Evaluate the usefulness of the information in Appendix 1 for the strategic management of MAA.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2022). The mark or mark type is shown in brackets.

1. [1] Explanation of strategic management
2. [1] Place of strategic analysis, choice and implementation
3. [1] Need for accurate analysis and choice for successful implementation
4. [1] Understanding strategic analysis techniques: SWOT, internal strengths and weaknesses and external opportunities and threats.
5. [1] Understanding of different choice techniques: Investment appraisal – ARR measures the average profitability of the investment.
6. [1] Understanding of different choice techniques: Decision trees - inclusion of probability to calculate the monetary outcomes from investments and make choice based on quantitative data
7. [1] Understanding of different choice techniques: Force field analysis – considers driving and restraining factors in a decision
8. [1] Understanding of different choice techniques: Ansoff's matrix – considers risk of growth strategies with reference to product and market
9. [1] Application of the techniques – SWOT, Ansoff, force field analysis, decision trees and investment appraisal.
10. [1] Comparison of the techniques using figures from Appendix 1: Option 2 cost higher ($3.5m against $2m)
11. [1] Comparison of the techniques using figures from Appendix 1: ARR higher for Option 1 by 1% point
12. [1] Comparison of the techniques using figures from Appendix 1: EMV higher for Option 2 by $2.5m
13. [1] Comparison of the techniques using figures from Appendix 1: Lower probability of success for Option 2
14. [1] Linking driving and restraining forces with other issues such as the need to maintain image of the business as a social enterprise.
15. [1] How techniques / data may be used and the advantages and/or disadvantages.
16. [1] Force field analysis encourages managers to consider different aspects of a decision. By identifying restraining forces action can be taken to mitigate the negative effects of those forces.
17. [1] Awareness of relevant forces increases the chances of making a good decision and ensuring that implementation is effective.
18. [1] Better decision making by considering the quantitative aspects of the choices.
19. [1] Use of probabilities in decision tree therefore reducing risk for MAA of option choice.
20. [1] The use of techniques to analyse aspects of the options.
21. [1] Other techniques that might help improve decision making: Core competencies – if MAA focuses on core competencies, then this may increase chances of success due to the strength the business has in certain areas.
22. [1] PEST analysis of markets important to identify potential issues that the firm might need to overcome.
23. [1] Analysis of how information identified might guide strategic analysis, choice, and eventual implementation e.g. short-term impact of higher initial cost of Option 2 balanced against higher risk of failure, but higher EMV
24. [1] Clear judgement as to the usefulness of information in Appendix 1 and strategic management techniques
25. [1] Critical comments on the techniques
26. [1] Difficulty of estimating probability in DTA
27. [1] Estimates of future cash flows in ARR
28. [1] Subjective interpretation of the models – one manager's opinion of SWOT or Ansoff may be very different to another's
29. [1] No weighting of driving and restraining forces
30. [1] Lack of PEST and other strategic analysis information
31. [1] Importance of understanding where the business is now in order to move forward with choice and implementation.
32. [1] MAA operate in a dynamic environment so analysis may quickly become outdated
33. [1] Weighing up comparative importance of all stages in strategic management.