Practice 4.3 Sales forecasting (HL only) with authentic IB Business Management exam questions for both SL and HL students. This question bank mirrors Paper 1, 2, 3 structure, covering key topics like systems and structures, human behavior and interaction, and sustainability and ethics. Get instant solutions, detailed explanations, and build exam confidence with questions in the style of IB examiners.
Paper
Level
Question 1
HLPaper 3
LuminaCare
Resource 1 – Company profile and financial context
LuminaCare is a Ghana-based, for-profit social enterprise that manufactures solar-powered medical devices for rural clinics and maternal health centers across Sub-Saharan Africa. Its flagship product is a solar fetal heart monitor, which allows midwives to detect complications during pregnancy without relying on grid electricity. The company raised seed capital from impact investors but has now reached an inflection point: demand has grown by 300%, and LuminaCare must decide whether to pursue a $2.5M Series A equity round or take on $1.2M in concessional debt from a development bank.
Resource 2 – CFO’s internal memo (Finance)
“Our burn rate is steady, but we’ve reached our credit limit with suppliers. We operate on 90-day payment terms with clinics, so cash flow is always tight. Series A equity gives us the scale to meet demand and build a second facility—but would dilute founder control and introduce board-level oversight. The concessional loan is low-interest and non-dilutive but comes with covenants: quarterly EBITDA targets, strict capex limits, and donor-style reporting. Any miss could trigger loan restructuring or early repayment.”
Resource 3 – HR performance dashboard (Q1–Q2 2025)
| Metric | Value |
|---|---|
| Staff turnover (last 6 months) | 22% |
| Time to fill technical roles | 49 days (↑ 24%) |
| % of roles with formal job descriptions | 58% |
| Managerial span of control | Avg. 12 direct reports |
| Avg. team engagement score | 67/100 (↓ from 78) |
| The head of HR notes that burnout and unclear career paths are leading to attrition, especially among product engineers and field deployment staff. |
Resource 4 – Marketing team proposal
“Clinics love our mission—but most have no idea who we are until we show up at trade shows. We need to invest in inbound marketing, including a multilingual website, CRM tools, and a referral rewards program for midwives. More crucially, we’re perceived as a donor-funded nonprofit, not a serious tech company. To attract hospital procurement officers and larger buyers, we must reposition the brand to emphasize product quality, not just affordability and ethics.”
Resource 5 – Email thread: CEO to CFO and Marketing Lead
Resource 6 – Feedback from key field partners
“We rely on LuminaCare’s devices, but their response time for repairs has worsened.” “Sometimes we get different pricing from different reps. There’s no standard process.” “I love the mission—but our procurement officer wants a brand that feels serious. A logo change isn’t enough.”
1.[2]
With reference to Resource 3, describe one HR issue that may be impacting LuminaCare’s ability to scale sustainably.
2.[6]
Explain one financial challenge and one marketing challenge LuminaCare may face if it accepts the concessional loan.
3.[17]
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for LuminaCare over the next five years.
Question 2
HLPaper 2
RadiantSkin Ltd.
RadiantSkin Ltd. is a UK-based skincare brand that sells eco-conscious beauty products through both retail and e-commerce channels. The company launched a new product line in early 2024 and used a promotional mix focused on social media campaigns, influencer partnerships, and limited-time bundle pricing. The marketing team forecasted strong Q2 sales but actual sales figures fell short.
RadiantSkin Ltd. is now reviewing its budgeting process and sales forecasts, while the finance team prepares the company’s final accounts and evaluates its profitability and liquidity ratios.
Table 1: Budgeted vs Actual Figures – Q2 2024
| Item | Budgeted (£) | Actual (£) |
|---|---|---|
| Sales revenue | 1,000,000 | 880,000 |
| Cost of goods sold | 400,000 | 420,000 |
| Expenses (incl. promo) | 300,000 | 350,000 |
| Net profit | 300,000 | 110,000 |
Table 2: Balance Sheet Extract – as at 30 June 2024
| Item | Amount (£) |
|---|---|
| Current assets | 220,000 |
| Current liabilities | 160,000 |
| Capital employed | 950,000 |
1.[2]
Suggest one possible reason why RadiantSkin’s sales forecasts may have been inaccurate
2.[2]
Suggest one adjustment to the marketing mix that RadiantSkin Ltd. could make to improve financial outcomes in future quarters.
Question 3
HLPaper 3
Global Solar Solutions (GSS)
Resource 1 – Background of the social enterprise
Three years ago, electrical engineer and entrepreneur Nadira Khan founded Global Solar Solutions (GSS) as a social enterprise in Morocco. Her goal was to provide affordable, modular solar lighting kits to off-grid rural communities. These kits, manufactured at GSS’s urban facility, include rechargeable LED lights and mobile charging ports. GSS reinvests 100% of profits into R&D and local hiring.
GSS operates in partnership with local NGOs and community councils. Its workforce includes 40 technicians and 20 community trainers who educate households about solar usage and maintenance. GSS applies lean production, Kaizen, and maintains a strong internal emphasis on quality control and after-sales support.
Resource 2 – Recent internal report on workforce issues
"High staff turnover and trainer burnout have increased over the past 12 months. Trainers, who work in remote villages for weeks at a time, report fatigue and a lack of recognition. Some have requested additional health support and clearer promotion opportunities."
The HR department suggested non-financial incentives such as increased job rotation and monthly feedback sessions but reported mixed engagement.
Resource 3 – Email from the Director of Rural Development (DRD)
To: nadira.khan@GSS.org
Subject: Expansion proposal
Dear Ms. Khan,
We are impressed by GSS’s impact. The Ministry would like to propose a contract to expand the solar program to 80,000 homes across North and West Africa over five years. Your team would need to train local technicians and build capacity in three new countries. Please note, the contract requires local sourcing of at least 60% of parts.
We will require an initial trial rollout in 5,000 homes and evidence of social impact.
Regards,
Director, DRD
Resource 4 – Extract from a marketing audit summary
GSS currently relies on word-of-mouth and NGO referrals. Its brand is associated with trust and affordability. However, a 2024 brand perception survey in new markets revealed low awareness and concerns about product durability compared to larger multinationals such as SolarX.
GSS’s marketing team is small (3 staff) and has no formal digital strategy. There is also no localized messaging for francophone West African markets.
Resource 5 – Operations update from the Head of Production
Our current facility is operating at 92% capacity. To meet a major scale-up, we would need to either expand production or outsource subassembly. We have identified two regional partners with experience in sustainable component manufacturing. However, we are concerned about quality assurance if we lose full process control.
Resource 6 – Excerpt from a local newspaper article
“Access to solar power has transformed daily life in remote villages. Children now study at night, families charge phones to access mobile banking, and kerosene usage has dropped. However, NGOs report that replacement parts for some GSS kits have been slow to arrive, creating frustrations in isolated regions.”
1.[2]
With reference to business management motivation theory, describe one need that GSS satisfies for rural households requiring solar lighting.
2.[6]
Explain one human resource challenge and one operations challenge GSS may face if it accepts the DRD expansion contract.
3.[17]
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for GSS over the next five years.
Question 4
HLPaper 3
SparkFit Apparel Ltd.
Resource 1 - Newspaper Article
"Local Apparel Brand, SparkFit, Strives to Compete in the Global Activewear Market"
Resource 2 - Financial Statement (Income Statement 2023)
Income Statement for the Year Ending December 31, 2023
Operating Expenses:
| Item | Amount |
|---|---|
| Sales Revenue | £1,200,000 |
| Cost of Sales | £800,000 |
| Gross Profit | £400,000 |
| Expense | Amount |
|---|---|
| Marketing | £50,000 |
| Administrative Expenses | £100,000 |
| Total Operating Expenses | £150,000 |
| Item | Amount |
|---|---|
| Operating Profit | £250,000 |
| Interest | £20,000 |
| Retained Profit | £230,000 |
Despite a 20% increase in revenue compared to 2022, SparkFit faces pressure from production and marketing expenses, impacting profitability.
Resource 3 - Marketing Strategy Flowchart
Market Research - Identify target demographics interested in eco-friendly activewear.
Product Development - Focus on sustainability and quality in material sourcing.
Digital Advertising - Emphasis on social media platforms like Instagram and TikTok.
Influencer Partnerships - Engage with eco-conscious influencers for brand authenticity.
Customer Feedback Loop - Integrate customer feedback for continuous product improvement.
Resource 4 - Consumer Research Summary
A survey conducted by MarketWatch Research among 5,000 UK-based consumers aged 18-34 reveals that 73% of respondents favor brands with sustainable practices. However, only 45% are willing to pay a premium for these options. For SparkFit, this signals both opportunity and challenge, as the eco-conscious market may not guarantee increased sales without pricing strategies that resonate with young buyers.
Competitors have also increased eco-friendly offerings, emphasizing SparkFit’s need for a compelling brand identity and distinct positioning.
Resource 5 - Marketing Campaign Report
1.[2]
Using an appropriate business management theory, identify a human need that SparkFit’s products satisfy for their target consumers.
2.[6]
Outline two challenges SparkFit faces in scaling their digital marketing efforts. Support your answer with evidence from the resources.
3.[17]
Based on the resources and your business knowledge, recommend a comprehensive marketing strategy to improve SparkFit’s brand awareness and competitiveness over the next five years. Your strategy should consider product positioning, digital marketing channels, pricing, and brand partnerships.
Question 5
HLPaper 2
Racing Bandit (RB)
Racing Bandit sells handmade bandanas. RB enjoys strong brand awareness and loyalty.
Table 1: Forecasted figures for RB for the year ending 31 December 2024
| Item | Amount ($ USD) |
|---|---|
| Fixed costs | $15,000 |
| Variable costs per bracelet | $40 |
| Price per bracelet | $70 |
| Number of bracelets produced | 800 |
1.[2]
Define the term brand awareness.
2.[4]
Using Table 1, draw a fully labelled break-even chart, to scale, for RB for 2022.
Question 6
HLPaper 3
FreshFusion – Scaling a Global Organic Beverage Brand
Resource 1 – News Article
🥤 FreshFusion aims to revolutionize the organic beverage industry worldwide!
FreshFusion is a privately owned health beverage company that started in Canada in 2015. The company produces organic, sustainably sourced fruit juices and smoothies, emphasizing health-conscious consumers and eco-friendly packaging.
After rapid growth in North America, FreshFusion has expanded into Europe and Asia, facing significant HR and marketing challenges.
Key Issues:
(1) High employee turnover due to inconsistent leadership styles.
(2) A rigid organizational structure has slowed decision-making and international adaptation.
Weak brand recognition in Asia due to limited marketing research and localization.
FreshFusion’s CEO, Alicia Torres, is considering two strategic changes:
(1) Restructuring the company’s management hierarchy to improve communication and flexibility.
(2) Revising marketing strategies for international expansion, focusing on better sales forecasting, local market research, and targeted branding.
Resource 2 – Internal HR Report on Employee Satisfaction
Key Findings from FreshFusion’s HR Department:
Employees feel disconnected from leadership and desire more autonomy and opportunities for advancement.
| Issue | Percentage of Employees Concerned |
|---|---|
| Lack of career progression | 47% |
| Poor communication from leadership | 39% |
| Motivation issues due to rigid hierarchy | 42% |
| Stress and workload complaints | 35% |
Resource 3 – Sales & Marketing Data
📈 FreshFusion – Sales Performance & Market Research Findings
Key Insights:
(1) Sales growth in Asia is weak due to low brand awareness and lack of localized marketing strategies.
(2) North America remains strong, but competition is increasing.
| Region | Sales Growth Rate | Brand Awareness (%) |
|---|---|---|
| North America | 18% | 75% |
| Europe | 10% | 50% |
| Asia | 5% | 20% |
1.[2]
Using an appropriate business management theory, describe an HR issue that FreshFusion is facing.
2.[6]
Explain two marketing challenges FreshFusion faces in expanding internationally.
3.[17]
Using all the resources provided and your knowledge of business management, recommend a possible plan of action to improve both HR management and marketing strategy at FreshFusion.
Question 7
HLPaper 3
FreshFusion – Scaling a Global Organic Beverage Brand
Resource 1 – News Article
🥤 FreshFusion aims to revolutionize the organic beverage industry worldwide!
FreshFusion is a privately owned health beverage company that started in Canada in 2015. The company produces organic, sustainably sourced fruit juices and smoothies, emphasizing health-conscious consumers and eco-friendly packaging.
After rapid growth in North America, FreshFusion has expanded into Europe and Asia, facing significant HR and marketing challenges.
Key Issues:
(1) High employee turnover due to inconsistent leadership styles.
(2) A rigid organizational structure has slowed decision-making and international adaptation.
Weak brand recognition in Asia due to limited marketing research and localization.
FreshFusion’s CEO, Alicia Torres, is considering two strategic changes:
(1) Restructuring the company’s management hierarchy to improve communication and flexibility.
(2) Revising marketing strategies for international expansion, focusing on better sales forecasting, local market research, and targeted branding.
Resource 2 – Internal HR Report on Employee Satisfaction
Key Findings from FreshFusion’s HR Department:
Employees feel disconnected from leadership and desire more autonomy and opportunities for advancement.
| Issue | Percentage of Employees Concerned |
|---|---|
| Lack of career progression | 47% |
| Poor communication from leadership | 39% |
| Motivation issues due to rigid hierarchy | 42% |
| Stress and workload complaints | 35% |
Resource 3 – Sales & Marketing Data
FreshFusion – Sales Performance & Market Research Findings
Key Insights:
(1) Sales growth in Asia is weak due to low brand awareness and lack of localized marketing strategies.
(2) North America remains strong, but competition is increasing.
| Region | Sales Growth Rate | Brand Awareness (%) |
|---|---|---|
| North America | 18% | 75% |
| Europe | 10% | 50% |
| Asia | 5% | 20% |
1.[2]
Using an appropriate business management theory, describe an HR issue that FreshFusion is facing.
2.[6]
Explain two marketing challenges FreshFusion faces in expanding internationally.
3.[17]
Using all the resources provided and your knowledge of business management, recommend a possible plan of action to improve both HR management and marketing strategy at FreshFusion.
Question 8
HLPaper 3
Affordable Impact Homes (AIH)
Resource 1 -
Excerpt from Sam Bennett’s keynote speech at the National Affordable Housing Summit, May 2024
"Our mission at Affordable Impact Homes is to bring stable, affordable housing to communities struggling with poverty and financial insecurity.
By offering low-cost housing and access to support services, we help residents achieve long-term stability and financial growth. Despite growing demand, our biggest challenge is finding affordable funding sources to sustain and scale our efforts,” said Sam Bennett, CEO of AIH. “We aim to tackle the lack of affordable housing in underserved areas, but high debt ratios are impacting our capacity to expand.”
The CEO emphasized AIH's commitment to poverty alleviation through housing but noted that high debt levels strain operational flexibility, limiting their reach and scalability.
Resource 2 - Gearing Ratio Analysis (2023) Affordable Impact Homes Ltd.
| Financial Metric | 2022 | 2023 |
|---|---|---|
| Total Equity | £1,200,000 | £1,400,000 |
| Long-term Debt | £800,000 | £1,200,000 |
| Gearing Ratio (Debt to Equity) | 67% | 86% |
AIH’s gearing ratio increased from 67% in 2022 to 86% in 2023, reflecting a higher reliance on debt to fund operations.
This elevated debt-to-equity ratio limits AIH’s ability to secure additional funding and affects its financial stability, making growth more challenging without alternative financing options.
Resource 3 - Email from Local Government Official
From: Anna Rivers, Director of Community Housing Grants, City Council To: Sam Bennett, CEO, Affordable Impact Homes
Resource 4 - Excerpt from AIH’s Website
1.[2]
Using an appropriate business management theory, describe a human need that AIH meets through its affordable housing initiatives and community support programs.
2.[6]
Explain two potential challenges that AIH may face in expanding its operations. Use information from the case study and resources provided to support your answer.
3.[17]
Using all resources provided and your knowledge of business management, recommend a strategic plan for the sustainable growth of AIH over the next five years. Your answer should consider funding strategies, financial stability, partnership opportunities, and community impact.
Question 9
HLPaper 3
LumiLens Ltd.
Resource 1 - Press Release
"LumiLens Ltd Expands into Virtual Try-On Tech for Global Market"
Resource 2 - Social Media Analysis
An analysis of LumiLens’s social media engagement for 2023 reveals strong interest in the company’s digital innovations and luxury positioning. Popular posts featured influencer collaborations and glimpses into the brand’s design process.
Posts using the #LumiLensVirtualTry have seen a 20% higher engagement rate than regular product posts. The platform has over 500,000 followers across Instagram and TikTok, where it frequently posts curated content appealing to younger demographics.
Resource 3 - Financial Statement (Extract)
Profit and Loss Account for Year Ending 31 December 2023
| Category | £ |
|---|---|
| Sales Revenue | £15,500,000 |
| Cost of Sales | £8,000,000 |
| Gross Profit | £7,500,000 |
| Marketing Expenses | £1,500,000 |
| Operating Expenses | £3,000,000 |
| Net Profit | £3,000,000 |
The company allocated 10% of its total budget to marketing, largely in digital campaigns and influencer partnerships aimed at boosting brand awareness in the luxury and tech-savvy sectors.
Resource 4 - Market Research Report
Title: "Global Eyewear Market Trends - 2024"
Resource 5 - Customer Feedback Survey Summary
Feedback from a sample of LumiLens’s online customers shows an overwhelmingly positive response to the virtual try-on feature. While 76% of respondents indicated they would “definitely recommend” the virtual try-on, some customers expressed privacy concerns over camera permissions.
Additionally, many noted that this feature encouraged them to try bold styles they otherwise wouldn’t consider.
1.[2]
Using an appropriate business management theory, describe a human need that LumiLens is addressing with its virtual try-on technology.
2.[6]
Identify and explain two challenges LumiLens may face as it integrates virtual try-on technology into its business model. Support your answer with information from the case study and resources provided.
3.[17]
Using all the resources provided and your knowledge of business management, recommend a marketing strategy to help LumiLens increase its market share in the global eyewear industry over the next five years. Your response should consider target market segmentation, digital marketing tactics, and competitor positioning.
Question 10
HLPaper 2
Gizmo Galaxy (GG)
Gizmo Galaxy (GG) is a small independent shop run by Sam, who brings 25 years of experience in retail and tech products. The store offers a variety of new and second-hand electronics, including gadgets, accessories, and digital cameras. Despite having a loyal customer base, the store's overall revenue is on a downward trend, with particularly low market share in the accessories and digital camera segments.
With the rapid evolution of technology, Sam conducted a mix of primary and secondary market research. The findings indicated:
- The demand for digital cameras is rapidly decreasing.
- Sales of gadgets are slowly declining, although the latest releases still attract customers.
- Computer peripherals, recently added to the inventory, are selling out quickly, while interest in refurbished devices is gradually rising.
Although Sam is used to the ups and downs of the market, the current outlook is more concerning than ever. To adapt, he plans to launch an online store to expand sales of gadgets and refurbished electronics. Sam is also aware of the growing competition from online tech platforms and digital service providers.
With limited internal funds to set up the website, Sam is considering two strategies for GG:
- Phasing out digital camera sales.
- Increasing targeted promotional efforts for refurbished electronics.
1.[4]
Explain one advantage and one disadvantage for GG of using sales forecasting.
2.[4]
Explain one cost and one benefit for GG of setting up an e-commerce website.
3.[2]
Define the term secondary market research.
4.[8]
Using the Boston Consulting Group (BCG) matrix, discuss the two new tactics Sam is considering to ensure GG’s future success.