Discuss the importance of FE's Directors developing a detailed corporate plan before implementing strategies for future growth.

Mark scheme

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

1. [K] Definition: A corporate plan is a detailed report on a company's future long-term aims / objectives and the strategies it will follow to achieve them.
2. [K] A business / corporate plan: Gives direction to the business. The plan provides FE directors with a clear focus for what the company should be trying to achieve in the medium term.
3. [K] Helps motivate staff. It provides a sense of purpose.
4. [K] Enables planning at different levels of the business and ensures all staff are working towards the same goals.
5. [K] Acts as a means for control and review. Actual outcomes can be compared with the objectives set and the performance of FE can be assessed.
6. [K] Helps ensure that resources are used effectively and that all departments are working together.
7. [K] The planning process itself is useful. It encourages directors and managers to consider the current situation of the firm and to set objectives accordingly.
8. [K] How dynamic markets may undermine plans
9. [K] Potential link between profitability and having clear business plans.
10. [K] Planning of finance (sources and time-scales) will impact on expenses which can affect profitability
11. [APP] Lack of planning when entering the household market has resulted in poor performance and failure to meet objectives
12. [APP] Contingency planning may have been important to minimise the damage to FE
13. [APP] Need for planning re: expansion through factory in country P or takeover of Southvolt
14. [APP] Demand for renewable energy growing rapidly. To be responsive FE will need to plan new factories in advance of changes in the market
15. [AN] Planning is time-consuming and can be expensive, the more detail the greater the time and cost
16. [AN] Benefits of direction given for employees and their motivation linking to efficiency and achievement of objectives
17. [AN] SWOT analysis / Porter's Five Forces and links to effective decision making regarding expansion. Analysis will reduce risk to FE in its decision making and thus help to ensure profitability.
18. [AN] Takeover of Southvolt is moving into a different product market. Planning will help reduce the problems associated with takeovers such as clash of cultures.
19. [AN] Business planning will support application for finance from financial institutions.
20. [EVAL] As there is a dynamic business environment, there is a need to adjust plans accordingly
21. [EVAL] Needs to be flexible and adaptable to meet new situations.
22. [EVAL] 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.
23. [EVAL] Monitoring and review essential to ensure costs are not increasing in this rapidly changing market.