Performance and Risk Strategy

In: Business and Management

Submitted By Pikkewyn
Words 302
Pages 2
A speculative (possibility of a positive or negative outcome; not a “pure risk”) uncertainty associated with relying on the quality controls of outsourced supplier.
Application:
There is a risk that Bulldog Trailers Ltd may obtain inferior quality “extras” from suppliers , should the suppliers change their strategy in future and decide reduce their input costs to survive possible recessionary times. (NB: Made those words bold to show my understanding of how risk relates to an uncertainty)
Bulldog Trailers Ltd has no quality control over the “extras” sourced from external suppliers. This is because the “extras” require specialized production technology that the company does not have. It will be difficult for Bulldog Trailers Ltd to verify that the “extras” have been built using consistent standards and specifications, despite the fact that the suppliers are “selected on the basis of quality”.
Reputational Risk
Definition: A speculative uncertainty that is associated with the public’s perception of a company because of quality controls around a product, service delivery and the overall customer experience.
Application: There is a risk that Bulldog Trailers Ltd may have a tainted reputation as the result of the possibility of clients not being satisfied with the quality of the “extras”. The clients may spread the word about the poor quality of the “extras” and return the trailers for a full refund.
Third party risk
Definition: A pure (outcome that can only be bad) uncertainty linked with the reliance on third parties to deliver critical components of the finished product.
Application: There is a risk that the external suppliers may delay delivery of the “extras” to Bulldog Trailers Ltd, which creates a possibility of Bulldog delivering the completed trailer late to the consumer. This may harm the reputation of the company as the clients could spread the…...

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