Paper 1 Questions with Detailed Solutions 2024/2025

1. Define business. - AnsA business is a decision-making organization involved in the production of goods and/or services to satisfy the needs and wants of customers. It combines human, capital, and financial resources to create such product. Radeki de Dovnic Manufacturing (RDM) is a family-owned business, founded in 1873. 2. Define management. - AnsManagement encompasses several roles: planning, commanding, controlling, coordinating, and organizing human and capital resources to achieve organizational objectives. Prior to 1949, the management at RDM had switched from producing coal-burning stoves to oilburning stoves as the former had reached the final stages of their product life cycle. 3. What do managers focus on? - AnsManagers focus on problem solving and decision-making so that goals can be achieved within a set time frame 4. Define product life cycle. - AnsThe product life cycle of a business measures sales over time. Both coal-burning stoves and oil-burning stoves had reached the end of their product life cycle, driving RDM to diversify and produce healthcare (medical) devices. 5. What are the phases in the product life cycle? - AnsA typical product life cycle has the following phase: introduction, growth, maturity/saturation, and decline. 6. Define private sector. - AnsA private sector is the section of the economy run by private individuals and firms, rather than by the public (government) sector. Firms in the private sector tend to strive to maximize their profit. RDM is a private sector business, owned by Radeki de Dovnic family members as private shareholders. 7. Define commercial enterprises. - AnsCommercial Enterprises are private sector businesses that operate primarily for profit. A core objective is to learn a return for their owners shareholders. RDM is run as a commercial business, although it was nationalized during the of Communism in Czechoslovakia. 8. Define nationalized. - AnsThe purchase of private sector possessions and enterprises by the government, thereby effectively converting them into state-owned assets. Following communist rule in Czechoslovakia, over 95% of private-sector commercial Enterprises were nationalized. 9. Define state-owned. - AnsThis refers to the government or the private sector ownership of assets and enterprises. In 1989 when communism in Czechoslovakia collapsed, many businesses (including RDM_ were privatized so were no longer state-owned. 10. Define privately-owned - AnsThe opposite of state-owned, this refers to the private (sector) ownership of assets and enterprises. Following the collapse of Communism of Czechoslovakia in 1989, many businesses (including RDM) became privately owned. 11. Define Chief Executive Officer (CEO) - AnsThe CEO of a company is the most senior person at the top of the organization hierarchy. the CEO is supported by a team of senior executives, which typically includes a CEO and CFO. The last three CEOs of RDM are Jan, Kristian, and Adriana Radeki de Dovnic. 12. Define demand. - AnsDemand refers to the total amount of a good or service purchased at a particular price. as the demand for kerosene stoves have been declining for many years, Adriana Radecki de Dovnic decided to add healthcare device