Evaluate whether the information in Appendix 1 is sufficient for the directors of WSC to make the strategic choice between Option A and Option B.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2021). The mark or mark type is shown in brackets.

1. [Note] The focus of this response should be on the sufficiency of the information and the strategic choice techniques rather than only recommending which option to choose.
2. [Knowledge] Strategic choice is part of strategic management and involves the process of identifying and deciding between different options.
3. [Knowledge] Strategic choice follows strategic analysis and is followed by strategic implementation.
4. [Knowledge] Strategic choice decisions are usually long term and difficult to easily reverse.
5. [Knowledge] Strategic choice techniques include: the Ansoff Matrix, Force Field Analysis and Decision trees.
6. [Application] Option A - could be classified as product development or diversification according to Ansoff Matrix.
7. [Application] Option B - could be classified as product development or diversification according to Ansoff Matrix.
8. [Application] Comparison of data in Appendix 1: Initial cost is lower for Option A than Option B by $1.5m.
9. [Application] Estimated time of completion is earlier for Option A than Option B by 9 months.
10. [Application] Force Field Analysis: driving forces and restraining forces for Option A and Option B are different.
11. [Application] Porter's Five Forces: difference in supplier power but both options have high threat of substitutes.
12. [Application] Estimated chance of success for Option A is higher than Option B by 10%.
13. [Application] Estimated monetary value over five years is higher for Option A than Option B by $1m.
14. [Analysis] Decision tree considers risk of decisions being successful and therefore takes into account uncertainty. This quantitative method therefore can be used to make better informed decisions in terms of profitability, which is an important factor in success, e.g. Option A is favoured in terms of higher chance of success and higher monetary return over the five year period.
15. [Analysis] Force Field analysis considers both restraining forces and driving forces, so can be used to encourage managers to make decisions on how to reduce restraining forces. By giving numerical weightings to each force, managers can better determine the likelihood of different options being successful, e.g. higher competitive environment in the fast food market indicates it could be difficult for WSC to successfully enter the market.
16. [Analysis] Porter's Five Forces is useful as a strategic analysis technique to understand the competitive rivalry in the market. The high threat of substitutes in the market indicates the threat to WSC's profitability if it enters the market. Directors could use the difference in supplier power to help distinguish which option, i.e. Option A is favoured as it has less competitive rivalry based on the two forces referred to. The other forces are relevant to the decision.
17. [Analysis] Information that is missing from the table could also be helpful for the directors to making the decision, e.g.: Investment appraisal techniques would give additional information on which to justify the decision made.
18. [Analysis] SWOT and PEST could be helpful to understand the influence on the external environment in making the decision.
19. [Evaluation] Appendix A includes a variety of information that might be useful in helping the directors to choose between Option A and Option B.
20. [Evaluation] The market is dynamic, and the information needs to be kept up to date to make it more useful.
21. [Evaluation] Other information that could be useful includes market research.
22. [Evaluation] The data will be more useful if the directors can be sure of its accuracy.
23. [Evaluation] The data is useful to help the directors discuss the options and decide, but it depends on the ability of the directors to critically discuss the options.
24. [Evaluation] Judgement about the sufficiency of the information in Appendix 1.
25. [Evaluation] The data is insufficient in terms of the information available as there is little reference to strategic analysis techniques such as SWOT and PEST as only Porter's Five Forces is referred to.
26. [Evaluation] The data is given in an abridged format and lacks detail which is needed in order for the directors to be able to make a more informed decision. It depends on whether the more detailed information is available for the directors to access.
27. [Evaluation] It depends on who collected the information and the sources used to evaluate its reliability and subjectivity.
28. [Evaluation] It depends when the data was collected as it could be outdated.