Strategy & Decision Making is a core part of IB Business Management. Revise the key concepts and common mistakes below, then lock them in with the free games.
Key concepts
RivalryIntensity of competition among existing firms
Threat of entryEase for new firms to enter
SubstitutesAlternative products meeting same need
Buyer powerCustomers' ability to push price down
Supplier powerSuppliers' ability to push price up
Barrier to entryPatent, brand, scale that blocks rivals
Decision nodeSquare — manager's choice
Chance nodeCircle — probabilistic outcome
Expected valueSum of probability × payoff
Organic growthInternal expansion of existing firm
MergerTwo firms combine on equal terms
AcquisitionOne firm buys another
Cost leadershipCompete on lowest unit cost
DifferentiationCompete on unique value
Common mistakes to avoid
Questions where students often pick the tempting wrong answer — make sure you know the right one:
Do all businesses aim only to maximise profit?✗ Yes, profit is every business's only goal. ✓ No — aims vary: survival, growth, market share, social aims.
Does a sole trader have limited liability?✗ Yes, sole traders have limited liability. ✓ No — sole traders have unlimited liability for business debts.
Practise Strategy & Decision Making — free games
Test yourself with these quick revision games for this topic:
See all 17 games in the Subjects Arcade →
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