Risks Facing Multinational Consumer Goods Industry

Running head: RISKS FACING MULTINATIONAL CONSUMER GOODS INDUSTRY
Risks Facing Multinational Consumer Goods Industry
Name of the Student
Name of the University
Author note

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RISKS FACING MULTINATIONAL CONSUMER GOODS INDUSTRY
Introduction:
Risks are indispensable parts of the global business operations and are present in every industry in varying degrees. Sadgrove
(2016) defines risk as a loss of financial nature directly or indirectly which have detrimental effects on the business generation.
Business organisations face several risks while operating the market. Factors like change in customers’ preferences cause loss of
customers which directly hits the revenue generation, thus causing revenue risks. Factors like change in government policies like
increase in corporate tax rates can result in loss of revenue due to increase in expenditure, thus, once again culminating to revenue
risks. However, it can be pointed out that government policies indirectly cause revenue risks. The aim of the report is to study ten
everyday risks companies face by taking consumer industry as its background. The study in order to conduct a more specific analysis,
Unilever would be taken as the example. The tools used to conduct the risk analysis would be risk register and risk mapping.
Risk register:
Risk register is a tool which business organisations use to manage and monitor everyday risks. Smith (2016) points out that
risks which business organisations like Unilever face originate due to macroeconomic factors like political and economic factors.
Mangla, Kumar and Barua (2015) point out that irrespective of the sources, have to be managed effectively in order to minimise their
detrimental impacts on the organisational operations and revenue generations. The following risk register would take into
consideration ten risks which consumer companies can face with Unilever as the example. The ten risks which Unilever faces in the

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RISKS FACING MULTINATIONAL CONSUMER GOODS INDUSTRY
international market are market risks, cyber theft risks, supply chain risks, natural disasters, legal risks or legislation changes,
economic risks, fire and explosion risks, goodwill risks, capital risks and technological risks. (Attached)
Details of monitoring activities:
The management should form a strong risk monitoring strategy. The first step or risk reporting that would be completed would
consist of reporting of any risk by staffs irrespective of ranks. The lower rank staff would report risks immediately to their managers.
The managers should report the same to the apex management. The risk management would start with the apex managers making
decisions and then communicating the strategies to departmental heads. The departmental heads should then breakdown the strategy
among their subordinates. Thus, the risk monitoring would be completed under the leadership of the apex managers and support of
subordinate employees. The frequency of monitoring would depend on the severity of the risks. While factors leading to minor risks
are monitored annually, factors leading very severe risks are monitored monthly, the managers of each department under the
leadership of the senior managers would be responsible for monitoring risks pertaining to their respective departments.

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RISKS FACING MULTINATIONAL CONSUMER GOODS INDUSTRY
Risk register of Unilever
Ris
k
no
Docume
nt
control
informa
tion
Risk
identifie
r
Risk
Categor
y
Risk
Descrip
tion
Likeliho
od of
risks
Impact of the
risks
Risk
respon
se
catego
ry
Owner of
risk
Risk
response
action
Owner of
Risk
response
action
Due date
for the
action to
be
complete
d
1 Profit
and Loss
stateme
nt,
balance
sheets
Falling
profits in
spite of
strong
marketi
ng
strategie
s
Market
risks
1.
Market
risks
can
originat
e due to
introdu
ction of
new
product
s by
existing
competi
tors
and/or
entry of
new
firms
with
similar
product
s.
2.
Market
risk can
be the
Very
high
conside
ring the
intense
interna
tional
and
local
competi
tion the
MNC
faces.
1. Fall in
revenue and
losing of
consumers.
(short term
impact)
2. Losing
investors, and
supply chains
due to falling
capacity to give
positive ROI.
(medium term)
3. Goodwill risk
and losing of
global market
position (long
term loss)
Strateg
ic
decisio
ns,
marke
ting
strategi
es
Finance
department,
Marketing
department
Strengthen
ing
marketing
of
products,
introducin
g new and
innovative
products
with less
competitor
s
Marketing
departmen
t
2 years