Yoon has produced a strategic analysis of PY's potential entry into the North American market. Evaluate the usefulness of this strategic analysis to PY's Directors when they consider the plan to expand into North America.

Mark scheme

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

1. [0] Explanation of strategic analysis and its techniques – SWOT, PEST, Boston Matrix, Porters 5 Forces, core competencies.
2. [0] Effective strategic analysis may result in clearer and more relevant business objective, better strategic decisions and less risk as PY will be better prepared for the future
3. [0] Place of strategic techniques in strategic management
4. [0] Need to understand the external environment in North America requiring a detailed PEST analysis
5. [0] Implications of high gearing linked to need to raise $20m finance
6. [0] 5% growth of the North American market link to PY objective of growth
7. [0] Saturated market in country S link to PY objective of growth
8. [0] Impact of a focus on international expansion on PY's ability to deal with the challenge of Blue Berry in country S
9. [0] Reference to Porter's Five Forces, Appendix 4.
10. [0] Need to overcome the brand preference of established business
11. [0] Significance of threat of substitutes for pricing tactics
12. [0] Economies of scale low indicates that PY can be price competitive
13. [0] Individual consumers so limited negotiating power
14. [0] Limited supplier power
15. [0] The time, money and effort needed to conduct SA and impact on PY
16. [0] How SA will improve business planning and thus reduce risk e.g. PY will be able to work on marketing strategy to overcome brand preferences. May need to increase marketing budget to be successful
17. [0] Understanding the American market through appropriate PEST analysis will inform PY's decisions and improve effectiveness of marketing
18. [0] Limited supplier power therefore PY may be able to negotiate favourable terms
19. [0] SWOT/Pest analysis will mean that PY considers a range of internal and external factors thus reducing risk of expansion into North American market
20. [0] Helps to prioritise strategies, for example, to deal with weaknesses of PY
21. [0] Dynamic markets so analysis can quickly become outdated
22. [0] Subjective nature of the analysis
23. [0] Simplistic listing approach of the techniques
24. [0] Critical comments on the techniques e.g. Boston Matrix not relevant to this decision
25. [0] Importance of understanding where the business is now in order to generate ideas and/or support for overseas expansion
26. [0] Comments that strategic analysis on its own is not enough to fully support a decision. Need for strategic choice techniques.
27. [0] Weighing up importance of other stages in strategic management especially objectives and choice techniques in relation to strategic analysis
28. [0] Ranking the usefulness of the techniques in relation to overseas expansion
29. [0] An assessment of the relative importance of business planning in relation to strategic analysis
30. [0] An assessment of the importance of timing and a timescale in carrying out analysis.