9. 0 Critical Risk Factors
9. 1 Management Risks
Lack of Business Skills and Experience
None of any business is going to be easy. Each business device is inevitable to face challenges and hazards. Being a 'young' collaboration management team, our management team is insufficient field experience and business relationship skill in controlling our company. For the reason that there will have many doubt and problems happen along the business enterprise operation that five of enterprisers ourselves cannot predicted and failure handling. It is a substantial weakness for an enterprise management team who operate in the very early period.
Conflict between Partners
Conflict is another inevitable part of business life when there are incompatible issues happened between one another. Partners may have have difficulty due to different ideas while making the business decision. If poor conflict remains unresolved or not taken out for long time frame, partners will probably remaining the management team or dissolve the partnership relationship. The effect of poor turmoil management may give a negative impact on operations and difficulty in achieving the company eyesight and quest.
9. 2 Marketing Risks
Low Brand Recognition
In this strong competition marketing, our company is threatened from the existing competitor. There is no hesitation for our company might face some obstructions such as the low brand acknowledgement for our new technology product. The client might not acquainted with our brand name of the product which can give us less appeal when customer making the relevance product purchasing decision. As compare to the competition who has higher brand acknowledgement, they established a well reputation, bigger capital, and superior customer's data, competent and proficient in hold on to their customer devotion than our company. Consumer may understand risk and unfamiliar about our product. Hence, this is a challenging issue that our company needs to concern in choosing appropriate ways of penetrate into the market.
Market entrance strategy
Our products are considered as completely new product in Malaysia. Failing in selection of an appropriate costing, marketing, or circulation strategy is a significant potential risk. For example, with an improper promotional strategy in inadequate way or wrong target audiences might lead to loss of possible client and gains. Thus it is important in chosen mass media and channel to construct customer recognition. Another reason is our opponents curently have their existing customers and brand loyalty therefore the challengers are less likely to devote to advertising. However, our company is a fresh established firm and it requires to put more effort and spending in advertising campaign through promotion and advertising. This can lead to increment of bills in running the business enterprise and thus decrease the competitiveness in other procedure area.
9. 3 Operating risks
Employee insufficient Experience, Knowledge and Skills
Our company is lack of experienced staff in handling equipment and tools. As the equipment and tools have different use and function, thus employees may find it difficult to handle new equipment and tools that they are not sure of. Hence, we may face difficulty in development process and working management and it could increase our lost resources. Missing specific knowledge and skill are critical in every business process phases, which problem may become the weakness of our company.
Supervisor is dependable in staffing. Sometimes, it is hard for them to control on staff behavior. Employees will probably proposing complaint to management on different issues. New employees and personnel possess less devotion at the sooner stage of the business enterprise procedure. The increase of sick leave or absenteeism may cause the shortage of manpower where all of them are barely to find any replacing in shorter time. Except for the permanent employee, the foreign worker from GPGC might take time to displace even though they will work in daily basis. Worker absenteeism without notice is a major potential problem that company need to matter. Besides that, turmoil between employees may happen in company. In the event the conflict and issue cannot solve by supervisor, it'll make trouble to the business operation. However, it is also difficulty in chosen an experience supervisorto control the foreign worker because of the communication constraint.
9. 4 Financial Risk
To launch a new product to market, we have to invest large amount of capital in dealing with suppliers, employ the service of employees, marketing, purchasing etc. We have to have sufficient capital in the begging in our day-to-day business operation. However, the unstable monetary downturn might impact our company financial planning. During inflation and financial downturn, customer purchasing power is reducing. For the reason that moment, they are likely to save money somewhat than spending. In fact the demand for product may drop critically during this period of energy. This scenario may lead our company make low revenue or even worse, facing deficits.
9. 5 Intellectual Property Infringement
Counterfeit products are likely to have a fraudulent company logo and brands to catch the attention of customers. When our product has been launched in market, our product design or features can be copied or imitate by our rival. It is bring about intellectual property infringement like patent infringement or trademark infringement occurs when someone uses our intellectual property without our agreement. Counterfeit product will reduce our product uniqueness and have an impact on our company reputation to be low quality.
9. 6 Other Risks as Appropriate
Many unpredicted circumstances may happen in the workplace which can cause fires or explosions. Situation that could cause in fireplace such as electricity brief circuit, electro-mechanical equipment, wood, newspaper, plastic, lamps and injuries which can cost our company to have a huge lost.
Burglary and Theft
Running a company is risk as you are unable to predict exactly what will happen so you cannot completely control people habit. For example, criminal offense such as burglary and theft can be devoted by either inner staff or exterior people. Although took place internally also scarcely to be tracked.
9. 7 Contingency Plan
9. 7. 1 Management Risk
In order to resolve the problem of inexperience, our management must raise our skills bottom part. We are encouraging we management to attend management classes, seminar, risk management training, negotiation training courses and command program to up grade our management potential. Those training courses are designed to improve our authority and management skills including time management, issue management, developing way of thinking, problem solving, presentation strategies, communication and proper planning. Thus, all those skills and programs are needed in develop our capability to meet our business targets.
Besides that, we have to ensure that our management performs without conflict and even more fairness. Management should follow company guidelines, policies and standard operating procedures as guidance. So that everything operates under a clear and orderly condition.
9. 7. 2 Marketing Risk
We can increase our brand recognition by performing marketing analysis. The marketplace analysis present useful information about the industry and market which our business needs to enter. We can obtain the useful information including our customer purchasing trends, spending vitality and competition information. Predicated on the analysis, we can reduce business inability as we able to understand about our customers' needs and select appropriate market access strategies to penetrate into the target market.
The most importantis small down our marketplace into a workable size. Next, we want to target specific people who have advertisement and promotion in creating brand awareness to our product. For instance, there are extensive new public websites and they will provide a free service, and online adverting available. In this manner, we can directly reach our possible client by advertising, supplying discount, voucher and promotion through print media, newspapers and trade show. When our product is look more and more times to the potential customer, it will increase our product brand acknowledgement and revenue.
9. 7. 3 Operating risks
Employee training and development program will be providing every three month. Employee will attend this program selectively to boost their ability and performance. Besides, hire an event supervisor can help in control our personnel effectively as they learn how to build marriage and coping with employee's grievance. They are really representing company in general management of employee concern, problem and complaints. To meet employee needs, management and supervisor shall constantly talk with worker to show their concern. We will increase permanent employee wages 10% for 1st 12 months and 20% for 2nd calendar year accordingly to enhance their inspiration and loyalty. Other additional motivation such as health insurance, getaways and OT claim will given to appreciate their effort.
9. 7. 4 Financial risk
To reduce financial risk, our company accounting and finance team are also playing important role. They are responsible for your day to day accounting transaction of the business enterprise. Furthermore, they need to estimate all the employees' incomes, company earning, cash payment, income tax and so forth. They are assisting our company in checking and keep an eye on company bills is go beyond the budget such that it is always have sufficient cashflow in daily procedure. Therefore, an excellent accounting and financing department is required to provide information to aid our management in making correct budget planning.
9. 7. 5 Intellectual property protection
Our company will register for the brand and patent to protect our product imitate by other people. Register for hallmark and patent prevent other planning or merchandising similar product under a evidently different symbol. Hence, we can protect our company reputation and profitability. If any intellectual property infringement recognized we can take legal action to judge against the party. It is the ownership right that we can use to safeguard our product from imitate.
9. 7. 6 Other contingency plan
We need to avoid our company from flames and keep people safe. Flames detection and caution systems will be install in our stock area especially assemblage line to notify people when there's open fire. After the alarms active from smoke cigars and temperature it is alert that somewhere is on fire. Next, firefighting equipment must be installed, examined and train our staff to use them so that they know how to use them in critical moment in time. Flames drills training will get at least one times per calendar year to teach them about the fire risk management. To minimize burglary and theft arise in company installing Closed-Circuit Television (CCTV) must be employing.