Evaluate the importance to WSC of effective corporate planning if Option A is chosen.

Mark scheme

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

1. [Knowledge] A methodical plan containing details of the organisation's objectives and the strategies to be followed to achieve them.
2. [Knowledge] Corporate planning is a type of strategic planning and is included in the business plan.
3. [Knowledge] Corporate planning involves setting objectives and deciding strategies to achieve the objectives.
4. [Knowledge] Corporate planning is part of strategic implementation.
5. [Knowledge] Aims in a corporate plan can be used to set functional objectives and strategies.
6. [Application] The corporate plan needs to be updated and made specific for Option A, given it is a different venture as WSC is entering the fast food street food café market.
7. [Application] WSC's core competency is spice production, not cafés. Although they are related, the plan would need to be updated.
8. [Application] Highly competitive fast food market.
9. [Application] The need for $3.5m finance for the project.
10. [Application] Completion time is 9 months.
11. [Analysis] Effective corporate planning would allow WSC to devise appropriate strategies to enter the highly competitive fast food market, e.g. choosing appropriate pricing strategies and promotional activity.
12. [Analysis] Corporate planning is important for Option A to support applications for finance to raise the $3.5m. WSC can consider relevant factors such as gearing, liquidity and the impact on shareholders of different sources of finance.
13. [Analysis] The corporate plan is important to ensure that the completion time is kept to 9 months by setting clear targets for managers and employees and to limit the risk of extra costs being incurred because of delays if effective planning was not undertaken.
14. [Analysis] Time targets can be motivating for staff and are more likely to be achieved, which could save time and money for WSC.
15. [Analysis] The corporate plans will help to focus on the need to overcome the limited knowledge and experience in running fast food restaurants. Therefore, directors could ensure that they find out about how to effectively run these restaurants, e.g. recruiting and retaining experienced employees and managing operations.
16. [Analysis] Planning helps to control expenditure and therefore reduces risk of cashflow problems.
17. [Analysis] Strategic decisions affect all parts of the organisation, so planning is important to coordinate activities.
18. [Analysis] Planning is time-consuming and can be expensive; the more detail the greater the time and cost.
19. [Evaluation] Judgement on the importance of corporate planning if Option A is implemented.
20. [Evaluation] It is essential to set objectives and to monitor these closely.
21. [Evaluation] Recognition that other factors, such as leadership and management, will influence success.
22. [Evaluation] Depends on whether the corporate plan is kept up to date and is monitored closely by managers.
23. [Evaluation] Depends on how dynamic the market is and the actions of competitors.
24. [Evaluation] Depends on how differences in culture are managed in the takeover and how resistance to change is managed.
25. [Evaluation] Contingency planning is necessary to deal with the unexpected but can be expensive.
26. [Evaluation] 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.
27. [Evaluation] Monitoring and review are essential to ensure costs are not increasing in this rapidly changing market.