Evaluate the importance of business planning to AEV's future profitability.

Mark scheme

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

1. [Knowledge] Definition of business planning: setting objectives and determining strategies and their implementation to achieve objectives including the use of contingency planning for unexpected events
2. [Knowledge] Planning gives direction to the business
3. [Knowledge] Planning promotes coordination of different parts of business towards a single goal
4. [Knowledge] Helps secure finance from investors
5. [Application] Failure of AEV to meet demand for AEV4
6. [Application] Problems of quality with previous model launches and link to planning
7. [Application] Reference to the two strategic options under consideration
8. [Application] Reference to the expansion of CellX
9. [Application] Reference to R&D and market objectives of AEV
10. [Analysis] Analysis of benefits of planning and consequences of poor planning
11. [Analysis] Failure of AEV to plan appropriately for demand for AEV4 is damaging cash flow and reputation and therefore will lose profits
12. [Analysis] Expansion of CellX factory requires resources – capital and labour – planning necessary to ensure disruption to production is minimised and resources available as necessary
13. [Analysis] Joint venture requires planning to overcome cultural differences between organisations and deal with issues regarding operating in another country, e.g. dealing with the government. How the joint venture is to be managed will need to be established in advance of operations
14. [Evaluation] AEV operates in a dynamic market and therefore planning is essential to ensure the effective use of resources to meet changes in the market
15. [Evaluation] Planning needs to be reviewed in light of changes in the market, e.g. considering impacts of changes in the law and to be constantly updated
16. [Evaluation] Planning is important but without effective implementation success less likely
17. [Evaluation] Planning more likely to be effective if it is agreed so communication with, and involvement of, employees are important