Practise identifying traditional business functions and explaining how human, physical, and financial resources combine in business activity for IB Business Management SL.
Buzza
Jo and Demi Straus established Buzza, a partnership, in 1999. Buzza manufactures women's fashion accessories, such as handbags and scarves. Jo, a gifted designer, directs the design team. Demi, a business graduate, organized the business by function. She manages most of those functions.
In 2012, they converted Buzza to a private limited company to help obtain finance for the business's expansion. Jo and Demi retained 60 % ownership between them.
Because of the brand's reputation, Buzza can recruit creative graduates from design universities. Graduates receive 12-month contracts, which are renewed only if Buzza accepts their designs. Buzza tells graduates that, generally, only half of all contracts are renewed. The average age in the design team is 26 . Labour turnover in the design team is much higher than in similar exclusive brands.
Wealthy consumers interested in the latest fashions find Buzza a highly desirable and exclusive brand. Only approved retail outlets sell Buzza products. New collections are produced four times a year. At the end of each season, retailers return unsold products to Buzza. Last year, these unsold products were valued at $15 million. At present, Buzza sends returned products to an incinerator plant to be destroyed. A recent television documentary revealed that Buzza incinerates perfectly good products, which led to damaging social media comments.
In response to the negative publicity, Jo and Demi are considering two options:
Option 1: Sell surplus products at greatly reduced prices on its website.
Option 2: Break down returned products to recover raw materials for re-use in future products. This process of breaking down returned products will be time consuming and costly.
State three of Buzza's main business functions.
Possible answers include:
- human resources
- finance (and accounts)
- marketing
- operations
- management
Candidates must use the traditional business functions, such as those noted above (or others which are traditionally listed in textbooks). Do not accept terms inspired by the stimulus itself ( R&D, for example).
For [2], candidates must state 3 (or more) of the above.
For [1], candidates must state 2 of the above.
If a candidate states only one business function, award [0].