MSc Enterprise Risk Management Report: Analyzing Asda's Risks

This report provides an in-depth analysis of enterprise risk management (ERM) at Asda, a major British supermarket chain. It begins with an introduction to risk management, emphasizing its importance in identifying, evaluating, and controlling threats to organizational performance. The report outlines Asda's aims, focusing on providing affordable goods, reducing packaging, and corporate social responsibility. It then details the ERM framework, emphasizing its structured approach to identifying potential threats and monitoring strategies. The core of the report examines Asda's risk management process, including risk identification, analysis, evaluation, treatment, and monitoring. It explores the use of a risk register, which includes key information for mitigation. The report also defines risk thresholds and identifies opportunities and threats, such as changing consumer trends and technological advancements. A risk register table is provided, detailing operational and financial risks, their likelihood, impact, and mitigation strategies. The conclusion summarizes the key findings and emphasizes the importance of effective risk management for Asda's success.

ENTERPRISE RISK
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Aims of organisation...................................................................................................................1
Risk register................................................................................................................................2
Risk threshold.............................................................................................................................3
Identified opportunities and threats.............................................................................................3
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Risk management is a prominent measure which is useful in identifying, evaluating,
control and also assess the key relevant threats associated with the organization. There are
certain level of risk and threat which may arise from wide set of sources which impact the
performance and productivity of the company. Managing the risk is useful in maximizing with
the success of the organization and reducing the likelihood of occurrence of the specific risk.
This study will focus on examining the risk threshold of the organization. It is also significant in
evaluating the threats and opportunities, existing controls, risk threshold and the mitigation
action plan associated with the risk. Asda is one of the British supermarket retail company which
has been founded in the year 1949 by Fred and Peter Asquith. The company is headquartered in
the Leeds, England and it mainly deals in general merchandise, grocery and financial services.
MAIN BODY
Aims of organisation
The key relevant aim of the organization is to significantly focus on providing the various goods
and services which in turn are affordable and cheap to the public. Moreover, reducing the
packaging is one of the key prominent objective associated with the Asda Company. It focuses
on carrying out the business by complying with the corporate social responsibility. This help in
working in the interest of the society and environment. The key aim of the Asda to carry out the
business operations with high degree of accuracy and it is useful in improving the performance
and productivity.
Risk management framework
It is considered to be as an appropriate structured procedure which helps in identifying on the
key potential threats which helps in minimizing the key impact of the risk. It is highly useful in
effectively monitoring and also evaluating the key strategies (McNeil, Frey and Embrechts,
2015). It is highly prominent in taking necessary mitigation action for the growth and success of
the company. This strategy is significant in effectively minimizing and also eliminating the
impact of the risk upon the working of the company.
Process of risk management
The risk management is very essential for the success of the company in the highly competitive
market. Thus, for this it is essential for the company ASDA to follow a series of steps or the
process (Sweeting, 2017). This process is essential for the company as this will assist the
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company in managing the risk in effective manner. The major stages being followed by ASDA in
risk management are as follows-
 The first stage is the identification of the risk as if the risk will not be identified than how
the risk will be addressed. Thus, for this it is essential for the company to identify the
risk.
 The next stage is the analysis of the risk by the company as this will assist the company
in managing the risk in effective manner.
 The next stage is related with the evaluation of the risk and then ranking the risk in
accordance with the priority of the risk.
 The next stage in the risk management process is the treating of the risk with the
available strategies and the measures for the management of the risk.
 In the end the last stage is to keep monitoring the risk that whether it has been treated in
proper and effective manner or not.
Risk register
The risk register is the key relevant and prominent tool for the management of the project
and the management of the risk. However, the risk register tends to significantly include the key
relevant information associated with the risk. This helps in finding the accurate set of
controllable action plan and an accurate mitigation action plan which helps in appropriately
reducing the key risk outcomes associated with the company. It is highly significant in the
identification of the key potential risk and take relevant set of action to improve the working of
the organization.
The risk register is very important for ASDA to make in the effective management of the
company and the operations of the company. This is due to the fact that when the company
manages the risk and maintains a risk register then this provides for knowledge to the company
that they have to manage the working of the company. Thus, for this making the risk register is
of great importance as this will guide the company that which risk is going to impact the
company to high level and which to low or moderate level. Thus, for this the risk register comes
of importance as this will make sure that the company knows every little detail relating to the
each and every type of risk (Florio and Leoni, 2017). Thus, this risk register will be of great
importance for ASDA as this will outline all the details relating to the risk that what is the
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likelihood of risk, impact of risk, risk rating, how the risk can be mitigated and many other
different types of risk related things.
Risk threshold
The risk threshold is defined as the tool of project management which is essential for the
company to use in order to manage the degree of uncertainty and the level of the impact of the
risk (Callahan and Soileau, 2017). This is very essential as this will assist the stakeholders of the
company in managing the risk and the impact which the risk can have over the business. Thus,
with the help of the proper risk management it is very essential for the company in managing the
risk and save the company from the adverse effect of the risk. The future is uncertain and the
people and the management of the company cannot predict the future, and due to this reason it is
very essential for the companies to have an analysis of the risk. This calculating the risk
threshold will assist the company in managing the effects of the risk and reduce the negative
impact of the risk over the profitability and productivity of the company because of that risk. The
risk can have two effects over the company and its operations that are either positive or negative.
Thus, if the effect is positive then it is not bad for the company. On the other side if the effect of
risk is negative then this will have bad impact over the working and operations of the company
to a great extent.
Identified opportunities and threats
With the analysis of the information available it is clear that the company exist in the
market or environment which is ever changing and dynamic. Thus, for this it is essential for the
ASDA to manage and continuously research for the changes in the market trends and working
pattern. This is due to the fact that the working of market is itself a risk as there can be any
change taking place any time. So this creates a risk for the company in keeping all the records of
the changes and the possible changes which might occur in the future.
The major threat for the ASDA is that the consumer trends and demand can change
anytime and with any reason. This creates the maximum risk for the company as if they will not
take into consideration then this will have a great impact over the working of the company. This
is pertaining to the fact that this will affect the working of company as the sales and profit of the
company is totally dependent over the consumer need only (Oliva, 2016). If the company will
not be able to fulfil the requirement of the consumer then the consumer will not like this and they
will not buy the product and services of the company. In addition to this the changes in the
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demand of the consumer can also have a positive impact as this can be used by the company in
order to have the opportunity to increase more of the consumers. Thus, this will improve the
company and the profitability of the company will increase (Brustbauer, 2016).
Another major risk in the management of the ASDA is the data and the information
which is being used by the company. This is majorly because of the reason that the working of
the company includes analysis and storage of much different type of information and database.
Thus, it is very essential for the company to keep all the data safe so that it cannot be misused by
the person or any other person within or outside the company.
In addition to this another major risk which might be faced by the company ASDA is of
the technological changes. This is very common and frequent risk as the company operates in the
global business environment and this affects the working of the company to a great extent. This
is due to the reason that in the current competitive world there are many modification taking
place in the technological field and due to this it is essential for ASDA to take into account all
these changes. This risk is both positive and negative for the company as this is both beneficial
and disadvantageous for the company. The benefit is that the use of technology will increase the
efficiency of the company and the employees. On the other side if the company will not properly
understand the use of technology then this will have a negative impact over the company and its
operations (McShane, 2018).
Risk
Number
Risk
Description
Existing
controls
Likelihood
(1-5)
Impact (1-5) Risk Rating Mitigation
actions
1. Operational
risk: This is
considered to
be as the key
prospect of the
loss which is
because of the
inadequate
procedure,
failed policies
and systems.
The
operational
risk
management
is defined to
be as the
continual
cyclic
process
which
mainly
The
likelihood of
happening
this risk is 3.
The impact
of this risk
occurrence is
4.
The risk
rating
associated
with the
operational
risk for Asda
company is
12.
The
management
of the
company
must focus on
curtailing
various set of
complexities
within the
business
process. It is
4

The
operational
risk in turn
tends to
happen
because of the
breaches,
errors,
damages and
interruptions
which has
been caused
by the people.
comprise of
the risk
assessment
plan (Ho,
Zheng,
Yildiz, and
Talluri,
2015). This
is the
prominent
measure
which helps
in making
necessary
decision and
avoid the risk
to carry out
the business
with utmost
degree of
accuracy and
relevance.
important to
segregate
each task and
understand
the details to
attain higher
operational
growth and
efficiency. It
is important
for the
management
to evaluate
and monitor
the each
departments
of the Asda
company at
the regular
intervals and
also focus on
carrying out
the regular
periodic risk
assessment.
2. Financial risk:
This risk
arises when
the company
is not able to
effectively
The financial
manager of
the Asda
company
focuses on
setting
The
likelihood of
occurrence
of this risk is
4.
The impact
of this risk
occurrence is
5.
The risk
rating
associated
with the
financial risk
for Asda
The financial
manager of
the Asda
company
must
significantly
5

meet the
obligations in
order to
significantly
pay out the
debts. This
results in the
potential loss
of money for
the investors
which has
been
significantly
invested
within the
company. the
higher the debt
of the
company then
the higher the
risk of the
potential
financial risk
to the
organization.
appropriate
set of
standards to
use the
capital of the
company
(Glendon,
Clarke and
McKenna,
2016). The
stringent
check has
been kept by
the company
to examine
and monitor
the income
and expenses
of the
company.
The goods
and services
given to the
customers is
mostly cash
transactions
and less of
the credit
transaction.
company is
20.
focus on
effectively
evaluating the
key financial
reports and
statements of
the company
which helps
in examining
the income
and expenses
of the
organization
for the
specific
period. The
development
of the
systematic
budget plan is
also
considered to
be highly
significant
which helps
in
maintaining
the accurate
degree of
capital within
the company
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and also
improve the
cash flows of
the Asda
company.
This is
considered to
be one of the
key
prominent
mitigation
action to
monitor the
income and
expenses of
the
organization.
3. Legal risk:
This is mainly
linked with the
non-
compliance of
the key legal
laws and
legislations
which are
necessary for
carrying out
the legal
business. Such
risk tends to
Regularly
complying
with the new
legal laws is
one of the
most
effective
measure
which helps
in controlling
the legal risk.
The
likelihood of
occurrence
of this risk is
2.
The impact
of this risk
occurrence is
4.
The risk
rating
associated
with the
legal risk for
Asda
company is
8.
In order to
effectively
reduce the
legal risk and
reduce the
key risk
associated
with the
litigation and
disputes
(Hopkin,
2018). The
legal team of
the Asda
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arise when the
loss eventually
occurs because
of the
negligence of
the company
associated
with the key
relevant laws
associated
with the
business. It
has been
significantly
encountered at
any specific
stage related
with the
business
proceedings.
company
must
somehow
significantly
focus upon
effectively
maintaining
the key
accurate
records and
ensuring legal
compliance.
Integration of
the legal
management
software is
useful for
alerting the
key potential
dispute.
4. Market risk: It
is considered
to be as one of
the systematic
risk which in
turn cannot be
eliminated by
using various
operational
strategies like
diversification.
The market
risk can be
effectively
controlled by
effectively
diversifying
the business
and
concentrating
on the
department
The
likelihood of
occurrence
of this risk is
3.
The impact
of this risk
occurrence is
5.
The risk
rating
associated
with the
legal risk for
Asda
company is
15.
It is very
important for
the
management
of the
company to
analyse the
key market
trends in
order to take
strategic
8

Such risk can
negatively
influence the
overall
performance
and the
productivity of
the company.
Such risk
results in the
loss within the
market
position of the
business
because of the
change in the
market price.
which is
useful in
controlling
the market
risk of the
company.
Sticking to
the low
impact cost
and also
mitigating
the risk of
the interest
rate risk is
significant in
order to find
the best
possible
solution.
action on the
timely
manner. This
way it helps
in improving
the key
operational
growth and
maintain
effective
market
position
(McNeil, Frey
and
Embrechts,
2015). It is
very
important to
keep the
proper track
of the interest
rate, inflation
rate and
foreign
exchange rate
in order to
comply with
the market
changes and
attain higher
operational
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growth and
efficiency.
5 Reputational
risk: This in
turn has the
key
probability
which leads to
the negative
publicity,
uncontrolled
events and
also negative
public
perception of
the individual
person. It
results in the
formation of
the negative
image of the
company and
also affects the
growth and
revenues of
the
organization.
Reputational
risk also
It is very
important for
the company
to protect
themselves
against any
sort of
breaches and
mishaps
within the
customer
service. It is
very crucial
to carry out
the business
with the
appropriate
degree of
ethical
conduct and
be mindful
when
carrying out
the
operational
activities.
The
likelihood of
occurrence
of this risk is
2.
The impact
of this risk
occurrence is
3.
The risk
rating
associated
with the
legal risk for
Asda
company is
6.
Carrying out
corporate
social
responsibility
and various
other
environmental
and social
activities is
significant in
improving the
goodwill and
reputation of
the company.
It is highly
crucial to
effectively
manage the
external set of
reputational
risks to
improve the
operational
efficiency and
leads to
higher
sustainable
10

results in the
failure of the
performance
of the business
and leads to
disruption
within the
company.
growth.
6 Strategic risk-
this is a type
of risk which
occurs when
the strategy is
formulated for
the operations
of the
company and
the strategy
fails due to
some
uncontrollable
factors. It is
very essential
for the ASDA
to manage the
strategic risk
as this will
have an
impact on the
overall
working of the
For the
management
of the
strategies in
present era
ASDA has
hired a
professional
who is
having great
knowledge in
the field of
management
and
formulation
of the
strategies for
the
management
of business
organization.
The
likelihood of
occurring the
risk is of 4
point
The impact
of the risk is
3 as this has
a application
all over the
company
Thus, the
risk rating of
the strategic
risk is 12.
The major
mitigation of
this risk is to
formulate the
strategies by
analysing and
screening the
strategies in
very deep
manner. This
is essential as
this will assist
the company
in managing
the operations
of the
company.
This will
mitigate the
risk of
strategy as the
company will
make the
11

company.
Thus, for
getting success
the most
essential thing
for ASDA is
to manage the
strategies
selected and
ensure that it
is
implemented
in proper and
effective
manner.
strategy
effective as
when the
company will
test the
strategy then
this can be
applied in
more
effective
manner.
7 Technological
risk- this is
also major risk
which is faced
by ASDA
when they run
the business.
This is
majorly
because of the
reason that the
business
operates in the
environment
which keeps
on changing
For this the
company is
presently
trying to
research for
the latest
technology
and then to
adapt to
those
technology
so that the
company can
grow and
develop and
work in more
The
technological
risk of
ASDA has
the
likelihood of
2.
The major
impact of the
technological
risk is 5 as of
the
technology
will not be
adapted then
the company
will not be
able to
operate in
proper and
effective
manner.
The risk
rating of the
technological
risk is 10 and
this states
that the
impact of
this risk is
moderate
over the
working and
operations of
company.
The
motgating
action which
can be taken
by ASDA for
dealing with
the
technological
risk is that the
company
must recruit
an expert or
professional
having
thorough
knowledge of
12

and if the
company will
not adapt to
the latest
technology
then the
company will
not be
effective in its
operations.
effective and
efficient
manner
(Fraser and
Simkins,
2016).
all the latest
changes and
development
taking place
within the
external
environment.
8 Competition
risk- this is the
major risk
which is being
encountered
by the ASDA
in managing
the business.
This is
basically
because of the
reason that the
business
operates in the
global
business
environment
where the
competition it
very high and
the company
For this the
company is
currently
taking
measures in
promoting
the goods
and services
of ASDA in
the global
market. This
is essential
measure as if
the company
will market
the product
and services
then the
consumer
will get
knowledge
The
likelihood of
the occurring
of the risk of
competition
is 4.
The impact
of the
competitive
risk is 4 as
this affects
the working
of the
company to a
great extent.
The rating of
the risk of
competition
is the 16 as if
the
competition
will not be
managed
then this will
not be
beneficial for
ASDA.
The major
mitigating
action for the
competitive
risk is the
improvement
in the quality
of the product
and services
of the
company .
this is majorly
because of the
reason that if
the quality
will be good
or excellent
then the
company
ASDA will
enjoy a
13

have to take
many
measures in
dealing with
the high and
intense
competition in
the global
business
environment.
relating to
the product
and services
of the
company.
competitive
advantage.
Thus, this will
assist the
company in
managing the
competition
within the
company and
the business
environment.
CONCLUSION
From the analysis of the above data and information it is concluded that for the business
to get successful the most essential thing is the management of the risk. This is essential because
of the fact that if the risk will not be managed then the company will be able to manage the
operations of the company. The risk is referred to as the uncertainty or tendency of occurring the
event or not. This is an uncertain situation as there is no surety that whether the event will occur
or not and if it will occur then this will have a great impact over the company and its operation.
The present report highlighted the aim of the company and the various threat and opportunities
present in the external environment relating to the various types of risk relating to business and
the market condition. Also, in addition to this the risk register was made for the variety of risk
which is being encountered by ASDA at time of working in the external business environment.
The various types of risk being encountered by the company are like legal risk, market risk,
operational risk, financial risk, competitive risk, technological risk and many other types of risk.
14

REFERENCES
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Florio, C. and Leoni, G., 2017. Enterprise risk management and firm performance: The Italian
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Fraser, J.R. and Simkins, B.J., 2016. The challenges of and solutions for implementing enterprise
risk management. Business horizons. 59(6). pp.689-698.
Glendon, A.I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc
Press.
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implementing effective risk management. Kogan Page Publishers.
McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: concepts,
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Oliva, F.L., 2016. A maturity model for enterprise risk management. International Journal of
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Sweeting, P., 2017. Financial enterprise risk management. Cambridge University Press.
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