Risk Management for NatureCare Products

Running head: RISK MANAGEMENT
Risk Management
Name of the Student:
Name of the University:
Author Note:

RISK MANAGEMENT1
Assessment task 1: Project:
Introduction:
Business expansion is one of the main strategies business organisations adopt to maximise their market share and profit
generation. The business organisation in order to expand their market share and to get access to a larger consumer base, often adopt
the strategy of establish chains of brick and mortar outlets. These outlets cater directly to the consumers and strengthen the place
strategy of the marketing mix of the companies concerned. The second strategy which companies utilise to increase their market share
is to expand their existing product line. However, both the strategies of business expansion by opening outlets as well as extension of
existing product lines attract several market risks. The aim of the report is to analyse the risks which NatureCare Products (case
study) would face while adopting these two strategies. The report would first take into account the risk standards prevailing in the
country followed by an identification of the stakeholders of the company. The next section would analyse the strengths and
weaknesses of the existing retail approach followed by an analysis of critical factor, goals and objectives of the business project. The
last section of the report would take into account the PESTEL analysis. The findings from the analysis would be concluded to end the
report. The Risk Management Briefing Report report in its entirety would be communicated to the CEO, NatureCare Products to
facilitate decision making pertaining to implementation of the two strategies.

RISK MANAGEMENT2
Scope of the risk management process required:
The scope of the risk management process would encompass the following two areas:
Risks involved in opening three new outlets:
Implementation of the strategy of opening of outlets in Sydney, Brisbane and Melbourne would attract several risks. The first
category of risks which the outlets would attract would be political risks. The political risks would stem due to political instability,
changes in laws and changes of rates of customs, taxes and exim transactions. The political risks would make in difficult for the
company to obtain government approvals to open the stores. Similarly, increase in the taxation and customs rates would result in the
company incurring higher expenditures to acquire goods for the new outlets. This increase in cost of acquisition of goods would
actually erode the profit the company earn from the outlets. The second risk which would come within the purview of the strategy of
the three outlets would be risks pertaining to the economic conditions of Australia. The three economic risks which would be
considered would be weakening of the AUD against the international currencies, economic weakening of the Australian market and
supply chain risks. These economic risks pertaining to falling of the value of AUD against international currencies would result in the
company bearing more expenditure to acquire the raw materials. Secondly, falling GDP would result in lowering of the productivity in
the Australian market, which would mean the company would lose both capital and revenue. Similarly, supply chain risks like scarcity
in the raw materials would escalate the expenditure the company would have to procure them, thus once again increasing its
operational costs. The third risk which the implementation of the new outlets of NatureCare Products would social risks. The social
risks which the outlets would face would involve falling per capita income, changing in the preferences among consumers and

RISK MANAGEMENT3
changes in the investment preferences of investors, many of which also be consumers to the company. These three risks would result
in fall in revenue generation due to fall in the sales of products. The two technological risks which the new outlets would face be
advanced technology would render the technology in use redundant and data theft risks. The two environmental risks which the outlets
of the company would be facing would be rising natural calamities and rising environmental pollution. The two legal risks which the
three new outlets would be facing of the IPR risks and crimes like unauthorised communication of business data to unauthorised users.
Risks involved in expansion of product line:
NatureCare Products would face several risks pertaining to expansion of its product line to attract new customers. The strategy
of new product development to attract more consumers would face the similar risks as the strategy of opening new outlets. Assuming
the fact that NatureCare Products would conduct a market research prior to development of the new products, it can be considered that
the company would recognise the aforementioned risks. However, the risk which the new products would likely face would be
technological and legal risks. The technology which the company consider very strongly would be data theft risks. This is because, the
illegal groups aim to steal details about new products from KMS of the companies concerned. The legal risk which is very much
pertinent in case of new product development would be IPR risks. The company should ensure that it adopts adequate protection to
ensure that unauthorised identities do not infringe the IPRs meant for its new products.

RISK MANAGEMENT4
Limitation of the scope of the risk management briefing report:
The risk management process under study would have two limitations. First of all, the risk management strategies would be
restricted to the two strategies namely, opening of three new outlets and new product development. Secondly, the risk management
briefing report would not span over any other strategies of the company.
Alignment of the risk management policies to the risk management standards:
The risk management policies and procedures would be aligned to risk management standards established by the Government
of Australia. NatureCare Products should take into the eleven principles of risk management mentioned in AS/NZS ISO 31000:2009
while forming its central risk management policies (Finance.gov.au. 2019). The following are the steps of the risk management
policies of NatureCare which have been noted below:
1. The risk management policies of M/s NatureCare Products, hereby being referred to as ‘company’ should aim to recognise, reduce
and/or mitigate the risks.
2. The company would aim to ensure benefits of its stakeholders in events of risks to the feasible extent.
3. The risk management operations should commence under the leadership of dedicated personnel at all three levels of the company
namely, upper, middle and lower levels.
4. The risk senior management should form the policies in compliance with the AS/NZS ISO 31000:2009.

RISK MANAGEMENT5
5. The policies in no stage contradict or infringe AS/NZS ISO 31000:2009.
6. The risk management policies should involve all the stakeholders (view table below).
7. The risk management policies should involve all the employees.
8. The risk management would be subject to amendments from time to time.
Legislative and regulatory context of the organisation in relation to risk management:
NatureCare Products should form risk management policies in compliance with the legislative and regulatory contexts in
power in Australia at present and in the future. The company while forming different risks management policies should take into
consideration the laws in power in the concerned area. For example, while forming environmental risks management policies which
the company would face while acquiring land for the outlets, the company should take into consideration the central environmental
law in power in Australia namely, Environment Protection and Biodiversity Conservation Act 1999 (Environment.gov.au. 2019).
Similarly, while forming policies to manage WHS risks, the company should ensure compliance with the Safe Work Act 2009
(Safeworkaustralia.gov.au. 2019). NatureCare Products while forming the IPR risks management policies, should take into
consideration IR legislations formed by IP Australia, Government of Australia (Ipaustralia.gov.au. 2019).

RISK MANAGEMENT6
Identification of internal and external stakeholders:
The risk management policies which NatureCare Products would frame would be prepared consulting both internal and
external stakeholders. Effective management of the potential risks which have been recognised below would require active
participation of the stakeholders. The table lists the stakeholders, the influences, interests and issues which have to be considered
while forming the risk management strategies.
Stakeholders table of NatureCare Products, Australia
Position Stakeholders Influences Interests Issues
Internal
Management of
NatureCare
Products and its
subsidiary
management
divisions
The management of the company would
make risk management policies pertaining
to the two areas namely, opening of outlets
in Central Sydney, Brisbane and
Melbourne and new product development
(scope) Higher profits
Taking up steps
which may
contravene with
the interests of
the other
stakeholders
Internal Employees 1. Implements risks strategies made by the
management.
Performance appraisals,
promotions, higher salary
May resort to
illegal measures

RISK MANAGEMENT7
and professional
opportunities
like data sharing
with
unauthorised
identities
2. Interacts with external stakeholders like
customers and gain information from them
regarding innovations the two areas
recognised in the scope
3. Communicates the feedback from
external stakeholders to managers
External
Government of
Canada at Union
level
1. Forms bilateral agreements with other
countries which allows companies get
access to modern energy management
techniques.
Taxes, Employment
opportunities generation
May penalise or
take actions
against the
company
2. Makes IPR laws which enable energy
management companies protect their
innovations from infringements .
3. Encourages innovation in sustainable
manufacturing of products by providing
facilities like tax rebates and awards.