IB Business Management Pre seen Case study

P&S Trawlers
for
May 2020
Examination
Session

Shae and Patsy Pekka Tapio

Paper 1 Assessment Structure
 Assessment structure of the Paper 1
Higher Level Standard Level
Duration 2 hours 15 minutes 1 hour 15 minutes
Max. Marks 60 ( 35 % weighting) 40 ( 30 % weighting)
No. of sections A, B and C A and B
Section A ( 20 marks) Answer 2 structured questions Answer 2 structured questions
out of 3. out of 3.
Section B( 20 marks) Answer 1 compulsory Answer 1 compulsory structured
structured question. Note: This question. Note: This section will
section will have additional have additional stimulus material.
stimulus material.
Section C ( 20 marks) Answer 1 compulsory extended NA
response question. Note: This
section will have additional
stimulus material.
 Business and key people
P&S Trawlers (PST ) is a
private limited company.
Owned by Pekka Heikki’s
family in Finland.
[Note: It was a partnership business.]

Shae and Patsy

Pekka Tapio
Industry and location

They have been

involved in the fishing
industry in Finland
 Country profile
Finland is a country with a
long and very beautiful
coastline. Fishing is its
largest industry, followed
closely by tourism.
 Shareholding of PST

Tapio
Pekka Shae and Patsy

20 % 40 %
40 %
 Areas of Responsibility
Pekka is responsible for all
activities relating to PST ’s
trawlers and crews.

Tapio is responsible for

other areas of the business,
including marketing, finance
and administration.
CSR @ PST
PST has always fished
responsibly, with the aim
of preserving fish stocks
for future generations.
 PST’s challenges!!
• Governments are increasingly imposing
restrictions on the size and types of fish
• Stricter quotas on the weight of the
catches.
• Quotas may restrict PST ’s activities and
reduce future profits.
• Recent Finland government trade
agreements with other countries have
also allowed foreign trawlers to catch
more fish than previously allowed.
 PST’s challenges!!
• The large catches of these foreign boats
are reducing market prices and further
reducing PST ’s ability to earn a
reasonable income.
• A further problem is that many
technology businesses are relocating to
Finland and paying higher and more
stable wages. In this environment, many
smaller fishing businesses are struggling
to survive.
 However, there are some positive factors
• The family has a strong determination to
overcome the challenges faced by the business.
• In the past, careful management of money
enabled the business to survive threats.
• The PST workforce is loyal and hard working.
• PST uses the latest technology.
• For many reasons, people are switching from
eating meat to eating fish.
• Labour turnover at PST has been low.
• The government has a policy of supporting
responsible and ethically managed fishing
business.
PST owns 3 trawlers and
employs 40 people. Each
trawler has a crew of seven.
 Operations @ PST
• The fish is kept chilled in PST ’s warehouse.
• PST freeze some of the fish.
• Tapio manages the employees who work in the
warehouse.
• She also has a team of employees who carry out
administration, such as record keeping, issuing
and paying invoices, and managing the
subcontractors who service the trawlers,
transport the fish to markets and provide fuel.
• Some human resource and accounting functions
are outsourced.
Working environment @ PST
• PST has always tried to create a friendly working
environment. Teamwork is essential, particularly for
the crews of the trawlers when they are at sea.
• All crews undertake extensive induction training.
• There are also additional training sessions on board
the trawlers to update the crews’ skills.
• In addition, all crews are required to attend annual
training for health and safety and safeguarding at a
local college.
• Pekka takes responsibility for mentoring the trawler
captains.
Ethical practices @ PST
• Rigorous application of health and safety laws,
compliance with government regulations and
quotas, and accurate record-keeping of the fish
caught.
• He has excellent working relationships with the
crews, and he insists that there is no room for
taking risks.
• He is strict with procedures and responsibilities.
• All the trawlers and the overall fishing operations
have a clear command structure.
• PST pays good salaries to crew members, and crews
receive generous bonuses for good catches.
Gender composition @ PST
• Historically, the crews at PST have
been all male. However, several
women have recently asked to
work on the trawlers. Pekka and
Tapio recognize the need for
diversity.
 Working style of Tapio ( Leadershistyle)
• Tapio is open-minded and flexible
about the ways that her teams work.
• She encourages new ideas and
alternative ways of working in the
office and warehouse
• She delegates tasks whenever
opportunities arise. Autocratic or
• She supports job rotation. democratic
leader?
 Marketing aspects of PST
• Some of the fish caught are sold in the local fish
market to hotels, restaurants, fish shops and local
residents.
• PST also sells fish directly to Presto, the country’s
biggest supermarket business, and some of its fish
is sold through agents to overseas markets.
• Competition is high, so PTS is in frequent contact
with the hotels, restaurants and fish shops to
ensure it retains its customers.

Distribution channels ( Place)

Marketing aspects of PST
• PST ’s fish is very high quality and generally
sells at a premium (high) price.
• The market price is subject to fluctuations
due to factors such as the weather, the
season and the activities of competitors.
However, sales to Presto are on a fixed
contract at a price that is usually lower
than market prices.

Pricing strategy
Influence of external factors
Recently, business news
reporters have started
speculating that new trade
arrangements between countries
will make selling overseas more
difficult.

STEEPLE/PESTLE /PEST
Influence of external factors – changing marketing strategy

Tapio may have to find

some new markets
and develop a revised
marketing strategy.

Use Ansoff matrix to explain this

 Financial aspects of PST
• Major items of expenditure for PST include fuel
for the trawlers, salaries and rents for the office
building and warehouse.
• Fuel and salaries are paid for at the end of each
month.
• Rent is paid a month in advance.
• Local customers are expected to pay for their
orders immediately.
• Restaurants, hotels and fish shops have one
month credit Supermarkets have 90 days credit.

Connect this to cash flow, ratios, revenue expenditure, fixed cost etc.
 Use of technology @PST
• PST has recently installed the latest satellite
technology on its trawlers.
• This electronic equipment enables better
monitoring of fish shoals, thereby improving
navigation and the chances of good fish catches.
• Improved technologies enable PST to maintain
more detailed and accurate records about catches
and allows it to send this information automatically
to the government, which monitors all quotas.

Connect this with research and development ( R&D) and ‘T’ in PEST
 The way forward – growth options

Connect this with internal growth/external growth/Ansoff matrix

The way forward – growth options ( Tapio)

• Tapio wants the business to

diversify.
• Some of her ideas include opening
their own fish shops, offering
services and facilities to other fishing
businesses, and finding alternative
uses for the trawlers.

Connect this with internal growth/external growth/Ansoff matrix

The way forward – growth options ( Pekka)
Pekka thinks the best way to
grow is through buying
updated and larger trawlers
similar to those operated by
overseas competitors.

Connect this with internal growth/external growth/Ansoff matrix

Influence of external factors – changing marketing strategy

Tapio may have to find

some new markets
and develop a revised
marketing strategy.

Use Ansoff matrix to explain this

Key financial figures of PST ( projected 2020)
• Sales
• Net profit margin
• Fixed assets
• Current assets
• Current liabilities
• Overheads

Connect this with the relevant ratios.

IB Business Management Pre seen Case study

Acknowledgements
• Business Management case study booklet for May 2020 examination session
published by the IBO
• Owners/copyright holders/creators of images and graphics used in this
presentation.