IB Business Management SLTopic 8 — The Pre-Released StatementPaper 1Industry context~11 min read
Industry Background: Electronic Waste
E-waste is the new half of ABC’s business and the reason the case study is interesting. It is a huge, fast-growing market where most of the raw material is thrown away. But there is a catch, and if you spot it you will out-answer most candidates: the hard part is not processing the waste. It is getting hold of it.
What you need to know
E-waste is discarded electronics — old phones, laptops, TVs, cables, consoles.
Around 62 million tonnes were produced worldwide in 2022, and the figure is expected to pass 80 million tonnes by 2030.
Only just over a fifth is formally collected and recycled. The rest goes to landfill or is handled informally.
Processors do not sell to shoppers. They sell recovered materials to other businesses, which makes this a B2B market.
Profits swing with metal prices, so revenue is far less predictable than concrete sales.
Collection is the bottleneck, not capacity. A factory can only run if the waste actually arrives.
Rules are tightening, which raises costs but also squeezes out unsafe competitors.
A market that is mostly untapped
Two numbers tell the whole story. The pile is enormous and growing, and almost none of it is being recycled properly. That gap is the commercial opportunity ABC has walked into.
The grey block is the prize. Any firm that solves collection, not processing, unlocks it.
Two sets of numbers, and that is fine. Real industry data puts global e-waste at roughly 62 million tonnes with about 22% formally recycled. ABC’s own case study quotes 50 million tonnes with 80% going to landfill. In the exam, always use the figures printed on the paper. The industry data is background that helps you sound informed, not a correction to make.
Who is in this market
There are two kinds of player, and they do different jobs.
Electronics recyclers and IT asset disposal firms. They collect devices, sort them, wipe the data and break them down ready for processing. Sims is a well-known example.
Smelters and refiners. They do the chemistry, pulling out high-value metals such as gold, silver, palladium and copper. Aurubis, Umicore and Boliden work at this end.
ABC has jumped straight to the valuable end with its own recovery process. That is where the margin is, but it also means it depends on somebody feeding it circuit boards.
Draw this chain in the exam if it helps you think. Most strong answers about ABC’s e-waste plans come back to step one.
Why demand keeps rising
Two forces push in the same direction. On the supply side, people replace devices more often, technology dates quickly and there are simply more gadgets per person than there used to be. On the policy side, governments want higher recycling rates, firms want to hit environmental targets, and everybody wants to be seen behaving responsibly.
The result is a market where the raw material keeps growing and the pressure to process it keeps growing too. For a firm with a cheap recovery process, that is a good place to be.
The four big problems
1. Collection
Plenty of e-waste exists, but most of it never reaches a proper recycler. It sits in drawers, goes in general rubbish, or is shipped somewhere else. That caps how much material formal firms can access, no matter how good their technology is.
2. Informal recycling
In some countries e-waste is stripped down by hand using unsafe methods — burning cables, using acid baths, no protective equipment. The health damage is serious. The World Health Organization has warned that millions of children and adolescents may be exposed to risk through informal e-waste work, and research in Ghana has found significant lead exposure among people living and working near these sites.
For a firm like ABC this is a competitive problem as well as an ethical one. Informal operators have almost no costs, so they can outbid legitimate recyclers for the same scrap.
3. Uncertain profits
Revenue depends on the price of gold and copper on world commodity markets. Those prices move for reasons that have nothing to do with ABC. Process more tonnes and still earn less — that is entirely possible if metal prices fall.
4. Tightening rules
Governments are clamping down on exporting e-waste. Controls under the Basel Convention affect how shipments move across borders, and countries such as Malaysia have moved to ban e-waste imports, with illegal shipments seized. Firms also face higher environmental and safety standards. Compliance costs money — but it also protects responsible businesses from being undercut.
Notice how neatly these four map onto a STEEPLE analysis: social, technological, economic and legal, all in one industry. That is not a coincidence.
Regional picture
Region
What is happening
What it means for a firm like ABC
Asia
Produces nearly half the world’s e-waste, but recycling rates are relatively low.
The biggest untapped supply, and therefore the biggest long-term opportunity.
Europe
Stronger recycling laws and higher collection rates, though several countries still miss official targets.
Reliable supply and clear rules, but established competitors already operating there.
Southeast Asia
Receives illegal shipments; governments are increasing enforcement and banning imports.
Legal risk. Anyone sourcing material here needs to be sure it is properly documented.
Africa
Large informal recycling sector, often with little safety equipment and real health risks.
Cheap competition and a reputational minefield for any firm sourcing from the region.
WORKED EXAMPLE
Explain one benefit to ABC of forming partnerships with local governments to collect e-waste. [2]
Step 1: the point
Partnerships would give ABC a steady, organised supply of discarded electronics rather than relying on whatever it can buy on the open market [1]
Step 2: apply it to ABCSince only about a fifth of e-waste is formally collected, securing supply is the main thing limiting ABC’s factory, so a reliable inflow would let it run closer to full capacity and spread its fixed costs [1]Point + application = 2 marksTwo marks, two sentences. The second one has to mention ABC.
WORKED EXAMPLE
Analyse the likely impact on ABC of expanding its e-waste processing operations. [6]
Point 1: revenue and risk spreading
Expanding gives ABC more income from recovered metals, sold to jewellery makers and other manufacturers [1]. Because concrete demand is cyclical and falls during recessions, a second stream reduces ABC’s dependence on construction [1]
Point 2: fixed costs and capacity
A larger operation means higher fixed costs for buildings, machinery and skilled staff [1]. If ABC cannot collect enough e-waste to keep the plant busy, those costs are spread over fewer tonnes and unit costs rise [1]
Point 3: the balanceRevenue also depends on gold and copper prices, which ABC does not control [1]. So expansion could raise profits sharply in a strong market but leave ABC exposed if metal prices fall while its loan repayments stay the same [1]6 marks: two developed impacts plus a balanced judgementCapacity utilisation is the operations idea hiding inside this question. Name it if you can.
Exam tip
Lead with supply, not technology. Most e-waste questions are really about whether ABC can get enough material.
Use the phrase capacity utilisation. It turns a vague point about a quiet factory into operations analysis.
Mention metal prices for evaluation. Uncontrollable revenue is a strong limitation to raise.
Remember informal recyclers exist. They are competitors with almost no cost base.
Use the case study’s numbers. If the paper says 50 million tonnes, use 50 million tonnes.
Link to the circular business model. Turning waste into a resource is the exact phrase examiners are listening for.
Common mix-up
Assuming e-waste is free. Recyclers compete to buy scrap, and informal operators bid it up.
Treating recycling as automatically profitable. It depends entirely on what the recovered metal sells for.
Confusing collectors with refiners. They are different businesses with different economics.
Thinking regulation is only a cost. It also removes unsafe competitors, which helps compliant firms.
Saying ABC now sells to consumers. It sells recovered material to other businesses.
Ignoring the toxic side. E-waste contains hazardous metals, so there are real health, safety and legal duties.
Up next: Bringing SWOT and STEEPLE Into Your Answers — how to turn everything on these last two pages into structured analysis that earns marks.
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