Discuss the usefulness of strategic choice techniques for the directors of AC, as they decide between Option A and Option B. Option A - Production of luxury chocolates Option B - Purchase land and farm cocoa beans Capital cost ($m): Option A = 2, Option B = 1.5 Lead time to set up project (years): Option A = 1, Option B = 3 Probability of success (%): Option A = 70, Option B = 80 Estimated annual economic return if successful ($m): Option A = 0.8, Option B = 0.6 Driving forces: Option A: Use of own processed chocolate powder; Control over marketing of final product Option B: Secure cocoa bean supply; Good transport links with Factory S Constraining forces: Option A: Lack of expertise in chocolate final processing and retailing Option B: Lack of expertise in farming cocoa beans Opportunities: Option A: Growing market for chocolate products in the home country and worldwide Option B: Growing demand for cocoa beans from AC and other companies Threats: Option A: Competition from well-known brands Option B: Weather and crop disease; Over-supply in market for cocoa beans
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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