Risk Management Report - Tesco Plc
Added on 2019-12-28
12 Pages3732 Words1668 Views
ENTERPRISE RISKMANAGEMENTin
EXECUTIVE SUMMARYTesco Plc is the third largest retailing company in the global market and enjoying amarket share of about 28.4% in the UK alone. Some of the major issues which are being faced bythe entity are fall in sales by 1.5%. The risk management process of the entity is undertakenthroughout the hierarchy by maintaining a Group Risk Register. All the separate units of thebusiness are required to undertake a regular assessment of the risks which have the potential toaffect the operations and other pertinent or local risks which are prevailing in the respectivemarket. Some of the principal risks identified by the company are Customer Proposition Risk,Risk/Uncertainty arising from transformation of economic model, Liquidity Risk, ChangingCompetitive Landscape Risk and Data Security and privacy Risk. In order to face each of therisks the company has adopted varied mitigating strategies, which have been evaluated on thebasis of Risk Threshold Probability and likelihood. It has been ascertained that some of thestrategies are unlikely to bring an impact on the operations of the company while there are otherstrategies which shall cause significant impact on the operations of the company.
TABLE OF CONTENTS1. INTRODUCTION.......................................................................................................................11.1 Brief Overview......................................................................................................................11.2 Risk Audit.............................................................................................................................11.3 Situation Analysis and Risk Profiling...................................................................................21.4 Critical Evaluation of Internal and External Risk ..............................................................52. RECOMMENDATIONS .........................................................................................................63. CONCLUSION ...........................................................................................................................7REFERENCES................................................................................................................................8
1. INTRODUCTIONRisk Management is a process which requires the management of business enterprises toapply varied policies and practices in a systematic manner. With the assistance of theseprocedures the company is enabled to identify, assess, monitor, treat and effectivelycommunicate the element of risk among different layers of business. The present report is anattempt to illustrate the risk management process being applied in Tesco Plc. In pursuance to thesame a critical analysis of the existing level of risks shall be undertaken and an effective riskaudit shall be conducted. Lastly, the report shall discuss the risk mitigating strategies and the itsappropriateness in context of both internal and external risks. 1.1 Brief OverviewTesco Plc is a retail entity engaged in merchandise as well as is operating grocery storesin more than 12 nations of Asia and Europe. The company is considered as third largest retailingcompany in the global market and enjoys a market share of about 28.4% in the UK alone (Tescoincreases grocery market share for first time in five years, 2016). Apart from the mentionedprimary business the enterprise is also involved in other operations. One of the major issueswhich are being faced by the entity are that there was a fall of 1.5% in the sales figure after thefamous promotional sale ended in November, 2016 (Tesco – About Us, 2017). This trendcontinued for significant portion of year, which also led to decline in the share prices by 28.3%.another potential crisis situation which corporate was about to face in relation to over-statementof profits in the first half of the year (Tesco reveals it overstated first-half results by £250m,2014). The reason behind this is being stated as overestimation of the money to be received fromthe suppliers. In pursuance to the same the company has suspended around four of its seniormanagers. Further it has also been reported that the company has also fallen out with one of themajor suppliers and the effect of which could be seen on the sales figure in future (Arena,Arnaboldi and Azzone, 2010). 1.2 Risk AuditThe company has undertaken a robust and systematic assessment of the risks which havethe potential to affect the performance of the company in any manner. The risk managementprocess of the entity is undertaken throughout the hierarchy by maintaining a Group RiskRegister (Principle Risks and uncertainties, 2016.). All the separate units of the business are1
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