IB Business Management – Paper 1 Case Study Pack

Case Study: Before One PLC (BON)

Key Terms
For May 2024 examinations

Key terms appear in alphabetical order for ease of reference. Line numbers in the pre-release
statement are shown in brackets.

Average cost (lines 9-10)

This refers to the cost per unit of production. The average cost is derived from dividing the total cost
of output by the number of units of produced. As a business grows, the average cost will tend to fall
due to economies of scale.

Challenge (line 11)

A challenge refers to any internal or external factor that hinders the operations and profitability of an
organization. For example, internal challenges facing BON include environmental sustainability
practices (line 10). Examples of external challenges include competition from other organizers of
music festivals, technological breakdowns during music concerts and festivals, changes in
government regulations (such as eco-friendly guidelines), and adverse weather conditions.

Company (line 4)
A company is a business owned by shareholders who have limited liability. Companies, like BON,
are incorporated organizations, i.e., they are legally separate entities from their owners. This means
there is a divorce of ownership (the shareholders) and control (the directors) in the company.

Contracts (line 8)
Contracts are legally binding agreements between two parties, such as an employer and employee.
The legal agreement sets out specific terms and conditions established for work-related matters.
Contract exist between BON and its employees (temporary and permanent), the five farmers (to use
their farmland for the music festivals), and freelancers.

Cost (line 10)

Costs are items of expenditure by a business when producing goods and/or services. Examples for
BON include the costs of salaries for the events managers and administrative staff, rent paid to the
farmers, advertising expenses, and corporate taxes.

Directors (line 10)

Directors are senior executives in an organization who hold autonomous decision-making
responsibility and power. They are appointed to manage and oversee the operations of a company.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Key Terms
For May 2024 examinations

Employees (line 6)
A type of internal stakeholder, employees are the people who work for a business. They are
employed to carry out specific tasks or roles. They can have significant influence on the organization,
such as their level of loyalty, motivation, and productivity. BON hires both permanent and temporary
employees (line 6).

Environmental sustainability (line 11)

This is one of the three pillars in John Elkington’s triple bottom line (TBL), along with social and
economic sustainability. Environmental sustainability (or ecological sustainability) is the ability of a
business to maintain the use of its renewable and non-renewable resources for future generations.
This means production does not jeopardize the resources for successive generations. Depletion of
the earth’s scarce resources is not sustainable as they cannot be used indefinitely.

Expansion (line 6)
This refers to the growth of a business due to an increase in the size of the organization itself and/or
growth in the market. Expansion is usually measured by an increase in metrics such as sales
revenue, market share, or profits. The music festival industry has expanded substantially, especially
after the COVID-19 pandemic.

Fee (line 9)
These are payments made to a professional body in exchange for advice or services. Essentially,
this refers to the price a customer pays for receiving advisory services.

Finance (line 6)
Finance refers to the money required for business activities, such as funding music concerts and
festivals during the summer months, the day-to-day running of the business throughout the year,
and to fund its expansion. Finance for a business can come from internal sources (such as retained
profit) or external sources (such as share capital and bank loans).

Location (line 1)
This refers to the geographical position of a business, such as the farmland that BON hires to host
its music festivals (lines 8-9). The location decision is a crucial one, and will depend on both
quantitative and qualitative factors. The location of a business or its operations can have profound
implications on the profitability and survival of the organization.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Key Terms
For May 2024 examinations

Permanent employees (line 6)

These workers have an employment contract on a continual basis. There is no expiry date on the
employment contract, unless the workers resign or the employer terminates the contract due to
redundancies or dismissals.

Private limited company (line 5)

A private limited company (or privately held company) is an incorporated business owned by
shareholders who have limited liability. The shares of a private limited company cannot be bought
by or sold to the general public.

Public limited company (line 5)

A public limited company (or publicly held company) is an incorporated business owned by
shareholders who have limited liability but with the shares being openly traded on a public stock
exchange, such as the London Stock Exchange or the Euronext Paris.

Temporary workers (line 6)

In Charles Handy’s Shamrock Organization model, temporary workers are employees hired for a
limited period of time or until the completion of a project.
Note: The Shamrock Organization is HL only content, so will not be explicitly assessed in the final
external examination.

Other key terms from the pre-release statement

Note that the pre-release statement includes terminology that students are expected to have some
basic familiarity with. The IB recommends about 5 hours of preparation, so there is no expectation
for students to have comprehensive or exhaustive knowledge of these additional terms in the pre-
release statement.

Terms Link to Business Management content and concepts

1.3 Business objectives (Corporate Social Responsibility)

Bamboo plates and cutlery
Key concepts - Change, Ethics, and Sustainability

COVID-19 pandemic BMT - STEEPLE analysis

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Key Terms
For May 2024 examinations

Terms Link to Business Management content and concepts

3.2 Sources of finance

Credit card
3.7 Cash flow

2.1 Introduction to human resource management

Internal and external factors that influence human resource
Freelancer planning (for example, demographic change, change in labour
mobility, immigration, flexi-time, and the gig economy)
Key concept - Creativity

1.3 Business objectives (Corporate Social Responsibility)

Greenwashing 4.5 The seven Ps of the marketing mix
Key concepts - Ethics and Sustainability

3.2 Sources of finance

3.4 Final accounts
Interest rate
BMT - STEEPLE analysis
Key concept - Change

5.4 Location
Landfill site
Key concepts - Sustainability and Ethics

Line manager 2.2 Organizational structure

4.5 The seven Ps of the marketing mix

Music concert
Key concepts - Ethics, Change, Sustainability, and Creativity

4.2 Marketing planning (segmentation, targeting, and positioning)

Music genre 4.5 The seven Ps of the marketing mix
Key concepts - Creativity, Change, and Sustainability

4.2 The importance of having a unique selling point (USP)

Music performer 4.5 The seven Ps of the marketing mix – People
Key concepts - Creativity, Change, and Sustainability

5.4 Location
Reservoir
Key concepts - Sustainability and Ethics

Solar power 5.2 Operations methods

Key concepts - Change, Ethics, and Sustainability

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Key Terms
For May 2024 examinations

Bamboo plates and cutlery

These are eco-friendly dishware, tableware, and utensils made from sustainable bamboo. This
reduces the environmental impact of using plates and cutlery at BON’s music festivals compared to
traditional materials like plastic or other non-biodegradable compounds.

COVID-19 pandemic
The worst global health crisis in living memory caused by the novel coronavirus in late 2019,
impacting economies, healthcare systems, and people’s daily lives across the world. The pandemic
had devastating impacts on the whole music industry, and in particular music concerts and musical
festivals, due to lockdown and social distancing measures.

Credit card
This is a card payment system that allows qualifying customers to borrow funds from a financial
services provider (such as banks or credit card companies) for making purchases. The credit card
users repay the financiers at a later date, often with interest charges if there are late payments.
Credit card payment allows attendees at BON’s events to pay without using cash.

Freelancer
A freelance is a self-employed individual who provides services to their clients, rather than working
for an employer. Freelancers work on specific projects instead of long-term employment
commitments. Examples of freelancers in the music festivals industry include music performers,
music composers, choreographers, videographers, marketers, and publicists.

Greenwashing
This refers to misleading marketing tactics that falsely portray sustainable practices or describe
products to be more environmentally friendly than they actually are. Negative environmental impacts
from music festivals are mainly related to transportation, energy usage, littering, and waste.

Interest rate
This refers to the cost of borrowing money or the return on savings, expressed as a percentage
figure. The higher the interest rate, the higher the cost of borrowing, including those with credit card
debts, and the greater the incentive for saving money.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Key Terms
For May 2024 examinations

Landfill site
A landfill site is a designated area for the disposal of waste materials, which is compacted and buried
to order to minimize the environmental impacts of waste and litter.

Line manager
A line manager is the person directly above an employee on the next hierarchical level in an
organizational structure. Line managers, as shown in an organizational chart, supervise and manage
their subordinates on a day-to-day basis.

Music concert
This is a live music performance event where artists and bands perform for a live audience. Music
concerts are typically single events that feature one or a few supporting artists or bands who perform
at a single venue.

Music genre
This refers to the distinctive category or style of music, thereby defining its audience and appeal.
Music festivals enlist a range of music performers of different music genres, including popular music,
folk music, rock and roll, rap, metal, hip hop, rhythm and blues, reggae, and country.

Music festivals
These are large-scale music events featuring multiple musical performances across various music
genres, often spanning multiple days (line 12). Typically, music festivals attract diverse crowds of
attendees. The main difference between music festivals and music concerts is their scale and
duration. Music festivals are typically larger events spanning multiple days with multiple stages
featuring a wider variety of artists.

Music performer
A music performer is an individual musician or a band that performs music, in recorded form and/or
live performances.

Reservoir
This is a facility for storing large volumes of water, used for different reasons like drinking water,
generating hydroelectric power, and irrigation (agricultural purposes). Reservoirs are important
infrastructure for waste and water management at music festivals.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Key Terms
For May 2024 examinations

Solar power
This is energy or power generated from sunlight. The purpose or benefit of solar power is the
provision of clean and renewable energy, such as the supply of electricity for outdoor music events
during the summer months.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

This section of the Paper 1 Case Study Pack introduces additional key terms that may link well with
the pre-release statement. Definitions are provided along with application to BON and/or the music
festivals industry. The additional key terms are presented in alphabetical order for ease of access
and reference.

Note: Although some of these terms are from the HL only part of the course (such as recruitment),
application of any relevant tool, theory, or term from the syllabus will be awarded accordingly in the
exams. There is absolutely no requirement for any candidate to use HL tools and theories in the
Paper 1 examination.

Above the line (ATL) promotion

Above the line promotion refers to the use of mass media (such as television, magazines, national
newspapers, and radio) for advertising of a product or a service. Established over 20 years ago and
hosting 5 music festival events annually, BON is likely to utilize aspects of ATL promotion.

Advertising
Advertising is the main form of promotion, used to shape and develop brand awareness and foster
customer perceptions, knowledge, and attitudes towards a firm’s products or services, such as
BON’s music concerts and music festivals. Advertising communicates marketing messages in a
persuasive and/or informative way.

Agents
An agent is an independent person or company appointed and authorized to act on behalf of another
person in business and legal dealings. BON could work with agents to hire their temporary workers
(line 6) and music performers.

Bank loans
A bank loan is a fixed amount of money borrowed from a bank with regular fixed repayments,
including interest payments, over a defined period. Bank loans are generally offered by banks
against some security or collateral from the borrower. The COVID-19 pandemic is likely to have
caused major cash flow issues for BON, possibly necessitating external finance such as bank loans.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Below the line (BTL) promotion

Below the line promotion refers to the use of non-mass media promotional activities. Examples of
BTL promotion for BON include special discounts for large groups attending their concerts and music
festivals, social media marketing (SMM), and targeted search engine marketing.

Board of Directors
The Board of Directors (BOD) of a company refers to an elected group of senior executives to
represent the interest of shareholders. The BOD acts as the governing body that oversees the
operations and strategic direction of the company. The BOD meets at regular intervals (at board
meetings) to discuss the make decisions about company policies and practices, such as BON’s
expansion strategies (line 6).

Brand
This refers to a distinguishing name, symbol, image, or trademark of a product or organization, e.g.,
the BON brand name. As an intangible asset, the brand differentiates the product or organization
from competing products and firms in the market.

Brand awareness
This term refers to the extent to which a brand name is recognized or well-known to its potential
market audience. Brand leaders will have high brand awareness amongst their existing and potential
customers whereas less known brands will have low brand awareness. Given the company was
founded in 2001, there will be awareness of the BON brand amongst music festival goers.

Brand loyalty
This measures the degree to which customers consistently repurchase the same brand of a product
over time rather than buying from rival firms. Strong brand loyalty exists when customers are
committed to a certain brand and make repeat purchases time and time again, e.g., the same people
return to BON’s music concerts and festivals year after year. Marketing strategies designed to
cultivate loyal customers can give BON a competitive advantage in the industry.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Break-even
Break-even exists when a firm’s total sales revenue equals its total costs (TR = TC). This means the
business does not earn any profit nor does it make a loss. Break-even is a common objective for
new businesses, as they can then strive for profits. Rising costs can be a challenge for BON as its
break-even level of sales will increase.

Business functions
Business functions refer to the various types of work carried out in a business. In larger
organizations, people and work are often divided into departments which carry out certain tasks
related to that area, e.g., tasks relating to human resource functions, finance, production,
administration and so forth. These functions might be carried out most efficiently by organizing a
business into these departments (or functional areas).

Business owner
A business owner is the legal proprietor of a business organization. Business owners can be
individuals or groups of owners, such as shareholders of BON, with legal rights to the assets of the
organization, including any profits generated from its operations.

Business plan
A business plan is a written document detailing how an organization sets out to achieve its objectives
and the strategies to achieve these goals. It is prepared by the owner(s) and describes the market,
sales strategy, operations, financial forecasts, and staffing needs of the business. BON’s business
plan may include policies and procedures for dealing with its music events, such as human resource
needs, marketing strategies, and operations management strategies.

Capital expenditure
Capital expenditure is a use of finance, referring to the spending of a business on acquiring,
maintaining, and/or upgrading its non-current assets. Capital expenditure represents a financial
investment in the business, e.g., the purchase of capital equipment for BON’s head office.

Carbon emissions
This refers to the greenhouse gases emitted to the Earth’s atmosphere due to human actions and
business operations, such as power to run BON’s music festivals. The long-term impacts of this
include climate change and global warming.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Carbon footprint
Carbon footprint is a measure of the total greenhouse gas emissions caused by business activity. It
can be attributed to an individual, product, organization, or event (such as music festivals). It is
measured by the amount of carbon dioxide (CO2) produced through the burning of fossil fuels.

Career prospects
Also known as career opportunities, this refers to the likelihood or probability of a person’s future
success in a certain job or profession. Such opportunities within the workplace are an important
factor in staff recruitment and retention. The seasonal nature of BON’s business means that there
are few, if any career opportunities for temporary workers (line 6).

Cash flow
This refers to the movement of cash into (mostly from income and capital injections) and out of
(mostly purchases and expenses) a business. Effective cash flow management becomes vital for a
business such as BON that only has cash inflows for 4 months in the year (May to August).

Cash inflow
This refers to the movement of cash into an organization, such as from the sale of goods (such as
merchandise, food, and drinks sold at the music concerts and festival) and services (mainly ticket
sales). It can also come in the form of bank overdrafts, loans, and crowd-funding income.

Cash outflow
This refers to the movement of cash out of an organization, such as payment of wages (to temporary
workers and freelancers) and salaries (for full-time, permanent employees), rental payments to the
five farm owners (line 8), and taxes to the government.

Climate change
This refers to an increase in the average temperature of the earth driven by human-induced
emissions of greenhouse gases, and the resulting and extensive shifts in weather patterns across
the world. It is caused by events such as music festivals which generate huge volumes of waste.
Climate change also causes extreme weather conditions so can have major consequences for
outdoor events such as music festivals.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Communication
Communication refers to the transfer or exchange of information, ideas, or messages from one party
to another. Internal communication takes place with BON as an organization, e.g., employees
communicating with their line managers. External communication takes place between BON and
outside individuals and organizations, e.g., farm owners, suppliers, freelancers, and local
communities.

Competition
This refers to the rivalry within an industry, such as organiser of large music festivals like Sziget
(Hungary), Tomorrowland (Belgium), and Glastonbury (UK). Competitors may offer products of
better quality, more competitive prices, and/or have lower costs. BON may have little or no control
over the activities of its competitors as these are external stakeholders.

Competitive advantage
This refers to any edge (degree of superiority) that a firm has over its rivals, allowing it to generate
greater sales and/or profit margins. For example, brand loyalty and superior marketing campaigns
can give BON a competitive advantage over other organizers of music festivals.

Competitive price (Price competitiveness)

This pricing method entails BON setting the price of its tickets at the same or similar level as its main
competitors. Typically, this pricing method is used by businesses selling similar products, although
the services they provide can differ markedly.

Coordination
Coordination is one of the main functions of management. For BON, this refers to the process of
overseeing and managing all aspects of its music concerts and festivals. This can include the
management of human, capital, and financial resources in order to meet organizational goals. Line
managers are responsible for coordinating routine tasks and activities.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Corporate social responsibility (CSR)

CSR consists of responsible business behaviour towards the individuals and societies, e.g.,
consumers, suppliers, employees, and local communities. It also involves a business being
responsible for the natural environment in which it operates. Hence, CSR involves organizations like
BON monitoring and ensuring their compliance with the ethical standards of society, e.g., noise and
pollution levels at its music festivals.

Cost-plus pricing
Cost-plus is a pricing method that adds a mark-up to the cost of production of a product, ensuring
the firm earns a profit margin. It is important for BON to determine its average cost of production
(lines 9 – 10) in order to charge a suitable price (depending on its desired or target profit margin).

Creditors
Creditors are individuals or other businesses to whom money is owed. This is because BON may
have used trade credit from its suppliers (for credit purchases and outstanding bills) and/or loan
capital (such as bank overdrafts or bank loans).

Crowdfunding
This is a way of raising finance by asking a large number of individuals each for a small amount of
money to finance a new business or project. This is the opposite of the traditional method of
borrowing a large sum of money from a small number of lenders or financiers. Crowdfunding may
serve as a viable source of finance for BON to support relatively new and lesser-known music
performers.

Customer base
This means the total number of individuals who purchase goods and services from a business. The
size of the customer base is important because it is the customers who ultimately help the business
to earn money, grow, and do thrive. BON’s customer base consists of those who attend its music
festivals, irrespective of demographics such as age or income level.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Customer loyalty
This measures the degree to which customers consistently repurchase products from the same
business. Loyal customers also choose the goods and services of the business over its competitors.
Marketing strategies designed to cultivate loyal customers can give organizations a competitive
advantage. BON’s loyal customers are those who repeatedly attend its music festivals.

Customer satisfaction
Customer satisfaction is a measure of the degree of customer contentment with regards to indicators
such as the quality of the firm’s products and its services. Data used to measure customer
satisfaction includes customer satisfaction surveys and ratings or reviews on social media. Such
feedback can help BON to determine how best to improve or change its product offerings, including
music artists, performers, and bands at its music events. It could also include feedback about the
food and beverage offerings at its music festivals.

Economic sustainability
Economic sustainability in the context of the case study refers to the ability of BON to generate
sufficient revenue and manage costs effectively in the long term, while also contributing positively to
the economic well-being of its stakeholders, e.g., BON’s shareholders and the local communities in
which it operates. It is about effective financial planning and management.

Economies of scale
Economies of scale refers to the cost-saving benefits enjoyed by an organization due to its larger
scale of operation. It is shown by a fall in average cost of production following an increase in output.
For instance, hosting larger music festivals enables BON to spread fixed costs (such as the fee paid
to the five farmers) over a larger number of attendees and activities, leading to a decrease in average
cost per attendee.

Energy-efficient production methods

This refers to methods of lowering energy consumption by using less energy to achieve the same
amount of output. Examples include the use of solar power (line 50) and energy-efficient LED light
bulbs for BON’s music festivals.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Entrepreneurship
An entrepreneur bears the financial risks of starting and managing a new business or a commercial
venture, such as running music festivals in Europe. Entrepreneurs can develop new products or
service ideas or find a new way of offering an existing product. S/he organizes factors of production
to produce goods and/or services and assumes the risks and rewards of running the business.

Environmental issues
Environmental issues (in a STEEPLE analysis) refer to the ecological aspects of business activity
that can have positive as well as negative impacts on organizations. Environmental sustainability is
one of the three pillars in Elkington’s triple bottom line (along with social and economic sustainability)
referring to the ability of BON to maintain the use of its renewable and non-renewable resources for
future generations.

Ethical objectives
Ethical objectives are the moral principles that guide business decision-making. Ethics are the beliefs
of what society considers to be morally right or wrong. These goals can come from internal pressures
(such as the desire of management to implement ethical business behaviour, such as labour
practices at BON) or from external pressures (such as environmental sustainability practices). Ethical
objectives are shaped by societal norms and expectations of business practices that are deemed to
be fair to society as a whole.

External investors
External investors are stakeholders who provide external sources of finance to an organization.
Examples include financial lenders (such as banks) and business angels. External investors of BON
are interested in the company’s financial performance, especially its profitability and level of gearing.

External stakeholders
These are individuals or other organizations that are not part of the business but have a direct interest
in its operations. Examples for BON include customers (music festival attendees), suppliers (such
as the farmers who rent their land to BON), freelancers, competitors, financiers, local communities,
pressure groups, and the government.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Extrinsic motivation
This category of motivation occurs when people participate in a task or activity because of the
tangible benefits and rewards associated with doing so, such as pay, financial benefits, recognition,
and praise for music performers at BON’s festivals.

Financial performance
This refers to how well a business is performing financially as reflected in its final accounts (balance
sheet and profit and loss account). A ratio analysis is often conducted to assess the financial
performance of a business.

Financial motivation
This refers to the use of monetary payments to reward and/or motivate people in organizations.
Examples for BON include salaries and fringe benefits (for permanent employees), wages (for
temporary employees), commission (for agents), and possibly bonuses (for freelancers).

Fixed costs
Fixed costs are costs which do not change with the level of output or sales. Examples for BON
include advertising, insurance, management salaries, loan repayments, and rent (paid to the five
farm land owners).

Green credentials
Green credentials refer to the credibility of a business in terms of its ecological sustainability
(attempts to protect the planet), which will also have a direct impact on its economic sustainability.
For example, a business which actively engages with the three Rs (reduce, reuse, and recycle) is
likely to have better green credentials than firms that do not. The three Rs is a simple framework that
can be applied across the board to businesses of all sizes in all industries. Consumers and
businesses increasingly consider green credentials when deciding who they will do business with.
Therefore, it is increasingly challenging for organizations to ignore business ethics, sustainability
issues and considering the environmental impacts of their operations. Sustainability is of growing
importance to customers and governments around the world.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Health and safety training

This refers to specific training that ensures BON’s workers are able to carry out their jobs carefully
without risks to their physical wellbeing or harm to others. Managers have a responsibility to make
sure the business has a safe and healthy working environment, especially in job roles with high-risk
activities such as running outdoor music festivals. It also helps to improve labour productivity as staff
know what to do, in a safe and sensible manner. A lack of health and safety training will cost BON
money due to staff absences (lost productivity, sick pay, and even compensation claims).

Human resource management

HRM is about the development of people and overall workforce planning. It includes the recruitment,
selection, dismissal, training, and development of employees. The HR Manager is in charge of
developing the skills, experiences, and talents of the workforce. A human resources strategic plan
is a long-term plan to ensure that the labour force within the business has the correct skills and
expertise to carry out its role within the business so that it achieves the business objectives. This is
particularly important given the seasonal nature of BON in running its musical festival from May to
August (line 12) but also with permanent employees throughout the year (lines 6 – 7).

Informal communication
Informal communication is communication that takes place through social conversations and gossip,
rather than through official lines of communication. In the context of BON, this could take place
between the temporary employees, permanent staff, and freelancers.

Infrastructure
Infrastructure refers to the physical structures and facilities needed for the operations of a business.
Examples of infrastructure for BON include telecommunications, electricity (power networks), and
transportation access to its music festivals.

Internal stakeholders
These are individuals or other organizations that are part of the business, so have a direct interest
in its operations and affairs. Examples for BON include employees, managers, directors, and
shareholders.

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IB Business Management – Paper 1 Case Study Pack
Case Study: Before One PLC (BON)
Additional Key Terms
For May 2024 examinations

Internal sources of finance

This refers to the various methods by which an organization funds its operations without the use of
third-party (external) finance. Examples for BON could include the sale of tickets for its music
festivals, merchandise sales, and retained profits.

Intrinsic motivation
This category of motivation exists when people engage in a task or activity out of their own desire
(such as the enjoyment of being a music artist or performer), rather than due to extrinsic reasons
(such as pay, financial benefits, and praise).

Job production
Also known as customized production, this production method is used to make unique or one-off
products for the specific requirements of customers. Each music festival is an example of job
production, with its different set up artists, bands, and performers catering to audiences and fans of
different music genres.

Leadership
Leadership is the art of influencing, inspiring, and motivating others to accomplish a common goal.
Leadership plays a key role in an organization and involves setting a clear vision and direction for
others to follow. It is integral to the success of running music concerts and festivals, given the huge
scale of operations, staffing, and attendees at these events.

Liquidity
This refers to the ability of a business to meet its short-term debts and liabilities without causing
disruptions or incurring excessive costs. It involves BON monitoring the cash flow of the business to
ensure it can meet its current obligations, including bills, overdrafts, and other short-term liabilities.
Seasonality, in particular, can cause liquidity challenges for BON, given the absence of sales
revenues between the months of September and April.

Management
Management encompasses several roles which include planning, commanding, controlling,
coordinating, and organizing human and capital resources to achieve organizational objectives.
Managers at BON focus on problem solving and decision-making so that the company’s goals can
be achieved within a set time frame.

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Market development
Market development is the growth strategy in Ansoff’s matrix where a business sells its existing
products in new markets, i.e., the products are the same, but sold to a new group of customers. For
BON, this could include expanding its music festivals into new geographic markets or expanding its
portfolio of festivals by catering to different music genres or niche audiences.

Market gap (or market opportunity)

A gap in the market refers to a business opportunity whereby something that customers need is
identified but it is not currently available. This is likely to be a product that is completely unique or
addresses the existing needs of customers in a different market. For example, BON could host
festivals dedicated to niche music genres such as indie rock, electronic experimental, or folk, as well
as targeting festivals specific to families with young children. Identifying and catering for these gaps
in the market can lead to higher attendance and engagement at BON’s events.

Market growth
This refers to the increase in the size of a market or industry over time. It can be measured in several
ways including an increase in sales revenue or the number of customers in a particular market. It is
typically associated with an increase in the level of consumer spending in a given market, such as
the increase in attendees at music festivals in the post-COVID era.

Market research
Market research is the process of gathering and interpreting information regarding the thinking
patterns and buying habits of customers. For example, market research help can BON to gain
insights into the preferences, tastes, and behaviours of its target audience. By conducting surveys,
interviews, and focus groups, BON can gather feedback on the types of music, performers, and
experiences that attendees desire.

Marketing
Marketing is the management process of identifying, anticipating, and satisfying consumers’
requirements in a profitable way. It involves BON meeting the needs and desires of its customers by
focusing on ensuring that the product (music festivals), price, place (distribution channels), and
promotional methods are effective in encouraging sales of tickets to its music events.

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Marketing mix
The marketing mix describes the key components of marketing a physical good: product, price,
promotion, place, physical evidence, and process. All aspects of the marketing mix apply to BON for
the successful running of its music festivals.

Marketing strategy
This refers to the management process of formulating a firm’s marketing goals and activities to
increase sales and to achieve a sustainable competitive advantage. BON’s marketing strategy
should be drawn from market research and focus on all aspects of the marketing mix in order to
achieve its strategic goals.

Mass market
A mass market refers to an unsegmented market for a good or service, i.e., the product is aimed at
or appeals to all customers in the market, irrespective of population demographics. BON caters to a
broad audience of festival goers by organizing music festivals that appeal to a wide range of music
enthusiasts. Successful music festivals will attract large numbers of attendees, representing different
demographics, interests, and preferences.

Mission statement
This official declaration of a business refers to its overall goal and its purpose. Although BON’s
mission statement is not provided in the pre-release statement, it forms the foundation for setting the
aims and objectives of the business.

Motivation
Motivation is the desire, effort, and willingness to complete a task or to achieve something. It can be
extrinsic (such as pay and financial rewards for BON’s 60 permanent employees) or intrinsic (such
as pride, self-esteem, or altruism - the desire to help others). Many music festivals rely on volunteers,
including those with medical training who serve as first responders and coordinate emergency
services. These volunteers participate not only to assist others but also to enjoy the atmosphere
associated with outdoor music events.

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Non-financial motivational methods

Non-financial rewards (intangible rewards) are non-monetary methods used to reward and/or
motivate people. Examples of non-financial rewards for BON could include job satisfaction, job
enlargement, job enrichment, teamworking, and career advancement.

Objectives
Objectives are the short to medium term goals of an organization, such as survival, expansion,
revenue maximization, increased profits, and increased market share.

Operational objective (tactical objective)

This is a short-term organizational goal that is in line with the organization’s long-term goals. They
are specific targets for the day-to-day activities and tasks necessary to execute BON’s music
festivals efficiently, such as resource utilization. Departments or divisions of an organization tend to
set their own tactical objectives.

Operations management
Operations management (or operations) is concerned with using an organization’s resources
(labour, capital, and finance) to provide goods and/or services. This business includes BON
overseeing the planning, coordination, and execution of various activities and resources necessary
to organize and run successful music festivals.

Opportunities
In a SWOT analysis, opportunities refer to changes in the external business environment that create
optimistic prospects for a business. Opportunities for BON could include market growth in the post-
COVID era, adoption of digital technologies, and strategic partnerships (such as collaborating with
music artists, influencers, sponsors, local communities, and other key stakeholder groups).

Overheads (expenses)
Overheads are the ongoing expenses of running a business. They are not directly linked to the level
of production, or the service being provided, but are still vital to the firm’s operations. Examples
include the cost of office rents (for BON’s headquarters), salaries of administrative staff, office
equipment and supplies, legal fees, accounting fees, advertising, and utility bills.

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Pressure groups
Pressure groups are external stakeholder groups that exist to influence and persuade organizations
and governments to act in socially responsible ways. Such advocacy groups could include those
focused on environmental conservation and sustainability by exerting pressure on BON to adopt
eco-friendly practices and reduce its environmental impact.

Price
Price refers to the value of a good or service that is paid for by the customer. Price will usually cover
the costs of production, allowing the business to earn a profit margin. Ticket prices for BON’s music
festivals are likely to be high due to the peak summer season when demand is high.

Pricing methods
This refers to the pricing strategies that a business uses to sell its goods and/or services. Examples
of pricing methods for BON could include cost-plus, premium pricing, competitive pricing, and
dynamic pricing. Note: Although the latter two methods are both HL only, application of any relevant
tool, theory, or term from the syllabus will be awarded according in the exams.

Profit
Profit is the financial surplus from sales revenue after all production costs have been deducted. It is
a fundamental objective of most private sector organizations. BON’s shareholders will expect a
return on their investment so the company will need to be profitable. In its most simplistic form, profit
is calculated by using the formula: Profit = Sales revenue – Total costs.

Promotion
In the context of marketing, promotion is part of the marketing mix related to the methods of
communicating marketing messages to potential and existing customers, usually with the intention
of selling a firm’s products. Methods of promotion include the use of advertising, branding, sales
promotion, and public relations. Promotions and advertising play a crucial role in attracting
attendees, enhancing brand visibility, and influencing ticket sales for BON’s music festivals.

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Qualitative research
Qualitative research involves the collection of primary and/or secondary market research data and
information based on attitudes, beliefs, and opinions. It is about finding out what people think and
why they think it. Qualitative research may be important for BON in understanding the preferences,
motivations, and experiences of attendees at its music festivals industry in order to enhance
customer engagement in the future. However, the research can be subjective, so is open to a high
degree of interpretation.

Recruitment
Recruitment is the process of hiring suitable workers for job roles within an organization. It starts with
identifying the need for a new employee, followed by defining the job and the appropriate person for
it, attracting a number of suitable candidates, interviewing them, and finally selecting the best person
for the job. This applies to both BON’s temporary and permanent employees (line 6).

Recycling
Recycling means a physical good sold by a business, such as the bamboo plates and cutlery (line
40) which can be collected, broken down, processed, and reused to make new something new or
be used again. It helps to save resources in the long-term and is designed to work well with
sustainability, waste management systems, and circular business models.

Renewable energy sources

Renewable energy sources, such as solar power and wind energy, are natural resources that
replenish themselves through natural reproduction processes. They replace the resources that have
been depleted by usage in production and consumption. Using these resources can help BON to
improve its green credentials and reduce costs in the long term.

Revenue expenditure
Revenue expenditure refers to the money needed for the day-to-day running of a business, including
expenses such as wages, rent, marketing, insurance, and utility bills. Revenue expenditure is a key
reason why BON needs sufficient sources of finance.

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Revenue streams
This refers to the money or income coming into the business from a particular activity over a period
of time. Examples for BON could include ticket sales, merchandise, sponsorships, and revenues
from the sale of food and beverages sold at its music festivals.

Risks
A risk refers to a situation with unknown outcomes which could damage the financial health and
viability of a business. Some risks, with a high degree of uncertainty, can cause a financial loss and
possibly threaten the survival of an organization. Risks for BON included the COVID-19 pandemic
which caused liquidity problems for the company. Competition in the industry, green credentials, and
evolving societal expectations about sustainability are existing risks or challenges for BON.

Salaries
A salary is a fixed amount of money paid on a periodic basis, usually per month, to full-time or
permanent staff. Hence, salaries represent a fixed cost to an organization. Salaries create a sense
of security as employees know how much they will be paid each month (unlike wages or
commission), although do not necessarily create any incentive to work harder.

Sales
Sales (or sales revenue) refers to the income of a business received from customer purchases of
its goods and/or services. It is calculated by multiplying the selling price of the product by the quantity
sold. BON’s sales mainly come from selling tickets to its music festivals. Additional sources come
from the sale of merchandise.

Secondary market research

Also known as desk research, this refers to information collected from second-hand sources (which
already exist), e.g., government statistics, the news media, and independent market research
reports, all of which are easily accessible to the public. Secondary market research can offer insights
into consumer preferences and demographics related to music festivals. This information can help
BON to tailor its music festival offerings to enhance attendee satisfaction and build customer loyalty.

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Set-up-costs
These are the initial investment costs incurred by a business when establishing a new operation or
when launching a new product or service, such as a specific music concert or festival. Examples for
BON include costs associated with acquiring or leasing physical farm land (to host the music events)
and purchasing machinery, equipment, and other tangible assets needed for the music festivals.

Services
Services are intangible (non-tangible) products provided by organizations, such as BON’s music
concerts and festivals. Freelancers (like music performers, music composers, choreographers,
videographers, marketers, and publicists) and suppliers also provide their services to BON.

Share capital
Share capital is a source of finance, raised by selling shares in a company to shareholders (who
become part-owners of the company). Share capital is the most important source of finance for public
limited companies like BON.

Social media
Social media refers to any form of online platform (such as websites and applications) that enable
users to create and share interactive content or to participate in online social networking. Social
media platforms provide BON with direct channels to engage with its target audience, including
festival goers, music fans, and potential attendees, as well as possible sponsors and vendors.

Sources of finance
Sources of finance refers to the various methods by which an organization obtains its money. These
sources can be split into internal sources (such as retained profit) and external sources (such as
bank loans, leasing, and share capital raised on the stock exchange from the general public).

Sponsors
A sponsor is a person or organization that pays for or contributes to the costs of an event in return
for exclusive advertising exposure at events such as BON’s music festivals.

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Staff retention rate

The staff retention rate is the percentage of staff who remain employed by a business over a given
time period, usually one year. It is calculated by deducting the number of leavers from the total
number of employees in a year, expressed as a percentage of the workforce that has remained
within the business. A low retention rate implies low employee motivation and a lack of staff loyalty.
BON is likely to have a relatively high turnover rate (i.e., a low staff retention rate) due to the seasonal
nature of the business and the number of temporary employees hired its music festivals.

Stakeholders
Stakeholders are the individuals and/or other organizations that have a direct interest in the
operations and activities of the business in question. They include internal stakeholders (such as
employees, managers, directors, and shareholders) and external stakeholders (such as customers
or festival goers, suppliers, the local community, pressure groups, and the government).

Strategic objective
Strategic objectives are the long-term goals that guide the overall direction and growth of BON in the
music festivals industry. They involve broader decisions and initiatives made by the directors and
are aimed at positioning the organization for future success. BON’s strategic objectives could include
growth (expansion), market leadership, sustainability objectives, profit maximization, and improving
the corporate image of the organization.

Strategic plan
This is an organization’s proposal of its business strategy, outlining its strategic direction and
including the necessary resources to pursue the strategy. As a management tool, strategic planning
starts with strategic analysis (an examination of its current position in the market), followed by
strategic choice (the possible options through which the firm can pursue its strategy) and ending in
strategic implementation (deciding how to get to where the firm wants to be).

Strategic priority
Strategic priority refers to the ranking of strategic objectives by their level of importance to the
organization at any given time. Subsequently, operational (or tactical) planning and resource
allocation (including budgets) are based on a firm’s strategic priorities. A strategic priority for BON
could be expansion (line 6) in the European music festivals industry.

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Subcontractors
A subcontractor is a third-party individual or firm hired by the main contractor of a project to help
complete a project. The subcontractor specializes in performing and completing part of (or in some
cases all of) the responsibilities assigned to them, in a timely and cost-effective way. Subcontractors
can be hired by BON to handle various aspects of event logistics and setup of the 60 stages (line
15) at its music festivals.

Survival
Survival is a business objective for many organizations, especially during turbulent times, such as
the COVID-19 pandemic. It refers to the continuity of a business and its operations. Common
methods to survive include cost cutting (such as staff redundancies) and reducing prices to increase
sales revenue.

Sustainability
Sustainability is about using the planet’s resources in such a way that future generations are not
deprived of access to what the current and previous generations have enjoyed. In Elkington’s triple
bottom line model, sustainability is comprised of three pillars: economic, environmental (ecological)
and social sustainability, i.e., profits, planet, and people. Sustainability initiatives and practices are a
top strategic priority for BON.

Tertiary sector
The tertiary sector refers to business organizations that operate in industries involved in the provision
of services (intangible products). BON operates in the tertiary sector by providing services such as
music concerts and festivals to its target audience.

Threats
A threat refers to any external factor that hinders or risks the operations and profitability of an
organization. Examples include the challenges of competition in the music festivals industry,
technological breakdowns during BON’s music festivals, changes in government regulations,
adverse weather conditions, and the outbreak of infectious diseases such as the COVID-19
pandemic.

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Tourism
Tourism refers to people travelling to places outside of their normal environment for the purpose of
leisure and pleasure. It is a dynamic and competitive industry that caters for the changing needs and
desires of customers, with a specific focus on customer satisfaction, safety, and enjoyment. Tourism
in Europe will have a direct impact on BON’s financial success as this influences the number of
attendees at its music festivals.

Training
Training is the process of developing the knowledge and skills of workers in order to enhance their
confidence and competence in the workplace. The main forms of training are induction (for new staff
to acquaint themselves with the policies, processes and physical environment of the organization),
on-the-job (training in the normal workplace) and off-the-job (training that takes place away from the
normal place of work, such as at a training college).

Uncertainties
In business management, uncertainties refer to any situation with a lack of certainty or confidence
because the business cannot control or accurately predict the outcome of its actions. A high degree
of uncertainty can create many problems for BON as it is more difficult to make well-informed
decisions. For example, there are uncertainties about the direction of interest rates in Europe as well
as government regulations for sustainable initiatives at music festivals.

Unique selling point (USP)

Unique selling point (USP), also known as a unique selling proposition, refers to any aspect of a
product or organization that makes it stand out positively from others on the market. BON’s USP is
not clear but could revolve around offering a distinctive festival experience that sets it apart from
other music festivals in Europe. This could include unique themes based on different music genres,
creative stage designs with a unique appeal, interactive activities for overnight campers (line 15),
and immersive performances that create memorable moments for attendees.

Variable costs
Variable costs are costs which change with the level of output or sales. Examples of variable costs
include wages paid to the temporary employees, electricity, and other utility bills.

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Wages
Wages are a time-based payment system used to pay workers a fixed amount per time period.
Workers are typically compensated on an hourly, daily, or weekly basis. Workers receive this
payment for the work or services provided. For BON, wages are likely to be used to pay its temporary
workers during peak seasons.

Weakness
In a SWOT analysis, a weakness refers to any internal factor that negatively impacts the market
position of an organization. For BON, this could include its reliance on seasonal demand for its music
festivals (thereby causing potential liquidity issues during the rest of the year) as well as the
environmental issues and sustainability concerns associated with running its music festivals. Having
25,000 waste bins (lines 15 – 16) also suggests there are huge challenges for BON in terms clean-
up costs at an average cost of $250,000 per festival (lines 9 – 10).

Word of mouth
Word of mouth (WOM) is a form of unpaid promotion in which customers tell others about a business
or its products and services. WOM is increasingly important for all businesses, as happy and satisfied
customers can influence many others, especially in the age of social media and social networking.
WOM is a crucial aspect of the marketing for BON, playing a significant role in shaping its reputation,
attracting attendees, and fostering customer loyalty.

Workforce planning
Workforce planning is the continual process of assessing the current and future needs and priorities
of an organization’s personnel requirements. It involves recruitment, training, and appraisals.
Workforce planning is particularly important for seasonal businesses like BON in order to deliver
successful outdoor music events.

Working capital
Also referred to as net current assets, this represents the amount of finance available to a business
for its day-to-day operations. It is calculated using the formula: Working capital = Current assets –
Current liabilities. Not having enough working capital indicates strained liquidity while too much
would indicate wasted investment opportunities. The seasonal nature of BON’s business can create
working capital concerns, especially during September to April.

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Working conditions
This refers to the physical and non-physical environments in the workplace. It includes working time
(hours of work, rest breaks, and work schedules), pay and rewards, and the physical conditions in
the workplace (such as lighting, air conditioning, and rest areas for employees and music
performers). Working conditions have a direct impact on the productivity and wellbeing of employees.

Working relationships
This refers to the degree of affiliation and connections with other people in the workplace. Having a
good working relationship with others means the ability to get along with (or work with) other people
in the organization. Strong, professional, and meaningful working relationships are more likely to
improve labour productivity, motivation, and success for individuals and the organization. This is
more likely to apply to the 60 permanent employees but more challenge to foster for the temporary
workers and freelancers (lines 6 – 7).

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