Risk Management Oz Assignment

Risk Management Oz Assignment

Risk Management Oz Assignment

Introduction

In age of growing economic leverage it has been seen that the growth of business organization also invites various risk that are associated with their operational activities. For this purpose a proper risk management strategy is to be used which will help the organization to mitigate all the risks related to the business. This helps the company to effectively operate in the market and achieve financial health. In the project, the company chosen is Coca-Cola which is the global leader in soft drink industry. The assignment will evaluate on the all the risk which are associated with the company. 

Stakeholder analysis

Stakeholders are the related parties of the business which are interest in the operational parties of the company. It can be said that the company’s operational activities are also inclined to increase the wealth of their stakeholders (Assessment, 2016). It is seen that the investors, shareholders, customers, government and management are the key stakeholder of company as they are the most interest in the operational activities of the business. The stakeholders of Coca Cola are as follows:

Consumer: It can be said that Coca Cola is consumer centered company as it mainly produced their products for the consumption purpose of the customers so they are one of the main stakeholders of the company.

Shareholder and investors: In the modern era of the company it is seen that the company is collecting a huge amount of their operational capital from the equity capital and the investment made by the partner of the company so it can be said these also are the primary stakeholders of the company (Elmhedwi, Elmabrouk & Sherif, 2015).

Government and other regulatory bodies:

The Company is a global one and is running their business worldwide so it is very important that the company comply with the respect law and order to maintain the ethical environment of business in the particular country.

Explanation of both external and internal risk

In order to gain oversight of the risk revolving around the Coca-Cola it is important that the risks are identified in this case SWOT analysis is one of the most effective tools to identify the risk revolving around the company.

Strength

  • Brand equity
  • Company valuation

Weakness

  • Pepsi as a competitor
  • Product diversification is low
  • Absence in healthy beverage
  • Water management

Opportunities

  • Diversification
  • Developing nations

Threats

  • Indirect competitors
  • Raw material

 

Strength: The Company is brand equity to the highest as the company wan the award for the following in the preceding years. The value of the company is very high which gives the company an upper hand in the market (Hollensen, 2015).

Weakness: The Company has a competitor like Pepsi which is on verge of overtaking Coca Cola with its excessive growth rate. The product diversification of the company is low which shows that the company is weak in the diversified beverage market. The company has not tried entering the market of health beverage which is low point off the company in the modern era of beverages. The company’s water management system is very weak which prevalent weakness is for the company as the sources of water is scarce (Yuan, 2013).

Opportunities: The Company can still diversify in various market of beverage worldwide. The company can also diversify in term of extending their arms in developing nations to increase area of service and revenue generation.

Threats: There are various threats that are around the company one of them being the scarcity of raw material which is water as the scarcity of water is increasing which revolves as major threat to the company. Indirect competitors like Cafe Coffee day and other are indirectly affecting the sales of product.

Critical success factors

Critical success factors are the factors which help in identification of the key element in risk management framework to mitigate the existing risk in the organization. In success factors in an action plan of risk management are the monitoring implementation and assessment of the risk these three are most important and key elements which help an organization to mitigate the risk in an organization. So for having effective risk management plan these components are to be considered.

Identifying the analyzing the risk using risk matrix

 

 

A

B

C

D

E

F

G

H

 

 

commercial relationships risk

economic circumstances risk

human behavior risk

Legislation

management activities and controls

Natural events risk

political circumstances Risk

technology risk

 

 

Not significant

Minor

Moderate

Slightly significant

Significant

Major

Major

Severe

E

Very Likely

 Moderate

High

Very High

Very High

Very High

Very High

Very High

Very High

D

Likely

 Moderate

High

High

High

High

Very High

Very High

Very High

C

Possible

Low

 Moderate

High

High

 Moderate

 Moderate

Very High

Very High

B

Unlikely

Low

Low

 Moderate

 Moderate

 Moderate

 Moderate

 Moderate

High

A

Rare

Low

Low

Low

Low

Low

Low

Low

 Moderate

There are various types of risk that associated with the company Coca Cola and they are as follows:

Commercial relationships:  There's always risk that is related to the suppliers and buyers when the organization tends to increase in size as it becomes hard to calculate the demand and get the supplies for the production process for meeting these demands (Luo, Wu & Duan, 2017).

Economic circumstances and scenarios: The economic situation of the company has been unstable in recent years as the company gained the huge number of liquid assets in the preceding years which increased the company’s. The major amount of the company is majorly dependent on the income from the sides of beverages which has limited the company income.

Human behavior: People in the recent days have been concentrating on health so the sales have been affected through this process.  This is also a risk to the company’s financial health.

Legislation: Although the company has also the legal rights of their business reserved they have faced problem on their products in the recent years.

Management activities and control: The management of the company is diverse because of which coordination remains a weakness.

Natural events: The scarcity of water is major threat to company's market existence.

Political circumstances: the Company is basically on the mercy of FDA and if the FDA’s legislation changes the distribution of the company’s product will effect.

Technology: The Company heavily depends of their machinery to produce and deliver things on time breakdown of which will affect the company’s production

Treatment of prioritized risk

In the above matrix it has been identified that technological risk, circumstances risk management and natural event risk are one of the most likely and severed risk that revolve around the company in the future there are other risk assets that are associated with the company. In order to mitigate these risk a risk management action plan will be undertaken in which the following will be done:

Procedure which will be undertaken: In order to bridge the gap between the suppliers and company a proper communication will be established. To kill the economic risks the liquid asset are to be invested in diverse action which will increase the revenue of the company. Health related beverages are too launched to sales products to health conscious population. An optimization of use of water is well focused which the use of resources will be analyzed and optimized.  To deal with technological risk extra machineries will be bought as backup to production at the time of breakdown of any machine (Solberg et al. 2014).

Responsible for the risk management plan: Teams will be set for implementing controlling the following procedure with Team leaders for controlling and reporting purpose.

Time line: This will take 3 months of time in implementing and controlling.

Monitoring process: The team leaders will be monitoring the whole process and will be reporting progress to their higher management.

Detailing of the monitoring arrangements

As it has been disclosed before the team leaders will be in charge and the latter will be liable to report the progress to higher management. In order to monitor the performance the company will prepare a budgeted result which will forecasted on basis of assumptions and then will compare the actual results to gain an oversight the efficiency of the team in mitigating the risk. The management can comment of shortcoming and try taking necessary steps then (Lafferty & Zhai, 2017).

Evaluating the risk management plan according to the efficiency in treating risk

In the matrix above it has been seeing that the risk have been labeled according to their chances of happening and impact. So the mitigation plan will be active on each and every risk according to their impact on the operational activities of the company (Urban, 2016). It can be said that in this way the company can effectively treat each and every risk as there are different teams with different responsibilities and aims so this will increase efficiency of the risk management plan (Pritchard & PMP, 2014).   

Conclusion

Concluding in the light of the above context it can be said that following the above risk management plan will help the organization to mitigate all types of risk and effectively operate in their market. Risk management plan in this context is very efficient to treat and each and every risk that will impact on the operational activities of the company.

References

1. Assessment, R. (2016). Risk Management Plan. Hertfordshire STEPS, ISL Hertfordshire County Council.
2. Pritchard, C. L., & PMP, P. R. (2014). Risk management: concepts and guidance. CRC Press.
3. Urban, M. E. (2016). Enhanced Capabilities for Subcritical Experiments (ECSE) Risk Management Plan (No. LA-UR--16-22988). Los Alamos National Lab.(LANL), Los Alamos, NM (United States).
4. Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
5. Yuan, H. (2013). A SWOT analysis of successful construction waste management. Journal of Cleaner Production39, 1-8.
6. Luo, T., Wu, C., & Duan, L. (2017). Fishbone diagram and risk matrix analysis method and its application in safety assessment of natural gas spherical tank. Journal of Cleaner Production.
7. Solberg, I. C., Cvancarova, M., Vatn, M. H., Moum, B., & IBSEN Study Group. (2014). Risk matrix for prediction of advanced disease in a population-based study of patients with Crohn's disease (the IBSEN Study). Inflammatory bowel diseases20(1), 60-68.
8. Elmhedwi, T. R., Elmabrouk, S. K., & Sherif, M. A. (2015, March). Practical risk management plan of Wi-Fi network deployment; case study. In Industrial Engineering and Operations Management (IEOM), 2015 International Conference on (pp. 1-10). IEEE.
9. Lafferty, J., & Zhai, C. (2017, August). Document language models, query models, and risk minimization for information retrieval. In ACM SIGIR Forum (Vol. 51, No. 2, pp. 251-259). ACM.