BUSINESS MANAGEMENT

April 2021
SWOT ANALYSIS

1. Identify which factors are strengths (S), weaknesses (W), opportunities (O)
and threats for a firm (T). (4 marks)

 Poorly trained workers

 A rise in taxes and interest rates
 Demographic changes such as an ageing population which negatively
affecting future demand patterns
 Increasing globalization and access to new markets
 The firm’s stable financial position
 Increase in raw material costs
 Improvements in education resulting in increase in highly-skilled graduates
 High staff turnover: a large amount of employees leave the company due
to leadership problems.
 A dominant market position
 Strong brand loyalty
 Old obsolete machines leading to low productivity
 Fashion changes that make the organization’s products more desirable
 New competition
 A reputation for quality goods and services
 Financial capability to access new technology
 Vulnerability or closure of the main competitor
 New legislation that increases labor costs
 Poor company location with inadequate transport links
 Weak management due to politicking and power-struggles
 Rise of social media marketing that reduce advertising costs
 Downward economic trends with a possible recession next quarter.

(Question # 2 in the back page)

2. BOWLORAMA, adapted from IB Past Paper, May 2004

Bowlorama, owned by Pablo Santiago, is a firm that operates bowling alleys at

affordable prices. It is planning to open a branch in a central area of Mexico City.
To keep prices low, the aim is to keep the number of staff employed to a
minimum. The only staff required are those needed for security, safety and
cleaning. The bowling lanes are reserved using the Internet or computer
terminals located at the front entrance hall. Drinks and snacks are only available
using automated vending machines. Shoes are automatically cleaned.

Research shows that there are a large number of young people in Mexico City
with high levels of income and that there are not many bowling alleys. There are,
however, other entertainment centers in the city which are very popular with
residents and visitors. The area that Bowlorama has chosen is quite wealthy.
Unemployment is low and the standard of education is good. Pablo currently
operates another entertainment center and has a lot of contacts in the industry.
Pablo’s management style is very personable and people find it easy to talk to
him about their problems. However, he lacks skills in dealing with financial
matters and prefers to pay an accountant to make sure that everything is in
order.

(a) Prepare a SWOT analysis for Bowlorama. (6 marks)

(b) Evaluate whether Pablo Santiago should open the new branch in Mexico
City. You are expected to use consistent business terminology and all
relevant information in your response. (10 marks)