Analyse the benefits to BFB of continuing with a centralised structure as the business develops.

Mark scheme

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

1. [Knowledge] Definition of centralisation: keeping all the important decision-making powers within head office or at the centre of the organisation.
2. [Knowledge] Minimum delegation to managers in other areas, departments or divisions of the business
3. [Knowledge] Rapid decision making.
4. [Knowledge] Consistent policies throughout the organisation.
5. [Knowledge] Decisions taken in the interest of the whole business rather than just one division of it.
6. [Knowledge] Experience of senior managers resulting in better decisions.
7. [Knowledge] Central buying allows for greater economies of scale.
8. [Application] BFB is the market leader in country C success of BFB achieved with centralised structure.
9. [Application] Experience of Aela and John as founders and directors of BFB since 2014. Entrepreneur of the year in 2018.
10. [Application] Linking centralisation to future growth plans of the business including cycling accessories or mountain bikes and developing bikes for consumers aged over 60.
11. [Application] Quick decision making needed to deal with the dynamic external environment faced by BFB.
12. [Application] BFB is a premium brand.
13. [Application] BFB exports to more than 10% of output.
14. [Analysis] Decisions made in interests of the business as a whole will ensure consistency in tactics to support BFB's strategic goals. As a premium brand it is important that there is consistency. Avoid dilution of the brand when introducing new products such as the bicycles aimed at over 60s.
15. [Analysis] Keeping brand image consistent in the different markets will ensure that customers will know what to expect from a BFB product thus increasing sales.
16. [Analysis] New products may be developed more quickly as there is clear direction from head office. Thus BFB can take advantage of market opportunities such as the over 60s market more effectively and this will increase sales and growth.
17. [Analysis] Avoids inexperienced managers making costly errors in their decision making.