Practise explaining and applying convenience, quota, random and stratified sampling methods for IB Business Management SL.
In another development, MM wants to enter the rapidly growing lithium market. MM has rejected the idea of buying an existing lithium producer and is considering two options: opening its own lithium mine in Australia or entering a joint venture with a lithium mining company. Option 1: Open a lithium mine in Australia MM has identified a site in Australia, and the Australian government, which is keen to develop its country’s lithium mining industry, will approve a mining license for it. Development of the mine would take three years and cost $100 million. Table 2 shows the forecasted net returns for the first six years.
The fastest growing section of the mining industry is the extraction of lithium. Major producers of lithium include Australia, Chile and Argentina. Lithium and its compounds have several industrial applications, including lithium batteries, heat-resistant glass and ceramics, lubricants, and additives for iron, steel and aluminium production. The current rapid growth in the demand for lithium has been caused by the increased use of lithium-ion batteries, which are essential for electric vehicles, smartphones and other electronic equipment. MM ’s board of directors sees opportunities for major growth in this sector of the industry. However, the individual board members disagree about whether to seek a license for a new lithium mine (probably in Australia), take over an existing lithium producer (possibly in Chile), or enter a joint venture (possibly with a Canadian lithium producer).
MM is reviewing its hotel and mining operations.
To understand customer opinions about its hotels, MM will distribute questionnaires at two of its hotels and use a convenience sampling method. MM is also considering introducing flexitime for hotel employees.
For its gold mining operations, MM wants to increase its market share worldwide to 1 % by 2030. In 2020, MM produced 17 tonnes of the global production of 3200 tonnes.
In another development, MM wants to enter the rapidly growing lithium market. MM has rejected the idea of buying an existing lithium producer and is considering two options: opening its own lithium mine in Australia or entering a joint venture with a lithium mining company.
Option 1: Open a lithium mine in Australia
MM has identified a site in Australia, and the Australian government, which is keen to develop its country's lithium mining industry, will approve a mining license for it. Development of the mine would take three years and cost million. Table 2 shows the forecasted net returns for the first six years.
Table 2: Forecasted net returns for the lithium mine (in millions of \$)
MM will sell the lithium to battery manufacturers in China, a market familiar to the Australian mining industry. Transport costs would be high. Environmental pressure groups oppose the mine because of the water and air pollution they think it would create.
Option 2: A joint venture with CanLith (CL)
CL, a lithium mining company, is seeking expansion with a new mine and needs finance. A joint venture with MM would bring MM's expertise and corporate values to the expansion. MM and CL would have equal ownership of the new mine and jointly manage it. CL would appoint a board of directors. However, CL has attracted bad publicity because of its poor environmental record, and local people oppose the new mine. Information on the joint venture is shown in Table 3.
Table 3: Information on setting up the joint venture
Explain one advantage and one disadvantage for M M of using convenience sampling for its market research.