International Business Management

This document discusses the cyber attack on State Farm and the legal and political risks faced by Woolworths in Australia. State Farm was hit by a credential stuffing attack, while Woolworths faced a class-action lawsuit due to a drop in share prices in 2015. The document highlights the measures taken by both firms to mitigate the risks and avoid such attacks in the future.

Running Head: INTERNATIONAL BUSINESS MANAGEMENT
International Business Management
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Author’s Note:

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INTERNATIONAL BUSINESS MANAGEMENT
Question 1
Business media source: https://www.zdnet.com/article/state-farm-says-hackers-confirmed-
valid-usernames-and-passwords-in-credentials-stuffing-attack/
Name of firm/organization: State Farm
Discussion:
Cyber crime continues to be one of the biggest threats to businesses around the world.
According to a report by ZD Net, a business technology news portal, US banking and insurance
firm, State Farm was hit by a credential stuffing attack in July (Cimpanu 2019). Credential
stuffing is a form of data breaching cyber attack, whereby the attacker steals the username and
password combinations of a number of accounts to get unauthorized access. According to State
Farm, the attacker confirmed the usernames and passwords of the accounts of the victims.
However no personal information was compromised and the company did not report any case of
fraudulent activity from any of the confirmed accounts. Customers used these accounts to pay
bills, transfer funds and access and manage insurance claims.
State Farm claimed that it reset all passwords of the affected accounts as soon as possible
to avert any possible damage or theft. They further said that they implemented additional cyber
control methods and continued to evaluate their information security strategies to avoid such
attacks in future (Cimpanu 2019). The firm repeatedly requested customers to update and set up
new, unique passwords as frequently as possible and use multi-factor authentication to ensure
maximum security against credential crackers and other such online threats.

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Question 2
Name of country: Australia
Name of firm/organization: Woolworths
Discussion:
Legal problems and risks are something every long term business organization faces
during their functioning. Australian supermarket chain Woolworths faced a class-action lawsuit
due to a drop in share prices in 2015, that was initiated by a sudden profit downgrade (Chung
2019). The charges claim that the company in violation of the Corporations Act, failed to inform
investors of the significant risks related to its profit projections. Woolworths predicted in August
2014 that its financial year-15 profit would increase by 4-7 percent (Chung 2019). However, the
profit guidance revision on February 27 showed a shocking plunge in Woolworths shares
resulting in a loss of 13.7 per cent of value (Chung 2019), within two days.
Maurice Blackburn, a law firm which set up an online registration portal for the affected
shareholders, predicted the claim to exceed $100 million (Chung 2019). In response Woolworths
decided to give further flexibility to shareholders for making requisite investments to deliver
long term plans and create associated shareholder value.
Political risks also pose a big threat to businesses that can slow down profits or impact
their functioning. According to a report of investors, Growth of Woolworths in the first half of
2017 was impacted by unfavourable trading conditions in South Africa and Australia, which was
a result of political uncertainty. The income per share of the company was reduced by 7.6%.
Expecting the market conditions to be constrained, the company introduced certain structural

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changes in their operations in the affected countries. They focused on their food division as
lower food inflation the second half of the year led to return of positive growth.
Reference List:
Chung, F. (2019). Woolworths faces class-action lawsuit. [online] NewsComAu. Available at:
https://www.news.com.au/finance/superannuation/woolworths-faces-classaction-lawsuit/news-
story/db3e1f1f1f6ac9aa059d78034c63ef64 [Accessed 8 Aug. 2019].
Cimpanu, C. (2019). State Farm says hackers confirmed valid usernames and passwords in
credentials stuffing attack | ZDNet. [online] ZDNet. Available at:
https://www.zdnet.com/article/state-farm-says-hackers-confirmed-valid-usernames-and-
passwords-in-credentials-stuffing-attack/ [Accessed 8 Aug. 2019].