Risk management
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School
University of Maryland, University College *
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Course
MBA 610
Subject
Information Systems
Date
Dec 6, 2023
Type
docx
Pages
4
Uploaded by GeneralRose11159
Risk management
Risk management is extremely important when it comes to the design, construction, outfitting,
and stocking of the retail store for Terrapin Construction Supply, Inc. (TCS) in Brazil. “
Every
project, regardless of size, involves some sort of risk. Thus, it is critical that the project team
identifies key risks at the outset of the project and plans actions to manage such risks”
(UMGC, N.D., Para 1). For TCS, undertaking such a large venture involves a multitude of
areas that are at potential risk. The following outlines both the internal and external risks
associated with the Terrapin Construction project.
Internal Risks
1.
Inadequate resources:
Working in another county, there is a risk of not having
enough resources, such as manpower or materials, to complete this project within the
given timeframe. Manpower is dependent upon available employees and materials are
reliant upon shipping and product availability.
2.
Poor project planning:
If the TCS project is not adequately planned and the
requirements are not clearly defined, it may result in delays, cost overruns, or quality
issues. These are issues that will extend our timeline and interfere with our critical
path.
3.
Lack of experience in international expansion:
With this being the first international
store, we run the risk of the team lacking the necessary experience and knowledge to
navigate the challenges and complexities of setting up a store in a foreign country.
4.
Difficulties in sourcing local suppliers:
TCS carries products from over 3,000
vendors worldwide, but sourcing local suppliers in Brazil will be a new challenge.
Being able to identify reliable and cost-effective local suppliers for the specific needs
of the store may take time and may not be as efficient as the existing vendor network.
5.
Staff recruitment and training:
Hiring and training a new team of employees for the
international store may be a challenge. Finding qualified and experienced staff who are
familiar with the local market and culture could be difficult. Additionally, training
these employees to adhere to TCS's standards and processes may take time and
resources
.
External Risks
1.
Economic instability in Brazil:
If there are Fluctuations in the Brazilian economy,
they can impact the demand for home improvement and building supply products.
Furthermore, if there is a recession or economic downturn, consumers will cut back on
spending, affecting TCS's sales and overall revenue.
2.
Competition from local retailers:
TCS will be entering a market that is already
dominated by local retailers. These Brazilian competitors will have a better
understanding of local consumer preferences and may offer more competitive
pricing.
TCS will need to figure out how to differentiate itself and provide value-added
services to attract local/loyal customers.
3.
Exchange rate fluctuations:
Exchange rate fluctuations: With TCS being an
international store, it will have to deal with currency exchange rates. These
fluctuations in the exchange rate between the US dollar and the Brazilian “real” can
impact TCS's costs and profitability. A sudden depreciation of the real can increase the
cost of importing products and equipment for the store.
4.
Language Barriers:
A language barrier may hinder effective communication and
collaboration between team members. Since this is the first international store for TCS,
it is likely that there will be a mix of employees from different countries and cultures,
each speaking their own native language. If these team members are unable to
effectively communicate due to language barriers, it can lead to misunderstandings and
mistakes in the design, construction, outfitting, and stocking of the store. This results
in delays, rework, and additional costs for the overall project.
5.
Infrastructure and logistical challenges:
Brazil's current infrastructure may not be as
developed or efficient as what TCS is used to in the United States. This could lead to
challenges in terms of transportation, supply chain management, and distribution,
potentially impacting the store's ability to receive
and restock inventory efficiently.
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References
UMGC. (2023, October 27). Learning Topic. Project Risk and Risk Register.
leocontent.umgc.edu/content/scor/uncurated/mba/2218-mba670/learning-topic-
list/project-risk-and-risk-register.html?ou=922490.