A) DISCUSS POSSIBLE RISK MITIGATION STRATEGIES BASED ON YOUR FINDINGS AND DISCUSSIONS IN CASE STUDY 1 & 2
B) ENSURE YOUR REFERENCES PAGE CONTAINS AT LEAST 6 SOURCES.
Running Size of your deliverable should include the 2 Pages of content for this phase, a title page, the references page, plus the 4 pages from Case Study Phase 1 &2 for a total of 8 pages (including title and references).
Risk Assessment Methodology
Jetten et al. (2014) defined risk assessment as the process through which firms identify and prioritize business risks. Risk assessment is a critical component since, without it, firms cannot design productive policies or procedures that can accord them a competitive edge. The process requires the commitment and engagement of both lower-level employees and senior management. As discussed in phase one of this assignment, Amazon faces various risks that have contributed to the downfall of other technology corporations (Raji, 2020). It means that the company must undertake a comprehensive risk assessment to avoid making similar mistakes to firms like Nokia. Risk assessment fosters business sustainability. The paper recommends a risk assessment methodology that Amazon should adopt to prevent failure.
According to Nurse, Creese & De Roure (2017), IT-based firms can use different risk assessment methodologies. These methods offer flexibility in addressing various business risks. One of the commonly used approaches is a quantitative risk assessment. Jetten et al. (2014) defined quantitative evaluation as an approach that assigns numerals
to determine the expected value loss attributable to a specific risk. In this method, the first step entails the identification of business risks. Amazon faces numerous risks, including intense competition, leadership and managerial crisis, and political and legal hazards. Research shows that environmental scanning helps ventures to identify threats and facilitate the formulation of policies to address the challenges (Leiss & Krewski, 2019). The firm’s top management, in collaboration with frontline managers, should perform environmental scanning to identify internal as well as external elements that elevate these risks.
After identifying the threats, Amazon should identify the potential impacts on business performance and all relevant stakeholders. Identifying the areas at risk begins with part- and full-time employees. It is essential to note that the challenges that Amazon faces can have a detrimental impact on the profit margin, employee turnover, and loss of customers to competitors like Google. To ensure the sustainability and competitiveness of the business model, the company should quantify in monetary terms the potential effects of these threats (Zeng & Zio, 2017). Reviewing industry trends can help Amazon in identifying more prevalent risks and its potential magnitude.
One of the critical benefits of quantitative assessment is that it allows enterprises to undertake a cost-benefit analysis. It is imperative to note that quantitative measures can only be valuable if the company has accurate data (Zeng & Zio, 2017). Cost-benefit Analysis can enable Amazon to prioritize all business risks depending on their effects on business performance. Prioritization informs the managers about the areas that deserve more attention and resources. McNeil, Frey & Embrechts (2015) contend that financial derivatives are crucial in making inferences. A decline in revenues would imply that Amazon is losing to its rivalries, thereby calling for immediate intervention. Finally, the company must design measures to eliminate or control the risk. For instance, Amazon should address the leadership challenges that can easily lead to its collapse. Besides, the firm must enact policies that foster innovation and employee engagement to ensure competitiveness.
In conclusion, risk assessment is an integral component in building a sustainable business model. Amazon should review industry trends to quantify and prioritize business threats, after which it should enact strategies to address the risks. In the contemporary business environment, firms should be aggressive to maintain a competitive edge. Environmental scanning is an integral component of mitigating business risks.
References
Jetten, V. G., Alkema, D., van Westen, C. J., & Brussel, M. J. G. (2014, November). Development of the Caribbean handbook on disaster risk information management. In Analysis and management of changing risks for natural hazards: International conference.
Leiss, W., & Krewski, D. (2019). Environmental scan and issue awareness: risk management challenges for CCS. International Journal of Risk Assessment and Management, 22(3-4), 234-253.
McNeil, A. J., Frey, R., & Embrechts, P. (2015). Quantitative risk management: concepts, techniques, and tools-revised edition. Princeton university press.
Nurse, J. R., Creese, S., & De Roure, D. (2017). Security risk assessment in the Internet of Things systems. IT professional, 19(5), 20-26.
Raji, I. (2020). Risk and risk management. Case Study.
Zeng, Z., & Zio, E. (2017). An integrated modeling framework for quantitative business continuity assessment. Process Safety and Environmental Protection, 106, 76-88.