Risks in Kgalagadi Breweries Limited (KBL)
KBL is a private entity in the fast moving consumer goods industry focusing on beverages. According to Hopkin (2012), a Risk is an event with the ability to impact (inhibit, enhance or cause doubt about) the mission, strategy, projects, routine operations, objectives, core processes, key dependencies or the delivery of stakeholder expectations. The following significant risks have been identified as they can cause an impact on organizational goals and objectives in the marketplace;
1. Distribution of new prices delayed [Control Risk – Internal]
2. Out of stocks impact reliability and customer relationships [Technical Risk - Internal]
3. Forklift damaged which hinders loading of orders [Operational Risk - Internal]
4. Complaints about shortage of branded merchandise [Reputational Risk - Internal]
5. Customers drink and drive [Reputation Risk - External]
6. Underage drinking [Reputation Risk - Internal]
7. Competitor activity is high [Competitor Risk - External]
8. Promotions are too complex for customers to participate in [Communication Risk – Internal]
9. Mileage claims [Financial Risk - Internal]
10. Late deliveries of orders [Operational Risk - Internal]
Figure 1: Controls for KBL Risks
• Risks 1, 2 and 7: Tolerate the risk and its likely impact
• Risk 3, 4, 8 and 9: Treat the risk to reduce the likely impact
• Risks 5, 6 and 10: Terminate the activity creating the risk
• No risks should be Transferred to another party
Risk mitigation strategies are action plans an organization conceptualizes after making a thorough evaluation of possible threats, hazards or detriments that can affect a project, a business operation or any form of venture (Bright Hub Project Management, 2011). The purpose of such strategies is to lessen or reduce, if not totally eliminate the adverse impacts of the known or perceived inherent in a particular undertaking.
Risks 1-6 and 8-10 are the...