Assessment Task 2: Risk Management Project

Task summary

This assessment task requires you in the role of Operations Manager of NatureCare Products to develop a risk briefing management report associated with the proposed Business expansion and then prepare for a meeting with your team by researching risks, as well as potential risk treatment options pertaining to the NatureCare Products business expansion project. Following this, you will meet with your team to brainstorm risks and then develop a risk Management plan, including action plan to implement identified risk treatments.

Assessment Task 2 Instructions

Carefully read the following:

You are the Operations Manager of a medium-sized Australian company, NatureCare Products, based in Brisbane. The company commenced business in 1996 and manufactures eco-friendly, high quality beauty skin care products. The business was established to cater for a growing demand for skin products that contain eco-friendly and natural ingredients. There is also an emphasis on eco-friendly packaging.

The company sells its products in health food shops across the country, as well as on-line through its own web site. The company targets customers that want high quality, eco-friendly products. Market research has identified that around 70% of customers are professional women aged 25 to 55.

Strategic priorities focus on business diversification and growth, specifically to increase market share by 10% and to expand the existing product range to attract more customers.

At a recent board meeting the two company shareholders and the CEO discussed options for expanding the business, including establishing a chain of retail outlets. The CEO has asked you to investigate this, undertaking a risk analysis on establishing a chain of retail outlets. The idea is to initially set up a retail outlet in central Sydney, Brisbane and Melbourne. The CEO and shareholders are keen to get the business expansion started as soon as possible so need to get your risk management plan in place immediately.

Currently the company employs the following staff: Accounts Manager, Marketing Manager, Marketing Assistant, Sales Manager, four customer service representatives, Office Manager and Administration Assistant, Operations Manager, as well as the CEO and two shareholders as indicated above.

The company currently has a risk management policy and procedure in place that incorporates the AS/NZS ISO31000:2009 Risk Management Principles and Guidelines.

Complete the following activities:

1. Review the risk context and conduct research.

• Review the case study information provided to you to determine the scope of the risk management process required, as well as the company’s risk management policy and procedure and information on risk management standards. Make notes for use in your report that address:
• Identification of internal and external stakeholders with whom you will need to consult to identify potential risks, as well as issues they are likely to raise as part of the risk management process.
• An analysis of the strengths and weaknesses of the company’s existing retail approach namely, online and through health food shops.
• Analysis of critical success factors, goals or objectives for the business expansion project.
• Following, this you are required to conduct a PESTLE analysis for NatureCare Products in order to identify key factors that impact on the business environment in which the company operates and their relevance in identifying risks. Make notes for use in your report.
• When you have completed your PESTLE analysis, you will be ready to write an initial report for the CEO as outlined in activity 2.

INTRODUCTION

“Nature care” is a well-established company from 1996 that produces skin care products. The products that are being produced by the company are eco-friendly and sustainable. The company produces a wide variety of natural products such as cleansing creams, moisturizing creams and facial scrubs. The company also sells its products through its website where its sales are good enough and is looking forward to improve the sales in the future.

The company is now financially stable but has recently found their competitors selling the same sort of products in the market. So, the company decides to improve its sales by at least 20% in the next three years. So, the marketing manager is required to come up with recommendation based on his analysis and research.

OBJECTIVES

• Increase the number of people who make a purchase while visiting the online store by 20%.
• Increase the number of retail outlets selling NatureCare Products by 150.
• To increase product awareness amongst the target market by 20%.
• To increase market share to 15%.
• To expand into at least one international market.
• To identify new products and new markets.
• To attain annual growth of at least 10% over the next three years.

SWOT ANALYSIS

STRENGTH

The company produces high quality eco-friendly products.

The company is well established with a strong financial position and can afford upto $150,000 to expand its business.

WEAKNESS

Limited product range

The company doesn’t produce products for men, infants and teens.

The company also doesn’t produce sun screen lotions or creams in a country like Australia where the temperatures are too high in summer.

OPPORTUNITIES

Based on the recent researches regarding the international market, the marketing manager has found that there is a good market in JAPAN;

• As of the recent population statistics of Japan, its population is approx. 126 million. Which is further segregated into 68 million women and 58 million men?
• As our  company  targets  women  aged  25-55  yrs,  the  population  of  the  women  in  these  ages  is around 42 million which makes JAPAN a huge market.

THREATS

As the marketing manager of this company, I discovered that there are new competitors in the market namely JURILIQUE and BOTANI which produce the same kind of products.

Based on the recent stats, these companies are well established as of now and are financially stable as well.

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PESTLE ANALYSIS

POLITICAL

The political factors include the rules and regulations of the country in which the company is working. As the company is established in Australia, it has to abide by the political laws of Australia.

The political factors in Australia would have a positive impact on the nature care products as the government is committed for the sustainability of the companies and the environment. The most recent elections resulted the Liberal Government which is very much for the business growth and had been facilitating the small to large enterprises by tax cuts and other facilities.  The bill presented in 2016 progressively reduces the corporate tax rate from 30% to 25% for all corporate entities. The recent news polls are indicating another win of Liberal Government which would be encouraging for the nature care future investment of $150,000.

ECONOMICAL

The economical factors include the exchange rates in the state where the company is working. Australia has a large economy with a per capita GDP on par compared to other western European countries.

Australia has high natural resources and also encourages foreign investments.

The Australian economy grew for 17 consecutive years before the global financial crisis.

SOCIAL

The social factors emphasises the technical trends in the society. The modern society is more into the skin care eco-friendly products to maintain their skin with a good hygiene. The society tends to use the best and natural ways to protect their skin in this atmosphere. The company nature care produces products that are highly sustainable and natural. Based on the view and thinking of today’s generation towards the skin care, nature care products have a higher demand comparatively to other products in the market. Mostly the women ageing 25-55 years are likely to be the most interested.

TECHNOLOGICAL

Technology has its own influence in today’s world in all the sectors of life. In a company like nature care trust and recognition play a major role in the progress and development of the company. The company is always looking forward to develop its products and rather introduce new products to meet the requirements of the customer and satisfy them accordingly. With the help of technology, it is quite easier to develop a good relationship with the customers. Technology provides a basic mean in between the company and the customers making it easy for them to access all the newer products and upgraded information of the products. The company’s website is easily accessible by any individual and the technical team of the company always strives forward to keep it up to date with no errors and defects. Customer Relation Management

A customer relationship management (CRM) system is an integral part of every marketing, sales, and business development department as well as CRM companies. Organizing and maintaining relationships with clients and maintaining a fantastic customer relationship management system is extremely important from small business CRM to big business CRM. A CRM system, in the form of top CRM software, helps users organize, categorize, and prioritize contacts, as well as monitor relationships with previous, current, and prospective clients and customers. The address books and rolodexes of the past have transformed into the CRMs of today. The “R” in CRM does exactly what you think it does: helps you keep a track of your relationships. It helps you keep a focus on customer relationship management.

A good business, whatever that may be, especially those that are CRM companies are overly reliant on well-formed and cultivated customer relationships. When a product is purchased, a lot more happens than a simple credit-debit transaction. Where did the customer find information about the product? How much time did it take for the customer to make the purchase? When was the last time the customer made a purchase? Answers to questions like this lay the foundation of the data that is stored in the CRM.

LEGAL

NaturecareCompany has grown big very fast and also has developed a few competitors in the process. So in order to stay in the market and maintain its profits and not lose their customers, it needs to follow all the legal legislations of the country in which it is established. The people of today’s generation are very much aware of the legal aspects. As the company is bound by a few rules and regulations, it’s very important to meet all the requirements and thereby develop their products satisfying all the legal legislations.

Product safety in Australia is governed by the Australian Consumer Law (ACL). The ACL is contained in a schedule to the Competition and Consumer Act 2010 (CCA). Relevant provisions can also be found in state and territory fair trading legislation.

ENVIRONMENTAL

The environmental factors leadto various global environment safety laws that must abide by the global standards. The World has now taken pledge to make the planet beautiful and pollution free. In this way, all the international brands are playing their role in showing their support to the world. So Nature Care can also play its part by supporting such campaigns and following the norms of the world.  The company has been one of the leading skin care brands in Queensland, Australia. It is always best to understand the external as well as the internal factors that affect the company on the whole. The factors that are mentioned before depict the analysis done for the brand. Therefore, it is always a good strategy to consider these factors while determining the policies for the company. In the same way, the future policies of the company could also be made as per the on-going trends.

2. Develop risk briefing report

This part of the assessment task requires you to develop an initial report for the CEO about the risk management project and processes and to seek approval to proceed. You will use the risk management template provided by your assessor, which also includes notes to assist you to provide your report.

Your report should address:

• Introduction, including scope of the risk management process and an outline of the risk management process as per the organisation’s policy and procedure, as well as how the organisation’s process aligns with the risk management standards as identified in the link provided to you.
• Your PESTLE analysis identifying the key factors that impact on the environment in which NatureCare Products operates and their relevance to the risk management process.
• Identification of internal and external stakeholders with whom you will need to consult to identify potential risks, as well as issues they are likely to rise as part of the risk management process.
• An analysis of the strengths and weaknesses of the company’s existing retail approach namely, online and through health food shops.
• Analysis of critical success factors, goals or objectives for the business expansion project.

Risk Management Report– NatureCareProducts

1. Introduction

NatureCare risk management policy and procedure outlines the principles to ensure the organisational objectives are aligned with an effective risk management process. This policy ensures all the operations and activities are developed in an appropriated culture of risk management.

The management principles for NatureCare are:

• A commitment to implement risk management effectively.
• A commitment to training and knowledge development in the area of risk management.

The risk management process of NatureCare aligns with risk management standards because all the risk processes are appropriately documented and provided as formal acknowledgement of their responsibility to comply with risk management policies and procedures.

2. PESTLE Analysis for NatureCare Products

3. Internal and external stakeholders

Internal: Managers, Employees and internal supervisors.

External: Government organisations, risk consultants, external advisors, risk auditors.

The above internal and external personnel will have responsibilities in the hazard identification process.  They need to be skilled at identifying a risk and determining the exact nature of a problem.  They need to be able to view the situation objectively and have the ability to communicate any advice they have in regard to handling the risk.

The challenge for them is to agree in the way they like to have information communicated, in an open manner.

4. Strengths and weaknesses

5. Critical success factors

The main objective of NaturalCare Products is to become in the number one retail store company in Australia, by selling the highest quality and better price natural products, using ecofriendly manufacture processes, expanding its product range in 10 % and having a minimum customer satisfaction of 95%.

The strategic objectives of NaturalCare are to:

• Expand the market in 20%, opening a new retail shop in Melbourne, Sydney and Brisbane.
• Achieve 100% ecofriendly suppliers to guarantee high quality products.
• Sustain a customer satisfaction rate of 95%.
• Expand product range to attract more customers.
• Improve the management processes and training within the organisation.
• Have sufficient store space to accommodate the range of products according with the expected demand.

3. Develop your Risk Management Plan

The final part of the assessment task requires you to develop the risk management plan using the risk management plan template.  Review the template prior to completing this task. Your risk management plan should include:

• The risks you have identified based on your research and brainstorming session. You must include at least five risks.
• An assessment of the likelihood of the risk occurring, as well as the severity of the risk should it occur.
• Identification of at least one suitable treatment measures for each of the five risks Priority rating (high, medium or low) to show the order in which risks must be treated.
• A risk action plan that sets out for each risk including:
• Risk description
• Impact of risk
• Recommended actions
• Resource requirements
• Timelines
• Responsibilities
• Monitoring processes

The above word files contain (a) Risk Management plan and (b) Risk management report.

Assessment Task 2 Checklist