AEW's Diminishing Profitability: Risk Management Plan

This report presents a comprehensive risk management plan for Australian Engineering Works Private Limited (AEW), addressing the company's diminishing profitability. It begins with an overview of AEW's business and the challenges posed by increased competition and employee turnover. The report details a risk register that identifies potential risks, categorizes them by likelihood and impact, and assigns risk scores. Both qualitative and quantitative risk analyses are performed to evaluate the risks, with the quantitative analysis focusing on employee turnover and its impact on company objectives. The report then outlines the implementation of risk responses, including strategies to enhance service reliability, attract new customers, and reduce employee turnover through reward and incentive programs. Furthermore, the report emphasizes the importance of ongoing risk monitoring, including regular risk assessments and tracking of mitigation strategies. The report concludes by highlighting the importance of resource management, customer loyalty, and the use of social media to enhance awareness and engagement.

Running head: RISK MANAGEMENT PLAN
Risk management Plan: Australian Engineering Works Private Limited (AEW) diminishing
profitability
Name of the student:
Name of the university:

1RISK MANAGEMENT PLAN
Table of Contents
1. Risk Management Plan................................................................................................................2
1.1 Risk register...........................................................................................................................2
1.2 Qualitative and Quantitative risk analysis.............................................................................3
1.3 Implementation of risk response............................................................................................3
1.4 Monitoring Risk response......................................................................................................4
References........................................................................................................................................6

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1. Risk Management Plan
1.1 Risk register
Australian Engineering Works Private Limited (AWE) is an Australia based plastic
molding companies which mainly operate for the telecommunication industry. Due to the quality
and affordability of the products the company has become one of the most successful companies
(Heldman, 2015). However, certain risks are identified for the company based on the below
mentioned scores details the probability/likely and impact of the risks are calculated.
Impact
Catastrophic
(5)
5 10 15 20 25
Major (4) 4 8 12 16 20
Moderate (3) 3 6 9 12 15
Minor (2) 2 4 6 8 10
Insignificant
(1)
1 2 3 4 5
Rare (1) Unlikely
(2)
Probable (3) Likely
(4)
Most likely (5)
Likelihood
The risk register matrix shows the impact and likelihood of the risks that might diminish
the expected success of AWE. Score ranges are as follows:
Less than equal to (>=3) = low

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Less than equal to (>=6) = Moderate
Less than equal to (>=12) = High
Less than equal to (>=25) =Extreme
1.2 Qualitative and Quantitative risk analysis
Two different types of risk analysis processes are performed to identify and resolve the
risks. The qualitative risks analysis is performed considering those risks identified in the risk
identification phase on the other hand, quantitative risk analysis is performed for those risks
which negatively impact the project objectives and goals. According to Hornstein (2015) for
managing most of the project qualitative risk analysis is performed. In order to manage the
complex projects Quantitative risk analysis is performed.
The telecommunication industry is highlighted as a lucrative market due to the
emergence of many new companies. Due to the competitors AWE fill fail to obtain competitive
advantages and also commercial revenue as well. The new entrant offers affordable price range
to the consumers as a result AWE is failing to grab new consumers and retain existing consumers
also. These issues have collectively reduces the profit of the company up to 45%. The new
companies are offering better career opportunities therefore, the rate of employee turnover are
also increasing (Joslin & Müller, 2015). The employee turnover issue analysis is a quantitative
risk because it impacts the objectives of AWE.
1.3 Implementation of risk response
Implementation of risk response is very much crucial for company success. AWE has
also evolved certain risk responses for the identified risks. It will help to enhance the competitive
advantages of the plastic molding company. The name of the risks and respective response

4RISK MANAGEMENT PLAN
strategies are elaborated in the below section. A risk register is implemented in the below
section:

4RISK MANAGEMENT PLAN
Identification of risk Qualitative risk analysis Risk Response
Risk Category
Risk Id
Risk event Probabili
ty (P)
Impact
(I)
Risk score
(PXI)
Risk
Rank
Risk
Strategy
Potential Response cost
Assigne
d
Owner of
the risk
date
started
date
Completio
n
Current
Status
Sales and
marketing risk
Entry of similar new
companies
Probable
(3)
High (4) 12 High Risk
mitigation
Addition of operational
reliability
20000 System
developer
22nd
Novembe
r
27nd
November
Closed
Sales and
marketing risk
High level
competition
likely (4) Catastrop
hic (5)
20 Extrem
e
Risk
acceptance
Addition of functional
features to the products
20000 System
designer
28th
Novembe
r
10th
December
Open
Economic risk Huge employee
turnover
unlikely
(2)
Medium
(3)
6 Low Risk
avoidance
Reward and Incentives 0 HR
manager
12th
December
22th
December
Open
Sales and
marketing risk
Competitive
disadvantages
most
Likely (5)
Minor (2) 10 Mediu
m
Risk
exploitatio
n
secured on-time services 60000 Marketing
head
20th
December
27th
December
Open
Economic risk Fall in revenue Rare (1) High (4) 4 Low Risk
mitigation
Commercial support from
third parties
10000 Finance
manager
28th
December
30th
December
Closed

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Instead of compromising with the quality of products and services AWE should
incorporate certain additional features and operational reliability to their services to retain their
existing consumers and grab new consumers as well (Urban, 2016). Secured and consumer focus
service is another important response approach which will attract the consumers more than other
similar companies. Apart from this, implementation of reward program and incentive programs
are the other approaches can reduce the employee turnover rate.
1.4 Monitoring Risk response
Risk monitoring is referred to as one of the most crucial phase of risk management plan.
Identification of the risks is not ultimate solution for AWE rather respective response for those
risks are also crucial for the plastic molding company. Casual risk assessment occurs on a regular
schedule for AWE and these are mostly annual approach (Kerzner & Kerzner, 2017). However,
risk response monitoring states the progress of currently involved risk mitigation strategies. The
strategies those are to be incorporated to resolve the identified risks include:
Risk identification
Risk analysis
Risk control
Risk measurement and communication
While monitoring the risks the identified risks are also needed to e tracked accordingly.
Whether, new risks are occurring or not also required to be checked by the AWE. It is expected
that if the risk response strategies are professionally evaluated effectively these risks will never
occur further (Hornstein, 2015). Proper resource management, borrowing and capital investment

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are the other ways needs to be used by AWE to resolve the reduced revenue based challenges.
AWE requires focusing on customer loyalty to figure out those issues which continuously
affecting. The marketing department of the company should use social media platforms for
sharing social, environmental and commercial awareness among both the consumers and
employees (First, 2016). AWE must incorporate positive and beneficial reward and incentives
structures for the employees more than the other companies to ensure the rate of employee
turnover is reduced.

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References
First, M. B. (2016). Adopting a continuous improvement model for future DSM revisions. World
Psychiatry, 15(3), 223-224.
Heldman, K. (2015). PMP project management professional exam deluxe study guide: updated
for the (2015) Exam. John Wiley & Sons.
Hornstein, H. A. (2015). The integration of project management & organizational change
management is now a necessity. International Journal of Project Management, 33(2),
291-298.
Joslin, R., & Müller, R. (2015). Relationships between a project management methodology &
project success in different project governance contexts. International Journal of Project
Management, 33(6), 1377-1392.
Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Nicholas, J. M., & Steyn, H. (2017). Project management for engineering, business and
technology. Routledge.
Urban, M. E. (2016). Enhanced Capabilities for Subcritical Experiments (ECSE) Risk
Management Plan (No. LA-UR-16-22988). Los Alamos National Lab.(LANL), Los
Alamos, NM (United States).