New Juice Bar’s Risk Assessment in Boston

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Likelihood Certain Development Quality, technical requirements
Likely Budget
Positive Schedule Staffing Management Competitors
Unlikely Testing, Contractors Design Contractors Work environment, Customer
Rare
Insignificant Minor Moderate Major Extreme
Impact

Figure 1. Risk Sensitivity Matrix.

Risk assessment is an inseparable part of any business plan since a company has to be prepared for negative factors that it may face in a target market. Therefore, defining the issues that a business venture such as a juice bar may face in the selected market is critical for its further success. Due to the challenges associated with the production quality and the durability of the raw materials, it is necessary to focus on the risks related to quality and technical requirements.

For the same reason, the issue of schedule will have to be addressed to minimize the procurement and production time, thus reducing the threat of spoilage (Snyder and Worobo 145). Finally, budgetary considerations should be taken into account to minimize financial risks and create the setting in which the company will thrive.

It is worth noting that the issues of staffing and workplace environment, while seemingly insignificant at present, are going to play a large part in the risk management process in the future. To satisfy the demands of customers and meet the set quality requirements, the firm will need a devoted staff and an atmosphere in which employees will be willing to excel in their performance (Bromiley et al. 268). For this reason, one will need to invest in the creation of an environment in which employees will develop loyalty to the organization.

The issues of management and customer relationships also have to be deemed as crucial factors in drafting a risk management plan. Marketing a juice bar may be rather difficult given the current competitive rates in the food and beverage industry, which means that the company will have to invest a substantial amount of money into the management of the specified concerns. Creating a competitive advantage that will keep the juice bar a recognizable service will demand significant financial investments, which, in turn, will entail certain risks.

The problem of design and contractors falls under a category of comparatively insignificant factors, yet they also have to be addressed as possible risks. Specifically, the design may fail to convey the required message or can be misinterpreted by the target audience. Misunderstandings between the company and its contractors, in turn, will entail minor issues, yet is quite unlikely to happen. Similarly, the testing risks are not quite likely to occur and comparatively easy to resolve with the integration of innovative technology.

Risk Description Consequence Risk Response
1 Product spoilage and a drop in product quality Customer dissatisfaction Enhanced SCM and communication strategy
2 Lack of financial resources due to increased expenses Possible bankruptcy Lean management and waste reduction
3 Failure to develop a distinct brand different from competitors Low customer loyalty rates Focus on branding and marketing
4 Poor workplace environment and lack of motivation among the staff Drop-in production quality People-oriented corporate values
5 Drop-in customer loyalty rates Shrinking profit margins Improved communication with consumers

Figure 2. Risk Analysis Worksheet.

The results of the risk analysis shown in Figure 2 above indicate that the process of opening a juice bar is fraught with significant expenditures and demand taking moderate risks. To build a sustainable environment for the organization, one will have to develop the responses that allow maximizing the utility of the company’s current performance and reducing the negative effects of a possible threat.

Specifically, the issue of quality management has to be addressed by upgrading the current information management strategies and integrating innovative approaches into the Supply Chain Management (SCM) processes. Thus, the threat of spoilage will be reduced, with the quality levels rising. Similarly, the issue of budgetary constraints and the problem of expenses can be managed by introducing an improved model for waste management and resource allocation. Thus, the project is likely to become a success.

Works Cited

Bromiley, Philip, et al. “Enterprise Risk Management: Review, Critique, and Research Directions.” Long Range Planning, vol. 48, no. 4, 2015, pp. 265-276.

Snyder, Abigail B., and Randy W. Worobo. “The Incidence and Impact of Microbial Spoilage in the Production of Fruit and Vegetable Juices as Reported by Juice Manufacturers.” Food Control, vol. 85, 2018, pp. 144-150.

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