risk management strategies: Coffee Shop Project
Question
Task: What are the key risk management strategies for opening a coffee shop in Vancouver?
Answer
Executive Summary TEAM MEMBER 4
Risk management strategies is one of the critical factors which needs to be established properly and well conversed between the employees in an organization. There are different types of risk assessment management strategies. The first step in risk management strategies is about identifying the risk. And second step is to identify the analyze the likelihood of happening of that risk.
Based on the risk management strategies analysis, risk can be mitigated or transferred. Mitigation strategies include setting up of different security control procedures at the advent of attacks or threats. Risk can be transferred by taking insurance or choosing third-party work resources. Other methods can be implemented, which entirely depend on the organization’s structure, policies, and working procedures. So, appropriate strategies must be followed based on the need and necessity.
Risk Identification
The first step to start managing the risk is identifying the risk associated with opening a coffee shop in Vancouver, Canada. One of the best approaches to determine the risk is to create a Risk Breakdown Structure (RBS) to visualize the possible hazards and threats that could come along the way. The following RBS was made:
Figure 1: Risk Breakdown Structure for Coffee Shop Project
As shown in Figure 1, the identified risks show various categories applicable to the coffee shop project in Vancouver. External threats include market risks, such as changes in customer preferences, shifts in local coffee consumption trends, or intense competition from existing coffee shops. Regulatory risks could arise from shifts in municipal or provincial regulations related to food safety, health standards, or zoning requirements. Supplier risks may include issues with sourcing quality coffee beans, milk, or other ingredients and potential delays or disruptions in the supply chain.
Organizational risks include resource risks such as staffing challenges, training requirements, and employee turnover. Stakeholder risks involve managing relationships with various stakeholders, such as residents, neighborhood associations, and nearby businesses. Additionally, organizational support and governance risks could include challenges in obtaining necessary permits and licenses, securing financing, or maintaining effective communication within the project team and with stakeholders.
Technical risks encompass technology-related risks, such as potential disruptions in point-of-sale systems, online ordering platforms, or data security breaches. Data risk management strategiesmay involve collecting, storing, and protecting customer information and transaction data. Performance risks could include issues with equipment breakdown, inadequate infrastructure, or insufficient capacity to meet customer demand during peak hours.
Lastly, project management risk management strategies are crucial, including schedule risks related to construction or renovation timelines, cost risks associated with budget overruns, and communication risks that could impact coordination among team members, suppliers, and stakeholders.
risk management strategies Assessment
As per the above-identified risks, we can assess the severity, probability, and likelihood of the same that’ll impact the business of opening a coffee shop by preparing a risk assessment form. The same can be taken into consideration based on prioritizing which risk factors must be addressed first.
The risk assessment form for opening a coffee shop is as follows:
|
Risk Event |
Likelihood |
Impact |
Detection Difficulty |
|
Market Risk |
4 |
5 |
3 |
|
Financial Risk |
3 |
5 |
5 |
|
Location Risk |
4 |
5 |
5 |
|
Operational Risk |
3 |
4 |
5 |
|
Regulatory and Compliance Risk |
5 |
5 |
5 |
|
Supplier and Vendor Risk |
3 |
3 |
3 |
|
Reputation Risk |
2 |
5 |
5 |
|
Staffing and Training Risk |
1 |
3 |
5 |
|
Technology and Data Security Risk |
2 |
2 |
5 |
|
External Factors |
1-4 |
5 |
3 |
Market risk management strategies
Although market circumstances can change, they are not very unpredictable, therefore the likelihood is only mild. The impact is substantial since it greatly impacts revenue and customer acquisition. The likelihood of detection is moderate because market trends may be tracked through a competitor and market research.
Financial Risk
There is a moderate likelihood because a variety of reasons could lead to financial difficulties. Due to the potential for financial instability or even corporate bankruptcy, the impact is significant. Since financial performance can be regularly checked through correct accounting procedures, detection is quite likely.
Location Risk
The likelihood is low to moderate, depending on how thoroughly we conducted your investigation and selecting procedure. A bad location can have a significant negative influence on client traffic. The likelihood of detection is high since careful analysis can be used to evaluate any potential threats related to the place.
Operational Risk
The likelihood is moderate because operational difficulties can happen but are frequently successfully managed. The impact is significant as daily operations disruptions can affect revenue and customer satisfaction. The likelihood of detection is high since ongoing monitoring and feedback mechanisms might identify operational problems.
External Factors
Depending on the particular external factors, the likelihood ranges from low to high. Unexpected incidents can disrupt business operations and revenue sources, which has a significant impact. Monitoring of outside elements, such as weather predictions or geopolitical movements, has a moderate impact on detection, The above risk management strategies and the rest can be easily understood with the help of a Severity Matrix, which is as follows:
RISK SEVERITY MATRIX
Risk Response Development TEAM MEMBER 2
Risk Response Control TEAM MEMBER 3
Conclusion TEAM MEMBER 4
Risk management strategies is a critical aspect one needs to focus on to ensure the organization doesn’t stop functioning if any major problem or crisis happens. The main aim of risk management strategies is to mitigate or transfer risk so that the business can perform its functions. This looks simple or easy to handle but is not as easy as it sounds.
As risk management strategiesand threats are unknown, predicting the threat or any incoming attacks takes work. So, a wide range of security protocols or procedures must be followed to ensure everything is in place. Timely upgrades and periodic maintenance is also critical factor needed to be considered to keep the threats in check.
Many security protocols are being followed for risk management strategies. However, attacks or threats still happen due to the inefficiency of humans, as they are the weakest chain link in the organization. Accidentally or willingly, people intend to make mistakes that can create a massive mess for the organizations. Until or unless the change doesn’t happen in the people, efficient and proper risk management strategies cannot be made.
References
Identify the risk management strategies associated with your project
Determine the probability of occurrence
Impact
Who is responsible?
Link it with work breakdown structure and the risk breakdown structure
Associate factor such as: Technical risk, project management risk ,
