Discuss the importance of contingency planning to the future success of SWF.

Mark scheme

Marking points from the official mark scheme (May/June 2019). The mark or mark type is shown in brackets.

1. Definition of contingency planning: preparing an organisation’s resources for unlikely events. This may also be referred to as crisis management, scenario planning and business continuity planning.
2. Allow reference to business use of having a 'Plan B'
3. Benefits: Reassures customers and staff that their interests are being considered. Reduces potential impact on customers in the event of a major disaster
4. Recognising major risks may actually reduce the risk of the disaster happening
5. Limitations: Disasters still occur
6. Can’t have contingency plans for all eventualities
7. Recognising major risks, such as milk contamination
8. impacts of weather on production
9. disease of livestock
10. failure of equipment – could impact storage of ice cream etc
11. fire in factories producing ice cream etc
12. Commentary on SWF’s response to milk contamination
13. Confused statements from SWF
14. Delay in appointing PR consultant
15. Delay in public announcement from CEO
16. Can be expensive and time consuming especially for small businesses.
17. There is the planning process and also the need to train staff for each possible eventuality
18. With fore-planning the public relations response is much more likely to be quick and appropriate so that senior managers can manage the media attention and communicate effectively what the company intends to do, by when and how from disasters both in terms of costs and bad PR and loss of customer loyalty
19. Avoiding disasters is better than planning what to do if they happen.
20. Plans need to be updated frequently as the business develops increasing costs
21. Ineffective response to milk contamination threatens SWF’s future sales and profitability
22. Judgement of extent to which CP is important to success
23. Recognition that other factors will have significant impact on success of SWF
24. Cost of CP needs to be balanced against the potential costs of not doing it. Which potential disasters should be planned for?
25. How much time is spent on preparing and testing contingency plans?