1
25 marks
To what extent does rapid change in the external environment mean that strategic drift is inevitable for a business?
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Strategic Failure (AQA A Level Business): Exam Questions
Exam code: 7132
2 hours9 questions
2
25 marks
Many businesses use contingency planning to prepare for major threats. Some of these contingency plans work well, but others fail to protect the business.
To what extent is the success of a contingency plan for a major threat more dependent on internal factors than external factors?
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3
1 mark
Statement 1: ‘An emergent strategy only occurs in response to external change.’
Statement 2:‘Strategic drift occurs whenever a business changes a planned strategy.’
Read statements 1 and 2 and select the correct option from the following options:
Statement 1 is true. Statement 2 is true.
Statement 1 is true. Statement 2 is false.
Statement 1 is false. Statement 2 is true.
Statement 1 is false. Statement 2 is false.
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4
9 marks
Case Study
Disrupted supply
DT is a UK-based business manufacturing circuit boards which it sells to other businesses. All of DT’s output is exported to Europe. The components that DT uses are sourced in the UK.
The supplier of a vital component closed suddenly in early 2020 disrupting DT’s supply chain. DT’s usual pattern of inventory control for this component is shown in Figure 1.
DT was forced to buy this component from a new and more expensive supplier.
DT stated: ‘We had no contingency plan. It was impossible for us to find alternative supplies quickly enough to fulfil all our existing orders. The new supplies had higher levels of defects.’
Analyse how contingency planning might have helped DT maintain its competitiveness.
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5
24 marks
Read the case study in the Insert (opens in a new tab).
‘Without strategic planning all businesses are doomed to fail.’
To what extent do you agree with this statement?
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6
1 mark
The table below shows four possible scenarios.
Scenario | Managers’ willingness to make internal changes | Likelihood of external changes in market |
A | High | High |
B | High | Low |
C | Low | High |
D | Low | Low |
In which of these scenarios is strategic drift least likely to occur?
Scenario A
Scenario B
Scenario C
Scenario D
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7
1 mark
Strategic drift occurs when a business
implements a plan that has been designed to cope with unexpected and unwelcome changes.
introduces a previously unplanned strategy in response to external changes.
introduces a previously unplanned strategy in response to internal changes.
maintains a strategy that is no longer suited to current circumstances.
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8
1 mark
Statement 1: ‘An emergent strategy is an initially unplanned strategy which arises in box response to change.’
Statement 2: ‘Strategic drift occurs when a planned strategy is continually modified in response to changes.’
Read statements 1 and 2 and select the correct option from the following:
Statement 1 is true.
Statement 2 is true.Statement 1 is true.
Statement 2 is false.Statement 1 is false.
Statement 2 is true.Statement 1 is false.
Statement 2 is false.
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9
16 marks
Read the information below and then answer the questions that follow.
Case Study
Global Airways (GA)
Cabin crew are staff on an airplane who look after the passengers. The managers of Global Airways (GA) have recently proposed new pay levels for cabin crew who join the company from January 2019. Their pay would be lower than the cabin crew already employed by the company. This is part of an effort by GA to cut costs to enable the business to be more price competitive in response to aggressive price cuts by rivals. GA managers believe that cutting the price of its tickets can help to increase the airline’s operating profit margins on its flights.
A trade union, called UAS, represents many of the cabin crew staff. UAS has complained about the proposed pay levels. There has been one meeting so far between the UAS and senior management about the proposal. Managers want the pay deal to go ahead, UAS does not.
Since the meeting:
UAS is considering whether to advise GA’s cabin crew that they take strike action
the managers of GA have arranged to lease planes and use crew from another airline if needed. Managers believe that with these contingency plans GA could operate over 99% of its normal flight schedule
the managers have undertaken new research (Appendix G).
Appendix G New research for GA’s management
Income elasticity of demand for GA flights: +1.5
Estimated annual income changes of GA’s target market 2018–2020: –2%
Cabin crew membership of UAS union has increased this year to 65%
To what extent do you think it is essential for an airline to undertake contingency box planning?
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