Evaluate the significance of corporate planning in reducing risk as Inolla continues to grow.

Mark scheme

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

1. [1] Business Plan: A written document that describes a business, its objectives and its strategies, the market it is in and its financial forecasts.
2. [1] Corporate Plan: This is a methodical plan containing details of the organisation's central objectives and the strategies to be followed to achieve them.
3. [1] A business / corporate plan: Gives direction to the business. The plan provides Inolla directors with a clear focus for what the company should be trying to achieve in the medium term.
4. [1] Helps motivate staff. It provides a sense of purpose.
5. [1] Enables planning at different levels of the business and ensures all staff are working towards the same goals.
6. [1] Acts as a means for control and review. Actual outcomes can be compared with the objectives set and the performance of Inolla can be assessed.
7. [1] Helps ensure that resources are used effectively and that all departments are working together.
8. [1] The planning process itself is useful. It encourages directors and managers to consider the current situation of the firm and to set objectives accordingly.
9. [1] Corporate plans will include techniques of strategic analysis such as SWOT and Porter's Five Forces.
10. [1] How dynamic markets may undermine plans.
11. [1] Potential link between profitability and having clear business plans.
12. [1] Provides clear focus to senior managers.
13. [1] Enables control and review process.
14. [1] Of interest to potential investors and staff.
15. [1] Corporate plan provides clear objectives to then use in setting objectives at departmental and individual level through MBO.
16. [1] Li-chun's research into solutions to problems faced in commuting before setting up Inolla as part of business planning to identify a gap in the market.
17. [1] Market research into shared micromobility market as part of business planning.
18. [1] Operations close to capacity; planning necessary for subcontracting or expansion.
19. [1] Lack of a contingency plan for the battery fires?
20. [1] Planning for introducing ERP.
21. [1] Evidence of some strategic analysis as part of planning process in choosing growth strategies – SWOT 2018 and Porter's Five Forces analysis.
22. [1] Cost to Inolla of commissioning the Porter's Five Forces analysis.
23. [1] Need for a plan if Inolla goes public to generate investor interest.
24. [1] Business planning and the competitive nature of the micromobility market.
25. [1] Need for planning including marketing strategy for entry into micromobility market.
26. [1] Contingency planning could have helped minimise the damage to Inolla of battery fires.
27. [1] Planning necessary to deal with the problem of insufficient capacity.
28. [1] This needs to be done in advance to meet the increasing demand for Inolla's scooters and avoid negative publicity / dissatisfied customers.
29. [1] Planning helps reduce risk by anticipating changes in the market and preparing the business for the future. Without a plan Inolla will lack direction and objectives to target.
30. [1] Planning helps control expenditure and therefore reduces risk of cashflow problems.
31. [1] Strategic decisions affect all parts of the organisation, so planning is important to coordinate activities.
32. [1] Planning is time-consuming and can be expensive, the more detail the greater the time and cost.
33. [1] SWOT analysis / Porter's Five Forces and links to effective decision-making regarding expansion. Analysis will reduce risk to Inolla in its decision making and thus help to ensure profitability.
34. [1] The business environment is dynamic and there can be unexpected internal and external events. Thus, business planning cannot eliminate risk only reduce it.
35. [1] Contingency planning necessary to deal with the unexpected but can be expensive.
36. [1] Reliability of information – how much is spent on market research/data gathering and how relevant is it? Interpretation of information used in planning can be influenced by skills and training of leadership.
37. [1] Monitoring and review essential to ensure costs are not increasing in this rapidly changing market.