This document is planed to provide an overview of risks that are involved with star bucks Coffee shop and the management plan to mitigate these risks before happening or minimizing the damaging effects of risks if they occur at all.
It will start by defining risk and then identify, analyze and evaluate risks.
It will grade risks based on its seriousness and likelihood of happening in the business.
Then, plans to mitigate these risks will be created and implemented to minimize risks at any given stage of functioning of the business.
The risk management plan will include the tasks and the allocated responsibilities to various staff involved in the business.
Supply chain risk
Definition: any changes in the information,…show more content… 3) Risk Assessment a) Identification of risk
Financial risk: opening of any small coffee shop in the Melbourne city would require at least a sum of $80,000. And given the competitiveness of the food industry, if the business is not successful there is a danger of loosing the money. Also, the general inflation rate is at 2% per year and the foreign exchange is tight at the instant. Therefore, there is a significant financial risk involved in setting up a business.
Location risk: Star bucks coffee shop is located on the banks of Yarra River creating a relaxing and pleasant atmosphere for its customers looking to have a good time. However, due to its locale to a river there is a certain level of a possibility that the coffee shop can be damaged in the event of river flooding. This would mean a loss of 1 million dollars as the property value and another $30,000 for the inventory. Thus, this risk seems very serious and damaging. Also, given the assumptions of climate experts the likelihood of river flooding is possible with the changing climate change in the recent years. However, the shops around the bank of this river located at a certain heights that can afford security to these businesses. But, it is still not possible to gauge the amount of protection these raised floor levels can give to these lands against flooding.