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Kingston Bryce Limited Expansion – Module #3
Frank Fodero
Rasmussen University
GEB3422: Business Project Management
David Jones
CBE: No Due Dates
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Kingston Bryce Limited Expansion – Module #3
Risk Mitigation Plan
Project Overview
Kingston-Bryce Limited (KBL) is embarking on a major acquisition project to acquire MG Custom
Furniture, a competitor in the market. The acquisition is a crucial step in KBL's growth strategy, as it aims
to expand operations, increase market share, access new customers and technologies, streamline
operations, reduce costs, and triple the workforce. The project is expected to take 18 months to
complete, with a projected cost of $5 million.
However, as with any major project, there are potential risks involved, and KBL's Board of Directors is
determined to minimize the impact of these risks on the project's success. The company has received
rumors that another buyer has entered a bid to purchase MG Custom Furniture, which could potentially
disrupt KBL's acquisition project. To mitigate these risks, KBL has assigned a Project Manager Frank
Fodero to create a comprehensive risk mitigation plan.
As the Project Manager, I am responsible for identifying potential risks that may arise during the
acquisition project and developing a plan to minimize their impact. I will consider risks in the following
categories: cost, contractual, financial, political, and technical risks. This risk mitigation plan will provide
a foundation for informed decision-making throughout the project and serve as a reference for the
project team. The goal is to ensure that the acquisition stays on budget, within the 18-month timeline,
and successfully achieves the desired outcomes for KBL.
Risk Avoidance
The risk avoidance strategy is an initiative-taking approach aimed at reducing the potential impact of
risks associated with the acquisition project by Kingston-Bryce Limited (KBL). The strategy involves taking
steps to eliminate or mitigate the risk of competition from other buyers, which could potentially impact
the success of the MG Custom Furniture acquisition project. The following are the key elements of the
risk avoidance strategy:
1. Market research: KBL will conduct a comprehensive market research study to identify new
entrants in the market and their plans to acquire MG Custom Furniture. This information will
help KBL make an informed decision on whether to proceed with the acquisition or choose a
different target.
2. Alternative acquisition targets: KBL will consider alternative acquisition targets that are less likely
to face competition from other buyers. By choosing alternative targets, KBL will reduce the risk
of the MG Custom Furniture acquisition project being impacted by another buyer entering a bid
for the same target.
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3. Negotiations: KBL will engage in negotiations with the current owner, Matt Griffin of MG Custom
Furniture to secure the acquisition before any other buyer enters the scene. This will give KBL a
head start and a better chance of successfully acquiring MG Custom Furniture, reducing the risk
of competition from other buyers.
By following these steps, KBL will minimize the risk of competition from other buyers and ensure the
success of the MG Custom Furniture acquisition project. This will help KBL achieve its objective of
expanding operations and tripling the workforce, creating new job opportunities and contributing to
economic growth.
Risk Sharing
The risk sharing strategy aims to reduce the impact of the risk by sharing the risk with another party. In
the case of the acquisition project by Kingston-Bryce Limited (KBL), the following steps can be taken to
share the risk:
1. Joint Ventures: KBL can enter into a joint venture agreement with another company that has
expertise in the same industry. This will allow KBL to share the risk of the acquisition project with
the joint venture partner and minimize the impact of the risk.
2. Subcontracting: KBL can subcontract certain components of the project to other companies that
have the necessary expertise. This will allow KBL to share the risk with the subcontractor and
minimize the impact of the risk.
3. Insurance: KBL can purchase insurance to cover the risk of the acquisition project. This will allow
KBL to share the risk with the insurance company and minimize the impact of the risk.
By implementing the risk sharing strategy, KBL will be able to reduce the impact of the risk and ensure
that the project remains on track and is successful, leading to the expansion of operations and tripling of
the workforce. The joint venture, subcontracting, or insurance arrangements will provide KBL with added
security and peace of mind, allowing them to focus on the successful completion of the acquisition
project.
Risk Reduction
The risk reduction strategy aims to minimize the impact of the risk by reducing the likelihood of it
occurring or by reducing the impact should it occur. In the case of the acquisition project by Kingston-
Bryce Limited (KBL), the following steps can be taken to reduce the risk:
1. Project Planning: KBL will conduct a thorough project planning process to identify and assess the
risks associated with the acquisition project. This will help KBL to develop a plan to minimize the
impact of the risk.
2. Contingency Planning: KBL will develop contingency plans to manage any unexpected events
that may arise during the project. This will help KBL to minimize the impact of the risk and
ensure that the project remains on track.
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3. Risk Mitigation Measures: KBL will implement risk mitigation measures to reduce the impact of
the risk. For example, if there is a risk of cost overruns, KBL can implement cost-saving measures
such as reducing the scope of the project or negotiating better terms with suppliers.
4. Monitoring and Review: KBL will regularly monitor and review the progress of the project and
assess any potential risks. This will allow KBL to take proactive measures to reduce the impact of
the risk and ensure that the project remains on track.
By implementing the risk reduction strategy, KBL will be able to minimize the impact of the risk and
ensure that the project remains on track and is successful, ultimately leading to the expansion of
operations and tripling of the workforce. The project planning, contingency planning, risk mitigation
measures, and monitoring and review processes will provide KBL with the necessary tools to manage the
risk and ensure the successful completion of the acquisition project.
Risk Transfer Strategy
The risk transfer strategy aims to transfer the risk from the project to another party. In the case of the
acquisition project by Kingston-Bryce Limited (KBL), the following steps can be taken to transfer the risk:
1. Contractual Agreements: KBL can include clauses in the contract agreements with suppliers,
contractors, or other parties involved in the project that transfer the risk to those parties. For
example, KBL can include a clause that transfers the risk of cost overruns to the supplier.
2. Insurance: KBL can purchase insurance to cover the risk of the acquisition project. This will allow
KBL to transfer the risk to the insurance company and ensure that the project remains on track in
the event of any unexpected events.
3. Outsourcing: KBL can outsource certain components of the project to other companies that have
the necessary expertise. This will allow KBL to transfer the risk to the outsourcing company and
ensure that the project remains on track.
By implementing the risk transfer strategy, KBL will be able to transfer the risk of the project to another
party, reducing the impact of the risk on the project and ensuring that the project remains on track and
is successful, leading to the expansion of operations and tripling of the workforce. The contractual
agreements, insurance, and outsourcing arrangements will provide KBL with added security and peace of
mind, allowing them to focus on the successful completion of the acquisition project.
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Risk Matrix and Probability Chart
The risk mitigation matrix is a visual representation of the various risks that the Kingston-Bryce
Limited acquisition project may face, along with the strategies that have been identified to
mitigate each risk. Regular monitoring and updating of the matrix will be critical in ensuring that
the risk mitigation strategies are effective in reducing the impact of these risks. This will require
ongoing communication between project stakeholders and the project management team to
assess the effectiveness of the strategies, identify any new risks that may arise, and make
necessary adjustments to the risk mitigation plan. By continuously monitoring and updating the
matrix, Kingston-Bryce Limited can ensure that their acquisition project stays on track and
successfully achieves its objectives.
Risk Factor Risk
Category
Mitigation Steps Chance of
Occurrence
Impact
The cost of the
acquisition may
exceed the projected
budget of $5 million.
Risk
Avoidance
Conducting thorough
research and due diligence
on the financials of the
competitor before
proceeding with the
acquisition. This will help
KBL to accurately estimate
the cost of the acquisition
and ensure that the budget
is sufficient to cover all
expenses.
Low Mediu
m
The cost of the
acquisition may
exceed the projected
budget of $5 million.
Risk
Sharing
Negotiating a cost-sharing
agreement with the
competitor. This will help
to distribute the cost of the
acquisition between KBL
and the competitor,
reducing the financial
burden on KBL.
Low Mediu
m
The cost of the Risk Identifying and removing Low Mediu
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acquisition may
exceed the projected
budget of $5 million.
Reduction unnecessary costs in the
acquisition process. This
may include streamlining
procurement processes,
reducing travel expenses, or
negotiating lower costs for
goods and services.
m
The cost of the
acquisition may
exceed the projected
budget of $5 million.
Risk
Transfer
Securing funding from
external sources to cover
any cost overruns. This
may include obtaining a
loan from a financial
institution, seeking
investment from venture
capitalists, or using funds
from existing reserves. By
transferring the risk of cost
overruns to external
sources, KBL can ensure
that the acquisition stays on
budget.
Low Mediu
m
Disputes may arise
during the
acquisition process.
Risk
Avoidance
Clearly defining the
responsibilities and
obligations of both parties
in the acquisition
agreement can help to
minimize the risk of
disputes. This may include
specifying the roles and
responsibilities of each
party, as well as any
deadlines and performance
standards.
Very Low Low
Disputes may arise
during the
acquisition process.
Risk
Sharing
Including a clause that
allows for a mutual
termination of the
agreement can help to
reduce the risk of disputes
and ensure that both
parties are satisfied with
the acquisition. This clause
should be included in the
Very Low Low
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acquisition contract and
clearly outline the
conditions under which
either party can terminate
the agreement.
Disputes may arise
during the
acquisition process.
Risk
Reduction
Negotiating favorable
terms in the acquisition
agreement can help to
reduce the risk of disputes
and ensure that KBL is
protected. This may include
negotiating more favorable
payment terms,
establishing clear lines of
communication, and
clarifying any ambiguities
in the agreement.
Very Low Low
Disputes may arise
during the
acquisition process.
Risk
Transfer
Securing a performance
bond to cover any losses in
case of a breach of contract
can help to transfer the risk
of disputes to a third party.
This bond should be
obtained from a reputable
financial institution and be
sufficient to cover any
potential losses.
Very Low Low
The acquisition may
negatively impact
KBL's cash flow.
Risk
Avoidance
Projecting and monitoring
the cash flow impact of the
acquisition can help to
minimize the risk of
negative cash flow. This
may include forecasting the
cash flow implications of
the acquisition and
regularly monitoring the
financial performance of
the competitor.
Low Low
The acquisition may
negatively impact
KBL's cash flow.
Risk
Sharing
Negotiating a financial
indemnification clause in
the acquisition agreement
Low Low
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can help to share the risk of
financial losses. This clause
should be included in the
acquisition contract and
outline the conditions
under which KBL can
recover any financial losses.
The acquisition may
negatively impact
KBL's cash flow.
Risk
Reduction
Identifying and addressing
any potential financial
liabilities before closing the
acquisition can help to
reduce the risk of financial
losses. This may include
negotiating favorable terms
in the acquisition
agreement, such as longer
payment terms or a lower
purchase price.
Low Low
The acquisition may
negatively impact
KBL's cash flow.
Risk
Transfer
Obtaining financial
insurance to cover any
potential financial losses
can help to transfer the risk
of financial losses to a third
party. This insurance
should be obtained from a
reputable financial
institution and be sufficient
to cover any potential
losses.
Low Low
The competitor may
have hidden
financial liabilities
that negatively
impact KBL's
financials.
Risk
Avoidance
Conducting thorough
financial due diligence on
the competitor can help to
identify any potential
financial liabilities. This
due diligence process
should include reviewing
the competitor's financial
statements, tax records,
and other financial reports.
Medium Mediu
m
The competitor may
have hidden
Risk
Sharing
KBL can negotiate a
financial indemnification
Medium Mediu
m
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financial liabilities
that negatively
impact KBL's
financials.
clause in the acquisition
agreement. This clause
should outline the
conditions under which
KBL can recover any
financial losses resulting
from hidden financial
liabilities. By including this
clause in the agreement,
KBL can ensure that they
are protected against any
unexpected financial losses.
The competitor may
have hidden
financial liabilities
that negatively
impact KBL's
financials.
Risk
Reduction
KBL can identify and
address any potential
financial liabilities before
closing the acquisition. This
may include negotiating
favorable terms in the
acquisition agreement, such
as longer payment terms or
a lower purchase price. By
addressing these potential
liabilities, KBL can
minimize the impact of
hidden financial liabilities
on their financials.
Medium Mediu
m
The competitor may
have hidden
financial liabilities
that negatively
impact KBL's
financials.
Risk
Transfer
KBL can obtain financial
insurance to cover any
potential financial losses.
This insurance should be
obtained from a reputable
financial institution and be
sufficient to cover any
potential losses. By
transferring the risk of
financial liabilities, KBL
can ensure that they are
protected against any
unexpected financial losses
and minimize the impact of
hidden financial liabilities
on their financials.
Medium Mediu
m
10
Changes in
government
regulations may
negatively impact the
acquisition.
Risk
Avoidance
To minimize the risk of
changes in government
regulations, KBL should
stay informed about the
regulatory environment
and adjust the acquisition
plan accordingly. This may
include monitoring changes
in regulations, consulting
with legal experts, and
engaging with government
officials. By staying
informed about the
regulatory environment,
KBL can make an informed
decision about the
acquisition and minimize
the risk of changes in
government regulations.
Low Mediu
m
Changes in
government
regulations may
negatively impact the
acquisition.
Risk
Sharing
To share the risk of changes
in government regulations,
KBL can negotiate a clause
in the acquisition
agreement that allows for
termination of the
agreement in case of
changes in government
regulations. This clause
should outline the
conditions under which
KBL can terminate the
agreement in the event of
changes in government
regulations. By including
this clause in the
agreement, KBL can ensure
that they are protected
against any losses resulting
from changes in
government regulations.
Low Mediu
m
Changes in
government
regulations may
Risk
Reduction
To reduce the risk of
changes in government
regulations, KBL can
Low Mediu
m
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negatively impact the
acquisition.
engage in proactive
lobbying efforts to mitigate
potential risks. This may
include participating in
industry associations,
supporting regulatory
initiatives, and engaging in
discussions with
government officials. By
being proactive in the
regulatory environment,
KBL can reduce the risk of
changes in government
regulations and ensure a
successful acquisition.
Changes in
government
regulations may
negatively impact the
acquisition.
Risk
Transfer
To transfer the risk of
changes in government
regulations, KBL can
obtain regulatory risk
insurance to cover any
potential losses. This
insurance should be
obtained from a reputable
financial institution and be
sufficient to cover any
potential losses. By
transferring the risk of
changes in government
regulations, KBL can
ensure that they are
protected against any
unexpected losses and
minimize the impact of
changes in government
regulations on their
acquisition.
Low Mediu
m
The competitor's
technology may not
be compatible with
KBL's existing
systems.
Risk
Avoidance
Conducting thorough
technical due diligence on
the competitor's technology
before proceeding with the
acquisition.
Medium Mediu
m
The competitor's Risk Negotiating a technology Medium Mediu
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technology may not
be compatible with
KBL's existing
systems.
Sharing transfer agreement with the
competitor to ensure both
parties share the
responsibility of ensuring
compatibility.
m
The competitor's
technology may not
be compatible with
KBL's existing
systems.
Risk
Reduction
Identifying and addressing
any compatibility issues
before closing the
acquisition. This could
include modifications to the
competitor's technology or
KBL's existing systems to
ensure compatibility.
Medium Mediu
m
The competitor's
technology may not
be compatible with
KBL's existing
systems.
Risk
Transfer
Securing a technical
support agreement to cover
any potential technical
issues after the acquisition.
Medium Mediu
m
The competitor's
technology may have
security
vulnerabilities that
could compromise
KBL's systems.
Risk
Avoidance
Conducting thorough
security assessments of the
competitor's technology
before proceeding with the
acquisition.
Medium Mediu
m
The competitor's
technology may have
security
vulnerabilities that
could compromise
KBL's systems.
Risk
Sharing
Negotiating a security
clause in the technology
transfer agreement to
ensure the competitor is
responsible for ensuring the
technology is secure.
Medium Mediu
m
The competitor's
technology may have
security
vulnerabilities that
could compromise
KBL's systems.
Risk
Reduction
Implementing security
measures to mitigate the
impact of any potential
security vulnerabilities.
Medium Mediu
m
The competitor's
technology may have
security
Risk
Transfer
Securing cyber security
insurance to cover any
potential losses in case of a
Medium Mediu
m
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vulnerabilities that
could compromise
KBL's systems.
security breach.
The cost of training
and retraining
employees may be
higher than
expected.
Risk
Avoidance
Conducting a thorough
assessment of the skill
levels of employees before
proceeding with the
acquisition.
Low Low
The cost of training
and retraining
employees may be
higher than
expected.
Risk
Sharing
Negotiating a human
resources agreement that
includes a cost-sharing
clause for training and
retraining employees.
Low Low
The cost of training
and retraining
employees may be
higher than
expected.
Risk
Reduction
Implementing training
programs to help
employees adjust to the
changes brought about by
the acquisition.
Low Low
The cost of training
and retraining
employees may be
higher than
expected.
Risk
Transfer
Securing funding from
external sources to cover
the cost of training and
retraining employees.
Low Low
The competitor may
back out of the
acquisition
agreement.
Risk
Avoidance
Drafting a legally binding
agreement that includes
penalties for backing out
can help to ensure that the
competitor is committed to
the acquisition. This
agreement should clearly
outline the terms and
conditions of the
acquisition, as well as any
consequences for breach of
contract.
Medium Mediu
m
The competitor may
back out of the
acquisition
agreement.
Risk
Sharing
Including a clause that
allows for a mutual
termination of the
agreement in case party
Medium Mediu
m
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breaches certain conditions.
Negotiating a right of first
refusal clause that would
give KBL the option to
match any better offer from
a third party.
The competitor may
back out of the
acquisition
agreement.
Risk
Reduction
Negotiating favorable
terms in the agreement,
such as an exclusivity
period that restricts the
competitor from
entertaining other
acquisition offers.
Medium Mediu
m
The competitor may
back out of the
acquisition
agreement.
Risk
Transfer
Obtaining a contingent
liability insurance policy
that would cover any
damages incurred due to
the competitor's breach of
contract.
Medium Mediu
m
The competitor's
revenue may not
meet projections,
negatively impacting
KBL's financials.
Risk
Avoidance
Conducting thorough
market research and
analysis of the competitor's
revenue history and
projections.
Low Low
The competitor's
revenue may not
meet projections,
negatively impacting
KBL's financials.
Risk
Sharing
Including a revenue-
sharing clause in the
acquisition agreement to
mitigate the risk of revenue
shortfall.
Low Low
The competitor's
revenue may not
meet projections,
negatively impacting
KBL's financials.
Risk
Reduction
Implementing cost-saving
measures in the acquisition
process to mitigate the
impact of any revenue
shortfall.
Low Low
The competitor's
revenue may not
meet projections,
negatively impacting
KBL's financials.
Risk
Transfer
Obtaining revenue
insurance to cover any
potential financial losses
from a revenue shortfall.
Low Low
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The competitor may
have a significant
amount of
uncollected accounts
receivable,
negatively impacting
KBL's cash flow.
Risk
Avoidance
Conducting a thorough
review of the competitor's
accounts receivable and
credit policies before
proceeding with the
acquisition.
Medium Mediu
m
The competitor may
have a significant
amount of
uncollected accounts
receivable,
negatively impacting
KBL's cash flow.
Risk
Sharing
Negotiating a provision in
the acquisition agreement
for the competitor to cover
any uncollected accounts
receivable.
Medium Mediu
m
The competitor may
have a significant
amount of
uncollected accounts
receivable,
negatively impacting
KBL's cash flow.
Risk
Reduction
Implementing credit and
collections management
policies to reduce the
impact of uncollected
accounts receivable.
Medium Mediu
m
The competitor may
have a significant
amount of
uncollected accounts
receivable,
negatively impacting
KBL's cash flow.
Risk
Transfer
Obtaining accounts
receivable insurance to
cover any potential
financial losses from
uncollected accounts
receivable.
Medium Mediu
m
Conclusion
In conclusion, the risk mitigation plan developed by Kingston-Bryce Limited (KBL) aims to
ensure the successful completion of the MG Custom Furniture acquisition project. This plan
includes risk avoidance, risk sharing, and risk reduction strategies to minimize the impact of
potential risks associated with the project. By conducting market research, considering
alternative targets, engaging in negotiations, entering joint ventures, subcontracting, purchasing
insurance, conducting thorough project planning, developing contingency plans, implementing
risk mitigation measures, and regularly monitoring and reviewing the project progress, KBL can
mitigate the risks and achieve its objectives of expanding operations, increasing market share,
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accessing new customers and technologies, streamlining operations, reducing costs, and tripling
the workforce.
