The Risk Assessment Of Starbucks Risk Management

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Register to read the introduction… The qualitative technique compares and contrasts the effect risk will have on the final project. This technique identifies and addresses the risk level for management, staff, and everyone involved in the project. Project managers can identify and resolve the problem before it becomes a risk factor. Quantitative technique compares the outcomes based on data such as numbers and projections. Computer models are used in assessing quantitative techniques. This technique implement safety measures in order to avoid risk. Qualitative techniques take brainstorming, assumption analysis, Delphi, interviews, hazard and operability studies, failure modes and effects critically analysis, checklists, prompt lists, risk registers, risk mapping, probability impact tables, risk management chart, and project risk management mapping to assess the final project. Qualitative technique has been considered to be more valuable than quantitative techniques. It is recommended as the initial risk assessment for any projects. Quantitative techniques take decision trees, controlled interval memory techniques, Monte Carlo simulation, sensitivity analysis, and probability impact grid analysis to form models (Merna & Al-Thani, …show more content…
This risk assessment will bring a careful financial examination so that precautions will weigh up more than to prevent future losses. Also is important to consider the difference between profit maximization and wealth maximization. Profit maximization is a short-term or single period, to achieve goals within one year. In contrast, shareholder wealth maximization is a long term goal which is more complete and considers wealth in the long term, risk, and timing of return and stockholder’s return. Risk factors are present on the financial conditions and results of operations for Starbucks Corporation. New factors will emerge from time to time which might not be possible to predict the impact of these on the business. As the company state on their Annual Report for the fiscal year of 2012 that operating results have been in the past and will continue to be subject to a number of factors, many of which are largely outside control. Under these are: lower customer traffic or average value per transaction, increased competition, customers trading down to lower priced products, price increase necessary to cover costs of new products and/or higher input costs, decline in general consumer demand for specialty coffee products, adverse impacts resulting from negative publicity regarding business practices or the health effect of consuming such products, commodity costs for fluid milk and high-quality Arabica coffee, labor costs – increased health care costs and workers’ compensation insurance costs, adverse outcomes of litigations, construction costs associated with new store opening and remodeling of existing stores, delays in store openings for outside reasons and deterioration on credit ratings which limits the availability of financing and increase cost of obtaining financing (Starbucks Corporation,

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