Discuss the usefulness of strategic choice techniques for the directors of CSP when making a choice between options A and B.

Mark scheme

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

1. [1] Meaning of strategic choice
2. [1] Ansoff, force field analysis, decision trees as SC techniques
3. [1] Investment appraisal techniques: payback, ARR & NPV as SC techniques
4. [1] Link with other aspects of strategic management (e.g., SWOT and PEST, Porters 5 forces, Boston Matrix, Core competencies, vision and mission statements, as strategic analysis techniques when preparing for choice)
5. [1] Option A is potentially market development but accept market penetration
6. [1] Option B product development/diversification
7. [1] Use of the techniques/factors for two options (A and B)
8. [1] Comparison of options using the techniques. For instance comparison of likely risks/returns
9. [1] Probability of success for B is lower
10. [1] EMV for B is higher
11. [1] Understanding of driving forces
12. [1] How techniques may be used and the advantages and disadvantages
13. [1] Decision trees – estimation of probability difficult. Use of probability aims to take account of uncertainty resulting in better decision making
14. [1] Ansoff's Matrix – focus on risk of different strategic options
15. [1] Force field analysis – subjective. Encourages consideration of a range of factors. Managers may manipulate to favour one option
16. [1] Investment appraisal (e.g., NPV allows time value of money to be taken into account so business can see if project covers costs and makes a return)
17. [1] Payback important to businesses that face cash flow problems
18. [1] ARR. Key metric for judging business success is profitability
19. [1] Limitations of techniques, e.g. role of estimation
20. [1] Very dynamic nature of this market. Link to probabilities could be made and their likely accuracy
21. [1] Other information that could be useful? Qualitative information needed
22. [1] Impact of management objectives and attitudes
23. [1] Long and short term impacts