Risk Management for SFL and PI Companies Relationship

RISK MANAGEMENT 1
RISK MANAGEMENT
Name of student
Name of institution
Name of instructor
Date

RISK MANAGEMENT 2
Executive summary
The report focusses on the relationship between SFL and PI companies. SFL deals with the
production of organic skin care products and PI is the major customer of the products. Both PI
and SFL have traded for a long time and to strengthen the relationship, the companies have
employees Sophie as the relationship manager. Sophie has the duty of ensuring that PI gets better
terms such as longer credit periods and larger discounts on the products.
However, SFL has complained that various decisions taken by Sophie hurt other customers. For
example, Sophie ordered the production team to make products for PI before meeting other
customer orders. Additionally, Sophie has negotiated larger discounts and longer credit periods
for PI, which could have a negative impact on the profits. Therefore, the report identifies the
risks posed by Sophie and gives recommendations to avoid the problems.

RISK MANAGEMENT 3
Table of Contents
Executive summary..........................................................................................................................2
Introduction.....................................................................................................................................3
The potential risks arising from the appointment of a client manager............................................4
A weakness in the implementation of projects.................................................................................5
Loss of personal touch.....................................................................................................................5
The failure of e-commerce systems..................................................................................................5
The lack of a suitable brand............................................................................................................6
The risk of overreliance...................................................................................................................6
The impact of the customer manager risks to SFL..........................................................................6
Recommendations to minimise the risks and threats.......................................................................8
The development of a cross-functional team...................................................................................8
An efficient management information system..................................................................................9
The synchronisation of objectives....................................................................................................9
The signing of performance contracts.............................................................................................9
Conclusion.....................................................................................................................................10
Bibliography..................................................................................................................................11

RISK MANAGEMENT 4
Introduction
Santé Future Limited (SFL) manufactures organic skin-care products. The company ensures that
the products meet the high-quality standards required in the market. Santé Future sells the
products to both the wholesale and retail markets. Over the years, the company has grown in size
by selling products to health stores in high-income regions of France. The French consumers
have the perception that the local products do not meet the required quality and do not will to pay
much. However, Santé Future Limited has a clientele that buys the products at a high price due
to the high-quality offered.
Santé Future Limited has Pharmaceutique Inc (PI) as the sole major customer. PI distributes
health food products to international markets and has a reputation for selling high-quality
products. Santé Future Limited started selling to PI in just under twelve months with PI buying
small amounts to assess the levels of demand. However, PI has begun placing larger orders,
which currently accounts for 40% of SFL’s turnover.
SFL has an organisation structure with both operational and non-operational departments. The
organisation has managers and teams running the various functions. SFL has opened up retail
and wholesale shops in various regions of Europe to enable reaching the customers. Currently,
SFL has employed Sophie to manage the relations between PI and SFL. Sophie’s appointment
came up as a recommendation from PI to increase the quantity of purchases and long-term
relationships. Sophie has introduced various amendments to the PI and SFL relations, which
includes such as a management information system to support the growing business. The other
adjustment includes discounts for products and longer credit periods.
The potential risks arising from the appointment of a client manager
The employment of a customer relationship manager could result in various weaknesses and
risks to the organisation. SFL should ensure that the relations with PI have close management