Evaluate the effectiveness of using SWOT analysis to ensure that GR's growth strategies are appropriate.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2020). The mark or mark type is shown in brackets.

1. [K] Explanation of SWOT as a strategic analysis technique
2. [K] Strengths, Weaknesses, Opportunities, Threats
3. [K] Helps understand the internal and external environment
4. [K] Helps decision making and identifying growth strategies
5. [K] Place of SWOT within strategic management
6. [K] Explanation of other strategic analysis techniques – PEST, Boston Matrix, Porters 5 Forces, core competencies e.g.
7. [K] Core competence: The main strengths or strategic advantages of a business.
8. [K] Porter's five forces analysis includes: buyer power, supplier power, threat of substitutes, ease of entry and competitive rivalry.
9. [K] Need to understand the external environment – requiring a detailed PEST analysis
10. [K] Following strategic analysis strategic choice techniques used to choose strategy
11. [APP] Exploration of range of factors contained in Appendices in particular:
12. [APP] Strength of low gearing may enable GR to pursue higher capital cost strategies (such as Strategy 1)
13. [APP] Linking strength of branding to possible success of strategy 1 or 2
14. [APP] Opportunities: allows comparison of potential growth in different markets e.g. restaurant market 3% and chilled meals of 10%
15. [APP] Identifying weaknesses of labour turnover and demotivated employees allows GR to deal with these problems
16. [APP] Knowledge of threats helps GR plan to for changes in the legal environment for example zero hour contracts
17. [AN] The time, money and effort needed to conduct SWOT analysis and impact on GR
18. [AN] Effective SWOT analysis may result in clearer and more relevant business objectives, better strategic decisions and less risk as GR will be better prepared for the future
19. [AN] How SWOT analysis will improve business planning and decision making thus reduces risk
20. [AN] Analysis of how changes identified might guide strategic decisions
21. [AN] Focus on strengths will reduce risk to the business
22. [AN] Identification of consequences of weaknesses such as demotivated employees for alternative strategic options
23. [AN] Anticipating changes to the external environment such as an increase in minimum wage and how that impacts costs of different strategies e.g. strategy 2 is more labour intensive
24. [EVAL] Clear conclusion as to the effectiveness of SWOT analysis
25. [EVAL] Recognition of weaknesses of demotivated employees and labour turnover may have greater significance in likely success of strategy 2 compared to strategy 1 as customer service more important to restaurant success
26. [EVAL] Using only SWOT may be insufficient to identify appropriate strategies. Other strategic analysis and strategic choice techniques are also important:
27. [EVAL] Understanding the restaurant market through appropriate PEST analysis will inform GR's decisions and improve effectiveness of strategy choice
28. [EVAL] Understanding core competencies will enable GR to focus on strategies that GR will have a competitive advantage in and therefore are likely to be more successful
29. [EVAL] By using Porter GR can assess the threat of substitutes etc to decide whether Strategy 1 or 2 is better. This will reduce the risk of entering the wrong market
30. [EVAL] Decision tree, investment appraisal, Force Filed Analysis, Ansoff's Matrix. If these are developed it may lead to additional EVAL marks
31. [EVAL] Importance of understanding where the business is now in order to generate ideas and/or support for expansion
32. [EVAL] Weighing up importance of other stages in strategic management especially objectives and choice techniques in relation to strategic analysis
33. [EVAL] Depends on: How up to date the SWOT analysis is
34. [EVAL] Depends on: Subjectivity of individual conducting the SWOT analysis
35. [EVAL] Depends on: How comprehensive and detailed the analysis is