Evaluate the importance of business planning to the future success of PY.

Mark scheme

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

1. [0] Definition: A business plan is a detailed report on a company's future long-term aims/objectives and the strategies it will follow to achieve them.
2. [0] Gives direction to the business. The plan provides PY directors with a clear focus for what the company should be trying to achieve in the medium term.
3. [0] Helps motivate staff. It provides a sense of purpose.
4. [0] Enables planning at different levels of the business and ensures all staff are working towards the same goals.
5. [0] Acts as a means for control and review. Actual outcomes can be compared with the objectives set and the performance of PY can be assessed.
6. [0] Helps ensure that resources are used effectively and that all departments are working together.
7. [0] The planning process itself is useful. It encourages directors and managers to consider the current situation of the firm and to set objectives accordingly.
8. [0] How dynamic markets may undermine plans
9. [0] Potential link between profitability and having clear business plans.
10. [0] Planning of finance (sources and time-scales) will impact on expenses which can affect profitability
11. [0] Need to secure finance for expansion to North America. Planning essential to convincing financiers to support expansion.
12. [0] Reference to potential problems resulting from TV documentary. Contingency plan could have reduced likely impact
13. [0] Reference to PY's SWOT analysis and Porter's Five Forces as part of planning process
14. [0] Reference to decision regarding the three cafes in North East.
15. [0] Benefits of direction given for employees and their motivation linking to efficiency and achievement of objectives
16. [0] SWOT analysis / Porter's Five Forces and links to effective decision making regarding expansion. Analysis will reduce risk to PY in its decision making and thus help to ensure profitability.
17. [0] Contingency plan could have enabled PY to deal effectively with TV documentary and thus protect profits and protect brand image
18. [0] Better planning may have avoided problems with the three cafes. Marketing support might have been identified as necessary to meet sales targets
19. [0] Needs to be flexible and adaptable to meet new situations.
20. [0] 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.
21. [0] Reference to decision regarding the three cafes in North East. Was planning effective? Was there sufficient market research?
22. [0] Planning is time-consuming and can be expensive
23. [0] As there is a dynamic business environment therefore there is a need to adjust plans accordingly
24. [0] Planning doesn't guarantee success. It may be of little significance unless it is acted upon
25. [0] Plans may be restrictive and discourage be responsive to changes in the market
26. [0] Depends on the level of detail
27. [0] For new markets such as North America business planning may be more important as PY limited knowledge of the market and cost of expansion is significant
28. [0] Monitoring and review essential to ensure costs are not increasing in this rapidly changing market