This report is going to outline an efficient risk analysis for a medium sized Australian company that is based in Brisbane. The company has specialized in the manufacturing of skin care products which are usually of high quality. This business was established purposely to cater for the increasing demand for skin products because of they are eco-friendly. There mode of packaging is also eco-friendly which attracts most of the Australians. The company wishes to expand its operations through establishing a chain of retail outlets in Sydney, Brisbane and Melbourne. As a result, risk analysis is very crucial so as to formulate effective strategies to enhance the achievement of the stipulated goals and objectives. Risk management process shall involve risk identification, risk analysis, risk evaluation, risk treatment and monitoring and reviewing the risk (Valsamakis, Vivian and Du Toit, 2010). A PESTEL analysis shall also be conducted so as to evaluate the external factors that may impact the business in several ways and approach them appropriately.
According to (Bessis, 2015) Business expansion comes with various associated risks. Some of the risks that the company might face in the process are:
Financial risks
Expansion needs sufficient capital which might be a disadvantage for the business. The company has to thoroughly determine the financial sources that shall facilitate the expansion process to enhance the achievement of the objective.
Legal risks
The government might have regulations on the number of similar businesses to be established in similar region by individuals hence the company needs to ensure that it is not violating such regulations in the process of expansion.
Labor risks
Expansion might result to the need for more number of employees in the various retail stores. The company must evaluate the rate of labor supply in the predetermined areas so as to avoid shortage of labor that may have an adverse effect to the success of the business.
Experienced employees
These employees have adequate knowledge on the factors that affect the business due to their long service in the organization hence they would be efficient in identification of the potential risks together with the strategies for mitigating the risks.
External stakeholders for risk identification
The consumers
They are significant in risk identification because their consumption behavior play a critical role in the determination of expansion strategies.
The company wishes to obtain a large market for its products hence the need for expansion to enhance product accessibility by consumers in the desired regions.
The company seeks to increase the production of its products hence the need for expansion so as meet the consumer requirements in the regions
The company seeks to promote environmental conservation through the increase of eco- friendly product in the market.
The company aims to promote healthy skin for most of the Australians in the desired regions. This is because most of them have skin problems due to their race hence the skin care products would be of great help to them.
Political factors
Political stability in Australia shall enhance the business expansion. The freedom of trade in Australia implies that organizations can invest in any part of the country hence facilitating the expansion process.
The stability of the Australian economy implies better price for the products in those localities.
Most of the Australians prefer eco- friendly products which is a direct implication of the success of the company after the expansion takes place.
Increased accessibility of the internet by many people requires the company to make use of the online purchasing practices rather than just focusing on the expansion of the company.
The product have minimal impact to the environment which attracts most of the customers. Expansion shall be efficient due to the great interest of Australians for the product.
The business expansion should be in line with the business laws for efficiency.
Strength
Great interest of Australians on eco-friendly products.
Wide market due to large population and stable economy
Weaknesses
Lack of adequate utilization of the technology through e-commerce as the organization do not have an online purchasing platform.
References
Bessis, J. (2015). Risk Management in Banking. 4th Ed. New York, NY: John Wiley & Sons, p.68.
Kumar, L. (2014). Financial Risk and its Mitigation. SSRN Electronic Journal, 4, pp.46-76.
Philips, R. (2010). Rapid Training Development. 3rd ed. John Wiley & Sons, pp.56-89.
Simonovic, S. (2012). Risk management. 3rd ed. Cambridge: Cambridge Univ. Press, p.46.
Valsamakis, A., Vivian, R. and Du Toit, G. (2010). Risk management. 3rd ed. Sandton: Heinemann, p.45.
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