Evaluate the usefulness of strategic choice techniques to the directors as they consider Peter's proposal for PGC to open cafés.

Mark scheme

Marking points from the official mark scheme (May/June 2021). The mark or mark type is shown in brackets.

1. Knowledge: Explanation of methods of strategic choice – Ansoff, Force Field Analysis, Decision trees
2. Knowledge: Role of investment appraisal techniques
3. Knowledge: Quantitative v qualitative factors
4. Knowledge: Place of strategic choice in strategic management
5. Knowledge: Understanding of SWOT, PEST, Porter's Five Forces and Boston Matrix as strategic analysis techniques prior to SC.
6. Knowledge: Role of objectives in strategic management
7. Application: First objective is survival.
8. Application: New roasters and/or ERP
9. Application: Competitive market conditions
10. Application: Reference to the Force Field Analysis, diversification or identified core competencies.
11. Application: Force Field Analysis: Driving forces 13: Restraining forces 12
12. Application: Other possible choices – e.g. sell tea.
13. Application: ARR 2% Payback 4 years
14. Application: Expected monetary value of $100 000.
15. Application: Ansoff - diversification
16. Analysis: Linking objective to strategic choice and management
17. Analysis: How techniques may be used and the advantages and disadvantages.
18. Analysis: Force field analysis encourages managers to consider different aspects of a decision.
19. Analysis: Force field analysis: By identifying restraining forces action can be taken to mitigate negative effects and reduce risk.
20. Analysis: Force field analysis: Visual summary of factors in a decision. Helps focus attention on the most important forces affecting the decision. Facilitates discussion of these points to enhance decision making.
21. Analysis: Force field analysis: Forces can be weighted thus improving decision making.
22. Analysis: Force field analysis: Subjective forces are objectified by giving them a weighting focusing attention on important issues and making it easier to compare force for and against change.
23. Analysis: Role of other techniques in decision making that consider the quantitative aspects of the choices.
24. Analysis: Use of probabilities in decision trees therefore reducing risk for PGC of option choice.
25. Analysis: ARR enables PGC to choose option with highest return which may be important to shareholders.
26. Analysis: The use of techniques to analyse aspects of the options.
27. Analysis: Consideration of why each of the applied strategic choice methods leads to the recommendation.
28. Analysis: Consideration of other information in the case and how this might relate to the recommendation.
29. Analysis: Relation of choice techniques to other areas of strategic management
30. Evaluation: Assessment of likelihood of success
31. Evaluation: To what extent do the strategic choice methods results lead to Peter's recommendation? Is this the only possible conclusion?
32. Evaluation: Will market conditions relating to cafes still apply in the future?
33. Evaluation: Is the objective of survival defined enough to generate a strategic plan?
34. Evaluation: Would more numerate objectives aid planning?
35. Evaluation: Need to consider other options – role of Directors in choice.
36. Evaluation: Elements that the evaluation/judgement might depend on: Effective integration of analysis and choice techniques will be important.
37. Evaluation: Elements that the evaluation/judgement might depend on: How accurate is the information used in the strategic choice methods? Success may depend on this.
38. Evaluation: Elements that the evaluation/judgement might depend on: Ability of the individual(s) completing the SC techniques.
39. Evaluation: Elements that the evaluation/judgement might depend on: SC techniques need to be used together taking account of both quantitative and qualitative factors.
40. Evaluation: Elements that the evaluation/judgement might depend on: Weighting of the driving and restraining forces is subjective. Has Peter manipulated the data to support his preferred outcome? Bias and hidden agenda in formulating the analysis. Disagreements about relative importance.
41. Evaluation: Elements that the evaluation/judgement might depend on: Forces may be missed from the analysis.
42. Evaluation: Justification of most useful choice technique with supporting argument.
43. Evaluation: Significance of other factors that may also be important: Impact of management objectives and attitudes.
44. Evaluation: Significance of other factors that may also be important: Availability of finance (these may be included in the FFA). Are resources an issue – e.g. finance, sales staff, and capacity?
45. Evaluation: Significance of other factors that may also be important: The choice must be implemented successfully – this may require a successful detailed business plan, management of change, training, new employees.
46. Evaluation: Significance of other factors that may also be important: Other information that could be useful? Additional information is essential - e.g. current and forecast rates of interest.