Evaluate the role of corporate planning in the successful implementation of either option 1 or option 2.

Mark scheme

Marking points from the official mark scheme (May/June 2022). The mark or mark type is shown in brackets.

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. 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. A business/corporate plan:
4. Gives direction to the business. The plan provides HD’s directors with a clear focus for what the company should be trying to achieve in the medium term.
5. Helps motivate staff. It provides a sense of purpose.
6. Enables planning at different levels of the business and ensures all staff are working towards the same goals.
7. Acts as a means for control and review. Actual outcomes can be compared with the objectives set and the performance of HD can be assessed.
8. Helps ensure that resources are used effectively and that all departments are working together.
9. Contingency planning
10. The planning process itself is useful. It encourages directors and managers to consider the current situation of the firm and to set objectives accordingly.
11. Corporate plans will include techniques of strategic analysis such as SWOT and Porter’s 5 Forces
12. How dynamic markets may affect plans
13. Potential link between profitability and having clear business plans
14. Provides clear focus to senior managers.
15. Enables control and review process.
16. Of interest to potential investors and staff.
17. Corporate plan provides clear objectives to then use in setting objectives at departmental and individual level through MBO
18. Making use of the business context:
19. HD design, manufacture and supply circuit boards.
20. Content of option 1 (focus is production/operations) and option 2 (focus is product development).
21. Cost and implications for finance – Option 1 may need external finance link to gearing which is relatively low
22. Need for recruitment of design engineers with different skills in Option 2
23. Corporate objective of continued long-term growth
24. HD’s mission statement: ‘to provide world class software....’ link to low-cost manufacturing and quality
25. Timescale - short to medium term
26. Analysis:
27. Both options involve significant change but in different areas.
28. Business plan integrates functions, finance and management.
29. Relationship of business plan to other elements of strategic implementation.
30. Suggestions for content of plan relating to chosen option.
31. Advantages and disadvantages of producing a business plan.
32. Business plan for an option may enable other aspects of the business to be more effective, increasing chances of success for that option.
33. Involvement in producing the plan can engage employees and lead to more motivation and efficiency.
34. Planning helps reduce risk by anticipating changes in the market and preparing the business for the future. Without a plan HD will lack direction and objectives.
35. Planning helps control expenditure and therefore reduces risk of cashflow problems.
36. Strategic decisions affect all parts of the organisation, so planning is important to coordinate activities.
37. Planning is time-consuming and can be expensive, the more detail the greater the time and cost.
38. Evaluation:
39. Only award EVAL if the candidate has also demonstrated APP.
40. Justified conclusion on importance of corporate planning.
41. Plan only as good as the information, analysis and choice techniques it is based on.
42. Plan effective only if communicated, understood and implemented.
43. Plan must be flexible and adaptable to be effective
44. Plan must integrate functional area plans and contain contingency planning
45. The business environment is dynamic and there can be unexpected internal and external events. Business planning cannot eliminate risk only reduce it.
46. Contingency planning necessary to deal with the unexpected but can be expensive.
47. 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.
48. Monitoring and review essential to ensure costs are not increasing in this rapidly changing market.