This section of the IB Business Management syllabus examines the growth and evolution of business organizations. Almost all businesses strive to grow, whether this is measured in terms of sales revenue, profits, number of stores/outlets, number of employees, number of customers, or market share.

An example of business growth is Starbucks, which opened as a single coffee store in Seattle, USA in 1971. By the end of 2021, Starbucks had more than 33,800 stores in 80 countries. More than half of their outlets are located outside of the United States.

Businesses often have to evolve their practises and/or products in order to survive (see Box 1 below). For example, although Samsung is best known for its smartphones and consumer electronic products, the multinational conglomerate is also involved with weapons manufacturing, life insurance and theme park management. Samsung originally started trading as a grocery store!

The learning outcomes (or assessment objectives) for this section of the syllabus are:

• Internal and external economies and diseconomies of scale (AO2)

• The difference between internal and external growth (AO2)

• Reasons for businesses to grow (AO3)

• Reasons for businesses to stay small (AO3)

• External growth methods (AO3):

1. Mergers and acquisitions (M&As)

2. Takeovers

3. Joint ventures

4. Strategic alliances

5. Franchising

 Teacher only box

Note to teachers

Please be aware of the following changes to this section of the new syllabus (first exams M24):

• Economies and diseconomies of scale (AO2) in the previous syllabus has changed to Internal and external economies and diseconomies of scale (AO2). Hence, candidates will now need to know the difference between internal and external economies of scale.

• There is now a distinction between mergers and acquisitions (M&A) and takeovers. Candidates will need to distinguish between acquisitions and takeovers.

• As the CUEGIS concepts no longer feature in the new course, the following learning outcome has been removed: The role and impact of globalization on the growth and evolution of businesses (AO3).

• Finally, note that multinational companies (formerly placed within this unit) has been moved to its own separate section in the new Unit 1.6.

Please be aware of the above if/when using resources for the previous course, including past IB exam papers and mark schemes.