Report

RISK MANAGEMENT

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Risk Assessment

It is almost immpossible to completely eliminate uncertainity in the business environment, but as many business scholars have pointed out, uncertainities can be managed by being transformed into planned uncertainities (Conklin, 2002). Put in other words, the aforementioned uncertanities are the risks that are innevitably in existence in all business environments. When venturng into a global business as planned by Allon Investments, evaluating a country’s risks is imperative. Determining the particular risk factors helps in denoting the necessary measures that ought to be taken when venturing into a business. This paper looks into a risk management situation by Allon Investments. The entity had a slight crisis following its decision to start up a branch of its business in a foreign country-China. It therefore had to deal with issues in the political, social, economic and capital platforms.

China is today seen as one of the most promising markets with the potential to even surpass the currently ranked first economy (Kramer & Porter, 2006). However, much care and caution ought to be taken when partaking in businesses within the country, or intending to do so. It is generally seen as having a volatile business atmosphere, which impending dangers if the necessary areas are not approached with due diligence. Entities- such as Allon, seeking to set up base in the Chinese market will have to take note of the underlying risk factors, their possible solution and how best to address each one of them. Looking at the case of Allon Investments, the potential risks that it most likely face are in relation to the nation’s politics, its economy, and cultural establishments.

The country’s political views have made transparency in the business field a rather scarce attribute. Existing and newly established businesses in China therefore have to rely on other avenues through which they can be successfuly pursue their endeavors. Guanxiwang is one such attribute, where business relations are set up through networks of people who may know one another. To a foreign enterpreneur such as Allon Investment, this is an unknown concept and it will pose a great risk of loss towards it before grasping the idea.

Issues such as trade policy and general economic instability form another serious risk factor that Allon Investment needs to take note of. It changes in monetary policies, fiscal, policies and trade polices deeply affect its economic stability and in turn, poses a potential risk to any investor seeking to set base in the country. According to conducted studies, the Chinese people have been confirmed to have very little-or no, distinction between their cultural underpinnings and business undertakings. This therefore means that Allon Investmeht will have to gain sufficient insight on the people’s culture before setting up their business in it. Failure to do so-as in the case of various other businesses, would lead to down right failure of its venture.

One strength that the entity has in its venture is its adaptability and ability to understand the local market. Allon has managed to show its prowess in quickly adapting to foreign markets and conforming to its particular demands. As much as this may be a task that is largely demanding and tricky, Allon Investment has managed to prove its competitors wrong over the years and take the necessary steps in order to ensure that it fits into the market. Looking at the given scenarion, this is nothing but another chance for it to take firm measures, and penetrate the market.

Time factor is one that many businesses and individuals have been unable to give due consideration over the years and as a result, led to the ventures being futile. Allon’s idea to focus on patience buidling and proper revenue expenditure come out as its main opportunities. The organization still has a chance of making it in the market if it manages to make proper use of the opportunity that it has and invest in the most strategically planned areas. There are numerous options from which the entity could choose from; with the main problem being which one is the best. It has sufficient capital to venture in the one it deems fit, enabling it go over a number of hurdles.

The team with which one venture into business in the Chinese market is another crucial factor. This comes out as Allon’s main threat, as it has to start seeking the most loyal persons to deploy in the foreign countries. Essentially, the businesses in the Chinese market are conducted among networks of persons, following the detrimental political influences. Newly established organizations in the market-such as Allon Investments, will have to quickly adjust to such systems of operation and create their own networks. More often than not, this is usually a tedious process that many organizzations fail in, opting to exit the market or other more expensive alternative. This is therefore the organization’s main risk according to the conducted assessment of the intended market. Organizations have to create such networks in the given time, or transfer their own team members into the new markets. This is also has its downside, as such individuals are never able to properly bond with the local market.

In having a clear view on the risk factors, an effective approach would be to have proper underlying strategies for the identification of expected outcomes. This would therefore require the entity to tabulate all possible risks and threats, before having a seperate classification of these risks as either: frequent, likely, occasional, seldom or improbable. These categories would help the business entity in determining whether the particular risk is a force to reckon with or a minor issue that could be easily mitigated.

In managing the risk, I would have resorted to marketing tactics that help in bringing more clients to the entity, so that they proceed as a unit. Advertisments would therefore be the chosen tactic.

The main purpose of advertisement is to promote a given service or product offered by a company in the market. There are a number of concep in marketing mix and this inlude the 7ps of marketing, where promotion plays a very crucial role in promoting a particular service or product , It focuses on the communication between the customer and the business.

Promotional strategy is often refered to as a ‘pull’ tactic that is employed in most marketing startegies and is considered key contributing factor to business success. Having said this , the marketing managers have the responsibility of choosing the most appropriate business marketing communication to be implimented inthe business advertising .Good business advertisement startegy need to concentrate on the customer and how to best contact the customer in addition to putting into consideration the message to be relayedd to the customer.

Complex corporate environments are continuously seen as difficult to operate in, hence the need to sufficiently shed light on how best to manage them during uncertainties. Essentially, these are business-oriented environments that revolve around various transactions of the business nature. The key to managing uncertainties in such markets is usually steadiness. Entities are advised to ensure they remain steadfast during periods of uncertainties while operating in complex corporate environments. By doing this, such entities will be able to surpass the first few hurdles related to such uncertainties before having to adjust in order to address more complex issues. Secondly, business entities are advised to make use of professionals in dealing with such uncertainties. Complex business environments may have uncertainties that are terribly hard to handle, hence the need to bring in experts to help. Having a set team of experts within the particular entity would make the process much easier and possibly faster. However, proper prior preparation is the best and ultimate way of dealing with such uncertainties. It has been said time and again, that serious entities ought to lay down measures for appropriate handling of any emergent issues while in the course of business.

In a nutshell, it can be noted that any business venture is started with the main intentions of prospering and outshining in its area of operation. These achievements do not come easily and therefore organizations have to put in lots of efforts in order to achieve the competitive advantage. Risk is an inevitable aspect of any business operations, hence the need to appropriately conduct risk assessments. It is through such evaluations that the organizations get to learn what they will most likely face in regards to their particular venture, giving them ample time to sufficiently comprehend the situation and develop the most suitable alternatives.

The businesses’’ strategic plans are some of the critical measures that have been put on the spotlight, these are some of the major processes that give the business its main direction in terms of its resources allocation as well as decision making in an attempt to achieve the corporate business strategy. Business at all-time should bear in mind and consider the most appropriate action to be taken in order to implement its strategic plan effectively. It is common that the strategic plan of any business deals with three obligatory questions that sought what need to be done, for who, and on how to surpass. Subsequently, the threats, Opportunities, weaknesses, and strength of the organizations are defined by assessing the businesses’ strategic plan.

Reference

Cavanaugh, J. M., & Prasad, A. (1996). Critical theory and management education: Some strategies for the critical business. Rethinking management education, 76-93.

Conklin. D. (2002). Analyzing and Managing Country Risks. The Organization Journal. 23(7).

Fogel. G. (2010). Business Environment in China: Economic, Political and Cultural Factos. Journal Of Emerging Knowledge On Emerging Markets. 34(76). 23-89

Kramer. M & Porter. M. (2006). Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Wall Street Journals. 71:3,

Yannoupoous. P. (2011). Defensive and Offensive Market Strategies for Market Success. Wall street Journal of Business. 2:13

RISK MANAGEMENT

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