Comprehensive Risk Management Report: Arham Snacks Business

This report presents a comprehensive risk management plan for Arham Snacks, a new cafeteria business. It begins with an introduction to risk management, emphasizing its importance for business sustainability. The report then provides a company overview, including its objectives and context within the Melbourne market. Stage 1 involves scoping the business, outlining goals, objectives, critical success factors, and identifying stakeholders. PEST and SWOT analyses are conducted to assess external and internal factors influencing the business. Stage 2 focuses on risk analysis, using a risk matrix to evaluate the likelihood and consequences of potential risks, such as higher costs, lower sales, and natural disasters. Stage 3 details measures to treat identified risks, including risk management strategies and an action plan. The action plan outlines specific steps, responsible parties, and evaluation methods for mitigating each risk. Stage 4 focuses on implementation and monitoring of the risk treatment plan. The report concludes by summarizing key findings and recommendations for Arham Snacks to effectively manage and mitigate risks. This report provides a valuable resource for students studying business and entrepreneurship, offering insights into practical risk management techniques.

Manage Risks

Table of Contents
INTRODUCTION ..........................................................................................................................3
Stage 1..............................................................................................................................................3
Company overview......................................................................................................................3
Context.........................................................................................................................................3
Scoping........................................................................................................................................4
Type of Stakeholders and their role.............................................................................................4
PEST & SWOT Analysis.............................................................................................................5
Research & Conclusion................................................................................................................6
Stage 2..............................................................................................................................................6
Analysing of risk .........................................................................................................................6
Stage 3..............................................................................................................................................8
Identifying measures to treat the risks.........................................................................................8
Stage 4............................................................................................................................................11
Implementing and monitoring the risk treatment plan...............................................................11
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Risk management is a foundational element considered by the business entity when
developing any plans that contribute to the company's sustainability and progress. Risk
management is meant to recognize the potential ambiguity and its determination to what degree
it may impact the operations of the company (Bodnar and et.al., 2019). A higher risk factor is
regarded and then efforts are made to resolve from lower risk angle. The fundamental concept
underlying risk management is recognising and minimize the impacts of unexpected events that
can adversely affect the operations of the company.
Stage 1
Company overview
Name of new business which is going to introduce in the market is ARHAM Snacks that
is small cafeteria which offer various products such as coffee, tea, snacks, afternoon breakfast
etc.
Objectives:
 Main objective of ARHAM Snacks is to satisfy their customers through offering quality
products along with effective services.
 Also provide friendly or comfortable environment where customers can have their food
or make their experience more valuable.
 Try to generate more revenue through providing quality foods to consumers.
Context
At the time of introducing new business in the market, organization need to develop risk
management plan and it will be possible after analysing external factors which impact the
success. There are various factors which can affect operations of ARHAM Snacks and it
discussed below:
Political factors: Risk assessment will be done after evaluating factors which impact
ARHAM Snacks such as political stability, government rules & regulations, tax policies etc.
Economic factors: Managers of ARHAM Snacks should evaluate economic factors
because it can work as risk for company and impact its success such as growth rate, labour cost,
inflation or recession, interest rate etc.

Social factors: This factor include individual behaviour, attitude, lifestyle etc. so
managers need to evaluate these factors before making risk management plan (Brustbauer,
2016).
Technological factors: Change in the technology influence business operations but
managers need to identify that it will positively impact or negatively.
After analysing external factors they need to develop risk management plan and take
further actions accordingly.
Scoping
Goals & objectives:
 Ultimate goals of ARHAM Snacks is to generate profit which provide them market
growth, so they need to done technological innovation.
 Business offer quality food and service which satisfy their clients and provide them
friendly or comfortable environment (DuHadway, Carnovale and Hazen, 2019).
 ARHAM Snacks target Melbourne location which is situated in Australian State of
Victoria.
 In the beginning business have flat organizational structure due to less people. s
Scope:
ARHAM Snacks target Melbourne market and they ensure to focus on consumer taste &
preferences which helps in making their customer base more stronger or generate revenue. This
business deliver quality food such as Coffee, Tea and other snacks which helps in achieving their
goals & objectives.
Critical Success Factors (CSF):
Quality of Coffee, right location to open store, atmosphere, customer service etc. These
are the critical success factors which help ARHAM Snacks to get success or achieve business
goals & objectives.
Type of Stakeholders and their role
Every business has various stakeholders and it will be divided in two forms such as
internal or external and it mentioned below:
Stakeholders Internal / External Role in process Stake in Process
Hurley Internal Employee of ARHAM Contribute in business

Snacks operations through
producing products
Sushi Internal Managers of ARHAM
Snacks
This person manage
all the internal
activities.
Wilson Internal Technical expert of
business
It helps in performing
operational activities
in well manner.
Customers External Help business to achieve
their goals & objectives
through demanding.
These are people who
consume products &
services.
Suppliers External Supply raw material They provide raw
material to business to
complete their
operations.
Investors External Provide financial help They financial help the
business to fulfil their
needs.
PEST & SWOT Analysis
PEST Analysis:
Political Social
 Political stability is most important to
implement any business & strategies.
 Trade relationship between countries
also affect (Giannakis and
Papadopoulos, 2016).
 Lifestyle of customers that they having
tea or coffee on regular basis or not.
 Taste & preferences also influence
demand of products & services.
Economic Technological
 Inflation or recession period affect the  Business should follow latest

growth of business.
 Disposable income of individuals also
affect the demand of food.
technology such as advanced coffee
machine.
 Done regular research to find suitable
technology to increase production.
SWOT Analysis: high cost low sales
Strengths Weaknesses
 Quality of Coffee is can be the strength
of ARHAM Snacks.
 Friendly or comfortable environment.
 Huge competition in the market.
 Low customer base which impact the
overall demand.
Opportunities Threats
 Expansion of business operations in the
market after getting success in local
market.
 Diversification in the products &
services.
 Competitors strategies to offer low cost
coffee.
 Lack of financial resources become
threat to business operations.
Research & Conclusion
According to Rampini and Vuillemey 2019, risk management is the process of
identifying issues or risk which is related to new business or any project. Before executive any
business plan, person need to evaluate various risk which can occur from internal as well as
external environment or impact the production or probability of the business.
With the help of intense research of market or after identifying external factors which
influence ARHAM Snacks and its operations to perform. There are various risk identified such
as higher cost, low sale, natural disaster or missing fire extinguishers (Kliem and Ludin, 2019).
These are risk identified which influence the business and its success. It is very essential to
produce risk management plan where company find suitable solutions to minimise risk or get
success in the market.

Stage 2
Analysing of risk
Risk Analysis is a method that lets manager recognize and address potential issues which
could compromise important enterprise or mission programs. Risk assessment could be
complicated, because specific information like project plans, financial data, safety protocols,
publicity projections, as well as other related information will have to be included (Meyer and
Reniers, 2016). In order to calcite the above mention risk specific risk matrix have been formed
which shows the likelihood and consequences that is shown with the help of a table:
Risk matrix
Risk Likelihood Insignificant Minor Moderate Major Extreme
Higher cost Frequent ✓
Lower sales Possible ✓
unskilled
labour
Possible ✓
Natural
Disaster
Likely ✓
Missing fire
extinguisher
Probable ✓
From the above table it has been determined that missing of fire extinguisher and higher
cost are the biggest threat for the new developed café. Thus these risk are needed to be treated in
a well systematic and organised manner which will lower their impact. Some the following ways
for treatment of these risk which is dived into several meaningful steps that are discussed
underneath:
Avoid: Danger management is in general very conscience-explanatory. If a danger is
considered too high otherwise, then manager of café can completely avoid the risk-creating
operation (Rampini, Viswanathan and Vuillemey, 2019). Such as in case of there are chances of
getting fire into the cafe then manager can hire an electrician who he is responsible for
undertaking the monitoring of electric line and fire extinguisher on regular basis.

Transfer: In many cases, the danger might be passed to another entity. For precisely that
reason, for example, insurance companies operate. Additionally, if case have a subcontract then
and if any risk arises to company, then they might ask for the help form the contract company
and would lower the impact of risk on their operation.
Reduce: Reduction in risk is among the most important measures which cannot be stopped
with procedures or operations, and where danger cannot be passed to another entity.
Accept: Of course, such cases must include just low risk, or easily controlled
consequences. Many threats may be entirely acceptable and entail no intervention whatsoever.
It is very important for Arham café to communicate the risk to their existing stakeholder
which would give a detail picture about functioning (Sweeting, 2017). There are effective ways
which are followed to communicate risk to stakeholder that are discussed below:
 Involve in Team: Risk management needs the participation of all stakeholders of Arham
cafe, particularly if people have experience in some risk groups or are representatives of a
particular aspect of the business. Such experts can provide specific and specific
information, and it will help develop more reasonable expectations for stakeholders. It's
easier to listen to business partners by meeting standards and receiving their critical help
for respective café.
 Utilize technology: Risk analysis systems will provide by manager to their staff
members with the ability to speak with clients with the qualitative risk assessment. If risk
analysis is highly speculative or involves an unreliable tool, financial or time
measurement, stakeholder perceptions may be misplaced against unreasonable demands.
That may have left them dissatisfied with the administration of Arham cafe initiative,
actually damaging their funding.
 Use reporting and alerts: When we recognize the value of engaging with stakeholders,
how managers maintain constant communication, participation with stakeholders and
complete understanding of the risks associated with their project.
Stage 3
Identifying measures to treat the risks. Risk management- The term risk management can be defined as a type of process which
is related to practice of identifying potential risk and taking suitable steps so that risk can

be minimised (Tavares, da Silva and de Souza, 2019). The objective of risk management
is to help newly established business entities so that they can sustain in the competitive
environment. Herein, it is important to know that risk management is not only necessary
for new businesses but also this is crucial for old businesses also. Basically, risk
management plan is a type of document which is related to categorising risk as per its
impact on company’s performance and finding alternatives to overcome it. In regards to
Arham snacks, risk management plan is prepared below in such manner:
Risk Assess risk Controls Monitoring Responsible
Higher cost Higher By applying cost
effective strategies.
By checking total
value of actual cost
with estimated value
of cost.
Finance
manager
Lower sales Higher By making more
promotion of products
and services so that
more number of
customers can be
attracted.
By analysing
average value of
sales revenue in
each month.
Sales manager
Unskilled
employees
Medium By providing
appropriate training to
employees so that their
efficiency can enhance.
By checking day to
day performance of
each employee.
Human
resource
manager
Natural
disaster
Lower By making proper
strategy for each
possible natural disaster.
By evaluating
geographical aspect
of location.
Branch
manager
Missing fire
extinguishers
Higher By implementation of
fire extinguishers.
Branch
manager
 Action plan- It is a key aspect in the context of risk which is needed to be applied after
identifying the risk. This is related to applying effective action plan so that risk can be

minimised. There are different types of methods in order to minimise risks. Herein,
underneath an action plan is prepared that is needed to be followed in order to overcome
risk of above mentioned cafe:
Name of risk Action needed Evaluation Responsible person
Higher cost In order to overcome
this risk of higher cost,
it is essential for above
cafe that they should
focus on those aspects
which are leading to
higher cost. By doing
so this will be easier
for them to overcome
risk.
The evaluation of
applied strategy can be
done by checking
amount of
expenditures which
occurs in a particular
time segment (Thöns,
2018).
Finance and accounts
department.
Lower sales This risk can be
minimised by
increasing level of
sales. It can become
possible by targeting
those customers which
need to buy their
product. As well as
they should apply
effective marketing
and promotion
strategies.
It can be evaluated by
checking graph of
sales month by month.
As well as by
assessing number of
customers who are
attracting towards
buying products.
Sales department.
Missing fire
extinguishers
It is a risk that can be
reduced by installing
new fire extinguishers.
This can be too risky
This can be identified
by regular inspection
of available fire
extinguishers.
Branch managers

in the case of fire.
Monitoring and evaluating- This is also a crucial step which is needed to be applied in the
context of entire risk management process. It is related to analysing monitoring performance of
applied action plan (Thorne and et.al., 2018). This is important because on the basis of it, this
becomes possible for managers to identify which types of strategies are needed to applied so that
risk can be overcome. In the context of Arham snacks they can apply below mentioned process
in order to monitor performance of action plan:
(a) Matching outcome of risk management plan with objective- This is important to match result
of risk management plan with objectives so that it can be identified that which types of
strategies are needed to apply.
(b) Review of changed activities- Along with review of changed activities is also a main step so
that performance can be monitored with ease.
Stage 4
Implementing and monitoring the risk treatment plan
 Summary of initial risk- In this part of report, overall risk has been summarised.
Basically, the newly started cafe can face mainly five types of risk which can are needed
to address in quick manner. The risk which have higher impact are higher cost, lower
sales and missing extinguishers.
 Summary of actions to manage the risk- In order to manage the risk, an action is
prepared that consists detailed information about assessment of risk, responsible person
and controls. These risks can be minimised only if above company will apply this action
plan in an effective manner.
 Effectiveness of risk management plan- The risk management plan is too crucial for
business entities in order to overcome negative impact of risks on company’s
performance. In the context of above cafe, risk management plan has been applied in
order to find out possible alternatives which can counter attack on risks. Through
recognizing and maintaining a complete list of project threats, it is possible to lower
future problems and obstacles, and to find easy chances (Van Staveren, 2018). The risk
mitigation approach often helps solve issues before they arise because such events have

also been prepared and strategies have been formulated and decided upon to cope with
them.
 Evaluation of risk management process: Risk assessment seeks to identify what the
predicted risk actually entails for those associated with the risk or those impacted. A
significant part of this review will be looking at just how people regard threats. This part
provides a comprehensive of the quantitative and social frameworks that influence the
risk profile, providing an insight on why threats are viewed differently. Particularly at
such an early stage, theoretical appraisal of a risk assessment strategy is very important at
each point. This will allow businesses to find the flaws before it falls into practice.
Manager should address the problems once they are through method, and instead
implement them. A comprehensive review and critical assessment of the economic
environment where the development of a risk management program is necessary. Attempt
to make potential changes throughout the plan of action to even get desired outcome by
assessing the efficacy and performance of all the operations. It may be quite difficult but
it is important for risk assessment strategy to be successfully implemented.
CONCLUSION
From above report it has been articulated that Risk may emerge from finance market
volatility, pressures from government or labour unions, danger from program failure, legal
responsibilities, loan repayment, and other natural causes. Effective managing risk is therefore
possible if the company has correctly measured the organizational environment as well as its
external work environment that involves supervisors, administrators, workers, competitor's
strategies, technological advancements etc.

REFERENCES
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