Minimizing Risks And Prioritization Plan For Blue Horizon – Assignment 2

Timing risk

This risk is related with travelling long distance, which may disappoint the customer. If Blue horizon is opening outlets in very remote places then it will not be economically beneficial for them to travel such long distance (Jain et al. 2013). Even they will not be willing to lose so much time in travelling as they have other works in their hand the suppliers will also not be willing to supply raw materials to such long distance on a regular basis.

Margin risk

The purchase and re-branding of existing Stirling’s cafe in red hill will give rise to availability of branded materials and quality chefs. There is only chef in the store and in case if the chef is not able to attend any day due to any emergency then the café will not be able to provide good quality foods to their customer.

Financial risk

This risk is associated with the banking system. There is a bank two building away the café but the stirling’s family bank is away couple which makes it inconvenient to deposit excess cash remaining in the store every. So, there is a high chance of cash embezzlement as almost $4000 remains in the cash box overnight at the café premises.

Environmental Risk

This risk is associated with water storage and usage. The store uses 41500 liters of water weekly. There is a lot of wastage of water in the store as the vegetables and fruits are washed under a fast running tap, the dishwasher starts washing when it is only half-full ( Simwinga 2015). Due to single flush system in toilet and regularly watering the plants in courtyard lot of water is wasted which is a major environmental issue related to the store.

Timing risk

This type of risk will result in loosing of customers. The managers will not find it suitable to travel 130 km to attend weekly meetings in Red hill since most of the meeting did not complete within evening. Supplies of pastries to such long distance will deteriorated its quality and it may not remain fresh.

Margin Risk

Non-availability of branded material and good quality chefs in Red hill will result in decline in the quality of the food and will lose customers in long run (Berkyto et al. 2014). Most of the local customers come to the store because of its quality and if Stirling’s café is not able to maintain it then it will be difficult for Blue Horizon to maintain its brand name in future.

Financial Risk

If cash remaining at the store at the day end is not deposited on a daily basis then there will be high chance of theft of cash. Embezzlement can be done by the outsiders or even by the internal staffs. The stores will also lose interest on cash not deposited in bank.

Environmental Risk

If the local authority or government comes to know about the wastage of water in the store then they put a restriction on the even cancel their license if this becomes a major issue.

Timing risk

The store must try to attract local customers residing there by giving attractive offers. It must also give benefits to managers who are organizing local corporate meetings in the café. The store must give unlimited access of wifi so that managers can attend live conference with persons at distance places. Stirling’s cafe must focus on the supply chain for timely delivery of food product so that it remains fresh when serves to customers (Hoffmann 2012).

Margin risk

Stirling’s café should enter into agreement with branded food suppliers so that raw material is supplied on a regular basis and Just in time by providing them with various benefits (Robinson 2013). The store must advertise to appoint some good quality chefs offering them good remuneration as there is only one chef .

Financial risk

Stirling’s café should open its account in the bank, which is just two building away from the store so that they are able to deposit the remaining cash in the store every day in their bank account (Tracy et al. 2014). This will reduce the chance of cash theft or loss.

Environmental risk

The sore must reduce its consumption of water by minimizing wastage of water. They should implement dishwasher which starts washing when it is full, multiple flash system in the toilet and low speed tap for washing vegetables and fruits. Watering of plant should also be minimized to save misuse of water

Rank

Risk

Importance

1.

Environmental risk

This is the most vital risk associated with the store as local authority has implemented a fine of $50000 for misuse of water. The management of  Blue horizon must install the water tank in the store immediately as there is a lot of water wastage in Stirling’s cafe.

2.

Margin risk

This is the second most vital risk associated with Stirling’s café. It branded supplies and good quality chefs are not available then the store will lose customer and they will not be able to survive in the market (Green 2015). So this risk must be the major priority of the Blue horizon management

3.

Financial risk

It this risk is not nullified then cash lose will affect the store immensely and management will have a negative impact on the staffs of the store. Interest loss on cash not deposited is also a major financial loss to be dealt crucially by the management

4.

Timing Risk

As the managers are not willing to attend weekly meeting by travelling long distance the store is losing business. Also proper supplies are not available due to distance problem. These are very crucial risk associated with the store and management of Blue horizon must deal with these properly.

Respected Mr. Penny Binskin,

According the decision made by the management of Blue horizon to acquire Stirling’s cafe the analysis of various risk associated with it is to be analyzed first. Four risks have been identified and assessed based on which following suggestions are given to minimize the risk.

The management of Blue horizon must immediately install a water tank to minimize water wastage, open a nearby bank account to minimize the chances of cash loss and theft, make agreement with suppliers for

timely delivery of supplies, appoint chef with high skill, knowledge and experience to increase its food quality.