7.

Risk Assessment

1
RISK ASSESSMENT
The risk assessment addresses potential threats that will limit the strategic plan of the business
and provide possible mitigations measures.

Risk Identification
• Perceiving hazards
• Identifying failures
01 • Recognizing adverse consequences
Risk Assessment
Methodology
Risk Evaluation
• Describing risk
This defines the approach for analyzing
potential threats and vulnerabilities to
02 • Estimating risk probability
business operations and how such
threats can be mitigated.

03 Risk Mitigation

• Implementing strategy
• Reducing negative effects.

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RISK ASSESSMENT (1/4)

According to the risk assessment matrix, technology advancement , price risk, market competition,
and fire hazard, technology will critically affect the success of business.

IMPACT KEY
MINOR MODERATE MAJOR CATASTROPHIC High Risk
PROBABILITY
Moderate Risk
• Supply shortage Low Risk
• Economic Headwind
• Goal/Impact Conflicts
HIGH • Legal Risk

• Human resource • Market and

Competition
MODERATE • On site violence • Key man risk

• Government
• Unforeseen losses
LOW • Reputation Risk
• Exchange rate risk
regulations

RARE

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 RISK ASSESSMENT (2/3)
The risk assessment addresses potential threats that will limit the strategic plan of the business and
provide possible mitigations measures.

Risks Identified Risk Evaluation Risk Mitigation

• The firm is likely to suffer the impact of strict competition

The competitive assessment implies that the market is moderately
and negative actions from competitors such as brand collateral
Market and accommodating for fresh investments and operators can still make
damage and price wars. It should join industry associations
Competition Risk friendly returns which might lead to influx of new entrants thereby
and ensure that it has a strong voice of advocacy against any
intensifying competition
such occurrences

• Aggressively forward integration of its business model with

FBV is very reliant on its strategic supply network and is able to
intense focus on fast fashion.
Economic Headwinds therefore price competitively. Any breach in the supply network
• Invest in and consolidate on its brand equity to position as the
either directly or by competition could affects its margin.
market leader.

• The company should ensure an adequate buffer of raw

Breach in Supply FBV’s supply is very dependent of FX and shifts in FX policy and
materials and sell product strategically with insight from
Partnerships pricing can put pressure on FBV’s margins.
prevailing market dynamics

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RISK ASSESSMENT (3/3)
The risk assessment addresses potential threats that will limit the strategic plan of the business and
provide possible mitigations measures.

Risks Identified Risk Evaluation Risk Mitigation

Failure to identify errors in the production (Sewing) process the • We will define and communicate its standard operating procedures across
all departments to ensure that employees understand what constitutes
company utilizes to manage its business could adversely impact
Loss of Brand Equity product quality and customer confidence, resulting in loss of brand
“good practices” in the business process.
• The company must ensure products go through a strict quality checks to
reputation. minimize the possibility of legal action.

Due to the nature of the mill and Trading business, unforeseen

Unforeseen Losses losses bordering from low turnover to logistics can spring up.
• The company will be fully insured to protect against losses.

Government policies cut across areas of its operations. • The company will join industry associations to advocate for
Regulatory risk Unfavourable tax and strategic policies will adversely affect
favourable policies
operations.

Supply Shortage Trade and Exchange rate factors, among other uncontrollable
• Forward integration would help to buffer pressure on the
forces may impede aggregation of raw materials for production.
weakening of the local currency against the dollar particularly.
• FBV will explore local and pan-African trades or agreements
to source for production/ raw material options.

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Appendix: Implementation Plan