Risk Management Action Plan for New Restaurant: Spices of Melacca

This report provides a comprehensive risk management action plan for the new Malaysian restaurant, Spices of Melacca, located in Canberra. It includes a stakeholder analysis identifying key stakeholders and their associated risks, a PESTLE analysis evaluating the external environmental factors affecting the business, and clearly defined objectives and critical success factors. The report details stakeholder involvement strategies for effective risk management and employs a risk matrix to prioritize risks based on likelihood and consequence. Key risks identified include low product quality, technological risks, and employee development needs. The report proposes risk management options such as total quality management, employee training, and improved stakeholder communication. The evaluation of the risk management process emphasizes continuous improvement through quality control, employee development, and technological advancements to ensure customer satisfaction and business profitability. The report concludes that effective risk management is crucial for the restaurant's success in a competitive market.

RISK MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
STAKEHOLDER ANALYSIS.......................................................................................................1
RISK ANALYSIS...........................................................................................................................1
Pestle analysis..............................................................................................................................1
PARTICIPATON AND GOALS....................................................................................................2
Objectives and critical success factors........................................................................................2
Stakeholders involvement for risk management..........................................................................3
RISK MATRIX...............................................................................................................................3
Risk identification........................................................................................................................3
Likelihood and Consequence.......................................................................................................4
Risk management options............................................................................................................5
EVALUATION OF RISK MANAGEMENT PROCESS...............................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7
APPENDIX......................................................................................................................................9
List of tables
Table 1: Stakeholders' analysis........................................................................................................1
Table 2: Risk identification.............................................................................................................3
Table 3: Risk likelihood...................................................................................................................4
Table 4: Risk identification.............................................................................................................9
Table 5: Score..................................................................................................................................9

INTRODUCTION
The risk management process plays important role in resolving the potential issues
associated with the business (Tjoa, et al, 2008). In this regard, the risk management of new
restaurant; Spices of Melacca has been evaluated with the application of risk management
process and environmental analysis.
STAKEHOLDER ANALYSIS
The analysis has been done as follow for Spices of Melacca-
Table 1: Stakeholders' analysis
Stakeholders Issues/Risks
Customers Changing demand related to products and
services and availability of substitute because
of price variation.
Investors Interferences in the decision making and
dissatisfaction at the time of low rate of
return.
Employees Unskilled employees might create additional
cost of training and development.
Suppliers Ineffective supply chain along with the poor
quality of input. Furthermore, payment related
issues with suppliers might also affect the
performance of the business.
Competitors Due to high competition in the marketplace,
Spices of Melacca might get low rate of
return.
Government May create issue through unfavorable
regulations and rules.
1

RISK ANALYSIS
Pestle analysis
The description of several elements has bene provided as follows-
 Political factors-Australia is considered as the world’s most political stable country
which supports beginners to commence business in the country from (HABC, 2018).
Owing to this, Spices of Melacca have superior opportunity to begin trade in Australia
with supportive and stable political factors.
 Economic factors-The economic condition of Australia is good due to it have highest
growth rate among the developed countries (ePortal, 2018). Further, the GPD rate of
Australia encourages new investor to begin their business. Thus, Spice of Melacca has
minimum risk from the economic condition and also have fine prospect to establish their
business in Australia.
 Social factors- Many tourists prefer to spend their time in the restaurant in Australia
(Restaurant & Catering magazine, 2017). Owing to this, their taste is according to their
region so the selection of menu dishes will be accordingly.
 Technological factors-In the present era the technology is crucial for establishing of any
business (Rodgers, 2007). In this context, the restaurant business needs to bed more
advanced in term of technology in several (Saad Andaleeb and Conway, 2006).
 Environmental factors-Climate change influenced the restaurant business because it has
impact on the availability of raw material of food product through the changing rainfall
pattern this impact on Australia as other continent (Collet, 2014). Owing to this, the Spice
of Melacca has risk from the climate of Australia.
 Legal factors-Australian government is aware about the food safety of their public and
accordingly imposed the food safety Act 1991 which focuses on the food quality serve by
the commercial purpose (Australian Institute of Food Safety, 2018). Owing to this, the
legal environment of the Australian market related to food may affect the performance of
the new business.
2

PARTICIPATON AND GOALS
Objectives and critical success factors
The success of the business will be measured on the basis of objectives which are listed as
follows-
 To avail the products and services at favorable price to deal with competition
 To maintain the effective as well as integrated supply chain for reducing the cost by 10%
in the time span of 6 months.
 To create the brand image in the Australian market by offering variety of products and
services
 To increase the sales turnover by 15% till the next financial year
Stakeholders involvement for risk management
On the basis of stakeholder analysis and the objectives of action plan, different methods
will be used to involve the stakeholder in the risk management process. For involving the
customer in risk management, survey will be conducted that helps for understanding the
customer’s current requirements in Australian market. Further, to increase the product quality,
connection will be established with the major supplier in restaurant industry of particular area.
Moreover, the involvement of investors will be increased through enhancing their participation
in decision-making process for financial support.
RISK MATRIX
Risk matrix helps an organization to understand the risk and their relation with the
objectives (Lim and et. al., 2012; Ankley and et. al., 2010). In this context, the management of
the Spices of Melacca has been carried out as follows. In this regard, the score is changes on the
level of 1 to 5 wherein 1 present very low risk and the last 5 present very high intensity of risk
Risk identification
Table 2: Risk identification
Risk Purpose1
Customer
satisfaction
Purpose 2
Isolation
Purpose 3
commence in
Australian
market
Purpose 4
Profitability
Score
3

Pressure of
stakeholder
5 3 3 2 13
Political
pressure
2 3 4 3 12
Employee
development
4 3 4 4 15
Technologica
l risk
4 3 4 5 16
Low quality
related issue
5 4 4 4 17
On the basis of risk prioritization low quality, technology and employee development
require keen focus of the business as these are high risk areas (refer appendix). However,
likelihood and consequences of risk is determined in the following manner-
Likelihood and Consequence
The score of each score, refer the table in appendix.
Table 3: Risk likelihood
Risks Risk 1 Risk
2
Risk 3 Risk 4 Risk 5
Low
quality
related
issue
Tech
nolog
ical
risk
Employ
ee
develop
ment
Pressu
re of
stakeh
older
Political pressure
Likelihood 2 2 3 4 2
Consequence 5 5 3 4 3
Risk 1 0 1 3 5 0
4

Risk 2 1 0 4 4 0
Risk 3 4 4 0 3 0
Risk 4 4 3 4 0 4
Risk 5 0 3 1 3 0
Risk interface score 9 11 12 15 4
Risk interface Weighted score 45 55 36 60 12
As per the evaluation of the risk analysis, low quality, pressure of stakeholders and
technological changes should be addressed effectively so as to determine the successful
operation of the business.
Risk management options
 Total quality management
 Employee training
 Free flow of communication between stakeholders
 Applying new and cost-effective technology
EVALUATION OF RISK MANAGEMENT PROCESS
To ensuring the good product quality total quality management model will be applied
along the employee training program on the regular basis which will enhance the employee
capabilities in organizing. Further, it will increase product quality together with employee
development. Apart from this, the healthy communication will establish between the
stakeholders of company. After some period of commencing the business, the technological
advancement will be done for the improvement of the service and product quality. Further, it will
enhance the quality of those operation which leads customer satisfaction and improve
productivity.
CONCLUSION
5

According to present report it can be concluded that the external environment influenced
the business by creating threats which affects company’s profitability and productivity. In this
context, the risk management is most crucial for beginners to manage the efficiency of their
business with effective management of particular risk and minimize the effect of risk on the
business.
6

REFERENCES
Ankley, G.T., Bennett, R.S., Erickson, R.J., Hoff, D.J., Hornung, M.W., Johnson, R.D., Mount,
D.R., Nichols, J.W., Russom, C.L., Schmieder, P.K. and Serrrano, J.A. (2010) Adverse outcome
pathways: a conceptual framework to support ecotoxicology research and risk
assessment, Environmental Toxicology and Chemistry, 29(3), pp.730-741.
Australian Institute of Food Safety, 2018. Food Safety Laws. [Online]. Available at:<
https://www.foodsafety.com.au/resources/videos/food-safety-laws>. [Accessed on 1September
2018].
Collet, J., 2014. Climate Change and Australian Food Security. [Online]. Available at:<
http://www.futuredirections.org.au/publication/climate-change-and-australian-food-security/>.
[Accessed on 1September 2018].
ePortal, 2018.AUSTRALIA: ECONOMIC AND POLITICAL OUTLINE. [Online]. Available at<
https://en.portal.santandertrade.com/analyse-markets/australia/economic-political-outline>.
[Accessed on 1September 2018]
HABC, 2018.Geopolitical assurances of stability for business and investment. [Online]
Available at:< http://www.habc.gr/australia_geopolitical.asp>. [Accessed on 1September 2018]
Lim, S.S., Vos, T., Flaxman, A.D., Danaei, G., Shibuya, K., Adair-Rohani, H., AlMazroa, M.A.,
Amann, M., Anderson, H.R., Andrews, K.G. and Aryee, M. (2012) A comparative risk
assessment of burden of disease and injury attributable to 67 risk factors and risk factor clusters
in 21 regions, 1990–2010: a systematic analysis for the Global Burden of Disease Study 2010,
The lancet, 380(9859), pp.2224-2260.
Restaurant & Catering magazine, 2017.Foreign tourists spend big in Australian cafés and
restaurants. [Online]. Available at:< http://rca.asn.au/magazine/foreign-tourists-spend-big-
australian-cafes-restaurants/> [Accessed on 1September 2018].
Rodgers, S., 2007. Innovation in food service technology and its strategic role. International
Journal of Hospitality Management, 26(4), pp.899-912.
7

Saad Andaleeb, S. and Conway, C., 2006. Customer satisfaction in the restaurant industry: an
examination of the transaction-specific model. Journal of services marketing, 20(1), pp.3-11.
Tjoa, S., Jakoubi, S. and Quirchmayr, G., 2008, March. Enhancing business impact analysis and
risk assessment applying a risk-aware business process modeling and simulation methodology.
In Availability, Reliability and Security, 2008. ARES 08. Third International Conference on(pp.
179-186). IEEE.
8

APPENDIX
Table 4: Risk identification
Rank Score Calculated risks
1 17 Low quality related issue
2 16 Technological risk
3 15 Employee development
4 13 Pressure of stakeholder
5 12 Political pressure
Table 5: Score
Consequences
level
Score Interaction
level
Score Likelihood
level
Score
No effect 0 Not
interactive
0 None 0
Very low effect 1 Very low
interactive
1 Less than 30% 1
Low effect 2 Low
interactive
2 31 to 45% 2
Medium effect 3 Moderate
interactive
3 46 to 60% 3
High effect 4 High
interactive
4 61 to 90% 4
Very high effect 5 Very high
interactive
5 91 to 100% 5
9