Risk Management

Risk Management

Introduction

The company that have been selected for this paper is one of the biggest companies of the world, namely Apple Inc. Although the company is in great position, but because of the nature of the market in which the company operates, it has to face some of the contentious business related risks, which are very important to understand. Following are some of the risks that the company is facing and should get addressed.

Part 1

Although Apple. Inc is one of the biggest giants in the market, but the company is still facing some of the business risk which is as follows. The business is currently facing many of the risk which is discussed below.

Subheading 1

These are the risks that Apple is currently facing and are very crucial from the business point of view. Because the company is dealing with the technological sector, the major risk is from the competitors (Damodaran, 2008).

Strategic Risk

Risks that deviates an organization from successful achievement of its business objectives are regarded as strategic risks. These risks occur due to faulty decisions taken by the directors of an organization.

Competitor's Risk (global risk)

Competitor's risk is defined as an external risk that is beyond the influence of an organization. For instance, the rising competition across the globe is global risk as it cannot be controlled or influenced by an organization.

Transaction Risk

The risk associated with business transactions in foreign currencies is regarded as transaction risk. The possibility of incurring loss due to currency movement (i.e. exchange rate) is also called transaction exposure.

Communication Risk

Communication is defined as the proper exchange of information. The possibility of gap during the exchange of information among the stakeholders is referred as communication risk.

Financial Risk

The inability of a business to fail in fulfilling its obligation towards the stakeholders is regarded as financial risk.

Operational Risk

The risk that an organization faces due to human failure is regarded as operational risk. The inability of an organization to manage its procedures, policies and systems results in the rise of operational risk.

Natural Disaster Risk

Risks that are a result of unprecedented incidents (i.e. flood, hurricane and cyclone etc) are regarded as natural disaster risk.

Industry Risk (Nieuwenhuizen, 2008).

The risks that are associated with an industry in which an organization operates are regarded as industry risk.

Global Risk outside USA International Market

Apple Inc. is an unusual technological company operating in a highly competitive landscape. Despite significant growth in earlier years, Apple has continually faced several global risks operating outside the boundaries of USA. The foremost global risk that Apple faces includes political risk. The political instability of a country makes it extremely difficult for Apple to meet the demand of its customers at the right time and place. In addition, the currency fluctuations (i.e. currency movement) have imposed significant risks on Apple. On the other hand, the risk associated with suppliers in foreign country has made it extremely difficult for Apple to provide the customers with required products.

Subheading 2

The competition is one of the biggest risks in the global ...