Business Management Toolkit

Circular Business Models

Decision-making tool, These models explore how businesses create value for their customers and other stakeholder groups whilst also reducing the environmental impacts of their operations. There are five circular business models specified in the syllabus: (i) circular supply models, (ii) resource recovery models, (iii) product life extension models, (iv) sharing models, and (v) product service system models.

Porter's Generic Strategies (HL Only)

Decision-making tool, This commonly used tool helps managers to explore how a business can gain competitive advantages to help determine its strategic direction. These generic strategies comprise of: (i) cost leadership (producing at a lower cost of competitors), (ii) differentiation (providing products with a distinctive or unique selling point), and (iii) focus (selling specialized product aimed at specific market segments). Focus strategies are further categorised as (i) cost focus and (ii) differentiation focus.

Simple Linear Regression (HL Only)

Decision-making tool, This quantitative tool comprises of three techniques used to identify, describe, and/or predict the relationship between dependent and independent variables under investigation. The three techniques covered in the course are: (i) scatter diagrams, (ii) line of best fit, and (iii) correlation/extrapolation.

Descriptive Statistics

Decision-making tool, This quantitative tool is used to summarise a given set of data to support statistical and data analysis. The various techniques help to present a large amount of quantitative data in a simplified and more manageable format. There are eight techniques specified for this tool: (i) Mean average, (ii) modal average, (iii) median average, (iv), bar charts, (v) pie charts, (vi) infographics, (vii) quartiles, and (viii) standard deviation.

Contribution Analysis (HL Only)

Decision-making tool, This quantitative tool is used to support business decision-making by enabling manager to analyse and evaluate different cost and revenue situations. This tool comprises of three techniques in the syllabus: (i) make or buy analysis, (ii) contribution costing, and (iii) absorption costing.

Decision Trees

Decision-making tool, This tool is a graphical representation of showing the probable outcomes of a business decision, based on the likelihood of success or failure of such a decision. The diagram shows the various choices faced by a business, including estimates of the costs and benefits in order to determine the probable risks of a specific courses of action.

Ansoff's Matrix

Decision-making tool, framework of generic growth strategies for a business, based of providing new or existing products in new or existing markets. These four generic growth strategies are categorised as (i) market penetration, (ii) market development, (iii) product development, and (iv) diversification.

Critical Path Analysis (HL Only)

Planning Tool, This planning tool helps project managers to schedule and oversee large and complex projects to ensure efficient resource use and for the timely completion of the project. It maps out all the individual tasks or activities needed to complete the project so that realistic deadlines for a project can be set. The syllabus specifies HL students need to be able to: (i) complete and analyse a CP diagram. (ii) identify the CP from a diagram, and (iii) calculate the free and total float from a CPA diagram.

Gantt Charts (HL Only)

Planning Tool, This visual tool helps managers to plan and schedule different tasks or jobs within a particular project. It illustrates the tasks or activities, their duration, and dependencies in order to determine the shortest time required to complete the project and helps managers to schedule resources to complete each task and to keep the overall project on track to be completed on time.

Business Plan

Planning tool, This is an official guiding document that provides details of the organization's strategic goals and how the business intends to achieve these, with reference to the firm's human resources, finances, marketing, and operations management. It is also commonly used to secure loans from financial lenders as well as raising finance from investors.

Boston Consulting Group Matrix (BCG Matrix)

Situational tool & Decision-making tool, This tool allows manager to assess their organization's product portfolio based on measures of relative market share and market growth. It helps with long-term strategic planning and decision-making based on four categories of products: (i) question marks, (ii) stars, (iii) cash cows, and (iv) dogs.

STEEPLE Analysis

Situational tool, This framework considers factors in the external environment that affects a business. This tool refers to the social, technological, economic, environmental, political, legal and ethical aspects of the external environment. It provides an overview of or insight into these external factors that are largely beyond the control of the organization.

SWOT Analysis

Situational tool, This tool considers the strengths, weaknesses, opportunities and threats of a business at a specific point in time. Strengths and weaknesses are internal factors that influence the business, while opportunities and threats are external factors which the business has no direct control over.

Hofstede's Cultural Dimensions (HL Only)

Situational tool, This tool helps managers to understanding the cultural similarities and differences that exist between and across different countries. This helps them to determine more appropriate ways to conduct their operations given different national and international settings. The tool suggests that countries can be categorised into one of six different cultural dimensions: (i) power distance, (ii) individualism vs collectivism, (iii) masculinity vs femininity, (iv) uncertainty avoidance, (v) long-term vs short-term orientation, and (vi) indulgence vs restraint.

Force Field Analysis (HL Only)

Situational toolDecision-making tool, This visual and quantitative tool is used by managers to examine the forces for and against change to make more-informed business decisions. It is useful during the planning and decision making stages of corporate strategy and change management. It provides an overview, in an easy to understand format, by illustrating and adding statistical weights to each of the driving and restraining forces identified in the analysis.

Break-even Analysis

This analysis is an important tool for businesses to understand their cost and revenue structures in order determine the output level at which they will begin to earn a profit. This tool can help managers to make more informed decision. It is an important tool for evaluating the financial viability of new business plans, business ventures, and product launches.

Variance Analysis (HL Only)

This is a financial tool used by businesses to compare their actual financial performance with their budgeted (planned or expected) performance. By identifying these areas, businesses can take corrective actions to improve their financial performance, such as adjusting their pricing, reducing costs, or changing aspects of their operations.

Stakeholder Analysis

This is the process of identifying and assessing the interests, influence, and power of different individuals, groups, or organizations that are affected by or have an impact on a business or project. It is also about developing strategies to manage these relationships effectively to achieve organizational goals.

Production Planning: Productivity (HL Only)

This planning is a critical management tool that helps businesses to optimize their production processes, increase efficiency, and reduce production costs. It is about managing resources more efficiently and reducing or eliminating waste. This topic also covers the local and global supply chain process, stock control, capacity utilization, and various measures of productivity.

Motivation & Demotivation Theory

This section of the syllabus is concerned with understanding the factors that influence an individual's level of motivation or demotivation in the workplace. The theories aim to explain why people behave the way they do and what motivates them to take action.

Economies of Scale

This theory refers to the cost advantages that a business can achieve by increasing the scale (size) of its operations. This is because fixed costs can be spread over a larger number of units of output, resulting in lower average costs. This is important as it leads to competitive cost advantages and improved profitability.

Sales Forecasting (HL Only)

This tool is about the process of estimating future sales and revenue for a business over a specific period of time. It helps organizations to plan their operations, manage their resources effectively, and make more informed business decisions. This topic is particular well aligned with simple linear regression in the Business Management Toolkit (BMT).