Financial Risk Management Strategies-Free Samples For Students

Question:. Discuss About the Financial Risk Management Strategies? Answer: Introducation Fadjo will be the name of the store, which will cater to the needs of the customers located within 2km of the location of the store. The store will be launched on 15th of August 2014. The local residents will find it convenient to select variety groceries from the store (Park et al. 2013). This contradicts the trouble the residents would have encountered if the store would have been in some distant location. The location of the store would be Brighton Drive; which is a 250 square feet plot comprising of coffee shops and restaurants (Haimes 2015). The customers will get to choose from variety of products, such as bakery, butcher, fruits, vegetables among others. Business scope Approval in terms of re-installing the basic amenities would establish authenticity in terms of the business plan. Within this, marbles would be put in the floors and general coating of paints would be applied on the walls (Lam 2014). Along with this, fittings of the furniture, such as fridge, aisles, check-outs would be ensured. The display cabinets would also be a part of this evaluation. Prior to this, approval would be taken in terms of the hosen site. Approval from the statutory body of legislations is of utmost importance in terms of operating the store (Turner 2014). Business objectives To utilize the initial investment offer of $250,000 provided by the business partner and owner for achieving profitability in business by operating the store in an efficient and effective manner Expanding the market share- Catering to the everyday needs of the local residents Emphasizing on customer service (Glendon, Clarke and McKenna 2016) Adopting social media Carrying out promotional programs like charities, donations (Serpella et al. 2014) Establishing the context AS/NZS 31000: 2009 will be used for implementing the risk management strategy. The following are the contexts on which the risks need to be identified: Internal context- business partners, financial context, marketing and the staffs (Olson and Wu 2015) External context- customers, suppliers, financial institutions, pre-existing shops in the locality Risk management context- financial risks, training to the staffs for the effective handling of the risks (Meyer and Reniers 2013) Risk criteria Identification of the potential risk Speculation of the targets of the store Establishing a benhmark level for mitigating the intensity of the risks (Rockafellar and Uryasev 2013) Equal distribution of the raw materials Bearing in mind, the interest of the stakeholders and shareholders would project the feasibility and appropriateness of the newly launched store. Moreover, it would fulfill the following objectives: Adherence and compliance to the rules and regulations (Wu, Chen and Olson 2014) Achievement of more than 10% profit Limitation of 5% of the budget costs (Bromiley et al. 2015) Zero turnover rates Adopting surveys and feedbacks for achieving customer satisfaction and expanding the business of Fadjo Evaluation would prove beneficial for the fictitious company in terms of tracking their progress in terms of attaining the benchmark level of performance (Bahr 2014). Relevant Stakeholders Stakeholder Identification Internal stakeholders External stakeholders Business partners Local residents General Manager Customers Staff/personnel Suppliers Property owner Financial institutions Council Competitors Stakeholder analysis After identifying the key stakeholders, consideration of their interests would be a wise step for the personnel (Bromiley, et al., 2015). Keeping in mind the following grounds helps the personnel to achieve positive outcomes: For business partners, the grounds are: Business profitability Increase on investment returns Achievement of sustainable growth (Deng et al., 2014) For the staffs, the following grounds are important: Reasonable working hours Work loads Salary Safe and comfortable working conditions Performance appraisals Sufficient and adequate training Timely payment of salary (Enshassi and Mosa 2015.) The following grounds results in an efficient and effective selection of the general managers: Management of the day to day sales operations for the achievement of large sale customer satisfaction Consideration of the factors such as traffic, noise disturbances helps the personnel to identify their stakeholders from the local residents. For the suppliers, the following grounds prove fruitful: Timely payments Stability in dealing with the voluminous supply and demand (Glendon, Clarke and McKenna 2016) Adoption of lucrative schemes for expanding the business For the customers, taking into consideration, the following points brings positivity for the business: Strong and flexible customer service Variation within the products and services Value for money (Haimes 2015) For property owners, the following points are considered: Longevity in the lease contracts Timely payments by the tenants caring approach of the tenant towards the property Provision of loans on the interest rates is taken into consideration in ase of selecting the financial institutions as the key stakeholders (Hopkin 2017). Securing a larger customer base for indulging into fair competition with the contemporary brands authenticates the selection of competitors as the key stakeholders. Presence of compliance to the standards and norms of the regulatory framework justifies the selection of councilors in terms if stakeholder selection (Islam, Mouratidis and Weippl 2014). Communication and consultation The following projects the benefits of the engaging the stakeholders into the decision-making process of risk management: Extracting information and provision of relevant data to the stakeholders (Kapur and Pecht 2014) Catering to the needs, demands and requirements of the stakeholders Identification of the skilled and efficient experts for the effective management of the encountered risks Identification of the risks, which might act as an obstacle in the initiation of the business Spreading awareness about the intensity of the identified risks (Kerzner 2013) Conjoining the identified stakeholders and their interests results in the establishment of a communication plan, which is as follows: Low Power/ Low interest stakeholders Mass address will be adopted in this category for providing enthusiasm to the stakeholders through interactions (Lam 2014) Low power/High Interest stakeholders Communiation is frequent as there is high interest on the business activities. The major highlight of this group will be the promotional activities instead of the business strategy and the finances (Le et al., 2013). Social media, newspapers and emails will be used for communication High Power/Low interest stakeholders Formality and specificity will be maintained in this group with the help of letters and email. Communication will be made as per the requirements as the interest level is low in terms of the day to day activities of the store (Leveson 2015). References Bahr, N.J., 2014.System safety engineering and risk assessment: a practical approach. CRC Press. Bromiley, P., McShane, M., Nair, A. and Rustambekov, E., 2015. Enterprise risk management: Review, critique, and research directions.Long range planning,48(4), pp.265-276. Deng, X., Low, S.P., Li, Q. and Zhao, X., 2014. Developing competitive advantages in political risk management for international construction enterprises.Journal of Construction Engineering and Management,140(9), p.04014040. 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