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RM 357E Risk Management

Published : 22-Sep,2021  |  Views : 10

Question:

As discussed in class and handout, for Assignment you are building this assignment and assessing the controls surrounding the key risk identified (only 3 or 4 risk prioritized), and identifying any deficiencies/areas for improvement, and developing solutions to remediate.  In your paper, you need to describe the controls and evaluation, document your deficiencies (if any), and provide your recommendations to remediate, as warranted.

Answer:

This assignment is about risk assessment and risk remediation. In this assignment, 8 main risks of dealership sales department of Kia motors have been identified. Among all these risks, 4 have been prioritized, areas of improvement have been identified and some recommendations have been provided.  These risks are discussed below:

1) Information risks

2) Strategic risks

3) Tactical risks

4) Lack of the availability of skilled personnel

5) Unavailability of reliable way to track sales

6) Risk related with sales forecast

7) Risk of product duplication

8) Pricing risk      

Among all these 8 risks faced by sales department by the company, 4 major risks have been identified and along with areas Kia Motors. They are mentioned below.

1)  Lack of the availability of skilled personnel

It has been found that, some specific skill set is required to become a success full sales person. These skills are such communication skills, behavioral skills, marketing and technical skills such as basic computer knowledge (Chance & Brooks, 2015). It is the responsibility of the human resource department to check all these skills, before hiring an employee as a sales person. Unfortunately, among all the sales persons of Kia Motors, lack of technical and communication skill is very prominent.

Coaching and mentoring sales persons is the area of deficiency that the company needs to enhance to mitigate this risk.    

2) Risk related with sales forecast

The sales department of the company Kia Motors has to face risk related with sales forecast, as actual performance of the company may have to face shortcomings. It can occur due to damage of products, thefts and pilferage during transportation and warehouse storage.

Unavailability of the tracking technology in Kia Motors to track its products can be considered as the area of deficiency.    

3) Risk of product duplication

There are many new car companies are opening in the nearby vicinity. These companies are also able to provide similar types of cars at equal price or even in lesser price. It leads the company to the risk of product duplication. It can severely affect the sales performance of Kia motors in market.

Unavailability of appropriate sales promotion and providing fewer offers is the main area of deficiency in this case.    

4) Pricing risk      

While, launching a new product in the market, sales managers often set the price of a product depending on the uniqueness of the products such as utilization for a specific group of customers and availability of features (Lam, 2014). They can set a high price for a high quality of products. However, company Kia Motors often has to face pricing risks due to the different perception of the company and customers about a certain product.

The company does not conduct market analysis before setting price of a product. It is considered as one of the major area of deficiency for the company.

Recommendations     

1) The company has to develop appropriate strategy to provide coaching and mentoring to sales employees, so that their skill can be enhanced.

2) The company has conduct market analysis (SWOT analysis, PESTLE analysis, Porter’s five force analysis) before setting the price of a product.

3) ERP system needs to be implemented to keep track of the inventory. It will help to mitigate the shortcomings and meet the sales forecast.

References

Chance, D. M., & Brooks, R. (2015). Introduction to derivatives and risk management. Cengage Learning.

Glendon, A. I., Clarke, S., & McKenna, E. (2016). Human safety and risk management. Crc Press.

Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.

McNeil, A. J., Frey, R., & Embrechts, P. (2015). Quantitative risk management: Concepts, techniques and tools. Princeton university press.

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