Business Risk Discussion 2022

Running head: BUSINESS RISK
BUSINESS RISK
Name of the Student:
Name of the University:
Author Note:

BUSINESS RISK1
The aim of this paper is to discuss risk factors that prevents the ability of the company
to meet the target and achieve the financial goals. As the companies gain support from
different sources and exploit all the available opportunities before them, they also face some
business risks which curb their growth in any industry or market. The business however tries
to enter those markets where they have the opportunities to gain advantage from every
internal as well as external environment and avoid those markets which may threat the
growth or survival of the company. Due to this reason, the risks also come from different
environment and manipulate the companies from different sources. These risks harm the
companies in such a way that the company cannot shelter itself completely. In this regard, the
companies either analyse the internal and external environment before entering the new
market or lay strategies for mitigating the risks to affect the successful business of the
company. In order to understand the impact of risks in the market, most of the companies
mainly focus on the four methods which include strategic risk, compliance risk, reputational
risk and operational risk. In those case, the market where the organisation is already
operating, need to focus on the operational risk as the external factors affect the operation of
the company.
South Africa is an important market for business that allows the company like Ford
Motor Company to utilise the abundant raw materials there along with the cheap labour force.
The company has been operating in the South African region since 1923 with it’s headquarter
situated in Port Elizabeth (Ford.co.za, 2019). Despite the fact that the company has been
operating for long in this market, it is as venerable as other or new automobile company
operating in the same market. There are several factors present in the country of South Africa
that effectively harm the successful business of Ford Motor Company in the market. In
operating in the South African market any company like Ford can face risks in the factors like
infrastructure, operational insufficiencies, human resources, costs and legal frameworks.

BUSINESS RISK2
Infrastructure:
To many of the companies operating in the South African market, the low quality
infrastructure has been one of the most threatening factors of successful business in the
market. Starting from the transport infrastructure, cross border trade facilities to energy and
power management, all these basics facilities of the market are not properly fulfilled by the
government of South Africa (Brink, 2017). The situation is so much problematic as the
political situation of the country is clouded by corruption and intolerance. The political and
administrative situation of this particular market is affected by the mismanagement of the
government, and popular protests and supporting of violence for serving interests. Thee
political uncertainties are reflected in the foundation and management of the needed
infrastructure in the market that can attract the companies from the other parts of the world or
for that matter the existing companies to mitigate any risks. The infrastructure related to the
maintenance of the business climate or environment is also related to the arrangements of the
raw materials for the foundation and growth of the business. The poor infrastructure of this
market has put the company to face risks. Moreover there are problems in the development of
technological infrastructure for increasing communication system in the different
departments of the company.
Operational inefficiencies:
South Africa in terms of nominal GDP, is the 34th largest economy in the world and
pertains a system of mixed economy. The tax structure of this country includes personal and
professional taxes. Every company has to have a particular tax structure which they obey but
the operation of the companies are mainly prevented by the costs of transportation of the raw
materials and giving toll fees (Burke & Clark, 2016). The corruption level in the
administrative level is high therefore, the business do not get permission for acquiring the