Risk & Value Management: Autor Tires Ltd - Case Study Example

Risk & Value Management Name: Tutor: Subject: Date: Table of Contents Introduction 3 Disaster Recovery Plan 7 Autor Tyres Ltd Disaster Recovery Plan 8 Introduction 8 Definition of a Disaster 8 a)Environmental Hazards 8 b)Technological hazards 8 Purpose 9 Scope 9 Disaster Recovery Team and Responsibility 10 Disaster Recovery Call Tree 10 Recovery Facilities 10 Operational Consideration 10 Communicating During a Disaster 11 Dealing with a Disaster 11 Value Chain Analysis of Autor Tires Ltd 11 INTRODUCTION 11 VISION AND MISSION 11 Value Chain Analysis 12 Primary Activities 12 Operations 12 Marketing and Sales 13 Service 13 SUGGESTION AND RECOMMENDATION 14 References 15 Introduction Manufactures of tyres for cars and trucks are among the rapidly developing business in the world. There is high demand for tyres as the motor industry continues to grow at an alarming rate. In fact, this industry is one of the most growing businesses in the world, however; there are various challenges facing it. Some of the challenges facing this industry include competition, environmental laws, labor laws, pollution and many others (Alexander, 2013).  Auto Tires Ltd is one of the industries situated inside the Industrial Park of Blumac town. This company is the main manufacturer and distributor of car and truck tyres within the European Union. This is essay will assess all the risks and challenges facing the company, and the effect it has caused both the company and the communities living within the area (Grace at al, 2014). Some of these risks include: a) Political Risks - the political environment surrounding Auto Tires Ltd has affected the company both positively and negatively. However, this essay will focus on the negative effects of the political environment to the Auto Tires Ltd. it will analyze political risk facing this organization and the damage it has already caused. The key risk that is currently facing Auto Tires Ltd is the government regulations. The industry is expected to pay huge taxes. The increase in taxation has affected the profitability of the company, and this has also made it hard for the company to predict future sales. Frequent changes of taxes affect the ability of accountants and auditors to forecast the future of the company (Bolton at al, 2013). Another government regulation that has interfered with the performance of Auto Tires Ltd are the laws governing the environmental pollution within the region. Industries are taxed for pollution and in some cases, injunction court orders are sent to the company. Such issues are part of the risks that are facing the entire management of Auto Tires Ltd. finally; the political situation is sometimes unpredictable especially the campaign periods. This has been part of the challenges facing the company. b) Economic risks - Auto Tires Ltd, manufacturing company is one of the biggest companies distributing tires for cars and trucks. Sometimes, this company faces risks that are associated with the frequent changes in the economic environment. Some of these of risks that arise because economic changes include fluctuation in interest rates, exchange rates and the total bans of some certain products. Auto Tires Ltd has faced some of these issues, making the company loses its international customers. ‘ Foreign regulatory authorities also interfere with foreign investors who are willing to invest in the Auto Tires Ltd. This has been a great challenge because these foreign investor forms part of the share capital of the company. The above economic risks have affected the company performance because of the following issues. First, economic risks have made it impossible for the company’s management to make sound decisions regarding the future of the company. Furthermore, the company is finding it hard to open more branches due to uncertain political future of other countries. Expanding the capital of the company has also been so hard because foreign investors are not willing to invest due to the complex rules and regulations for their respective countries. c) Social Risks – social factors can either be positive or negative. When they affect the company negatively, we call them risk. The overview of social factors that can affect the company include the following. Cultural factors can affect the company in various ways. A culture of an employee can make him like the company he or she works. Living style and eating habits are part of the social factors that are likely to affect the performance of the company. d) Technological Risk – the most common technological risk, especially in the manufacturing industries is the power outage. Auto Tires Ltd faces this risk oftenly though the management have installed large auxiliary generators to act as a back-up system for providing electrical energy whenever it is necessary. Auto Tires Ltd’s computers and laptops are kept running by high-performance back-up batteries until the power is restored whenever there is a power shortage. Other technological risk that is commonly facing Auto Tyres Ltd is the telephone and telecommunication failures. These risks are dangerous and can affect the company’s business negatively. Managers are, therefore, advised to use their personal cell phones when the communication system for the company is down (Whitman at al, 2013) The effect of technological risks is critical because it can cause loss of data that are important to the company. It is, therefore, essential to create offline and online data back-up systems so that they can be used to retrieve critical documents when they are lost. Technological risk is dangerous in manufacturing industries and, therefore, it needs special attention. Power problems can cause huge losses to the company if not install and managed properly. e) Legal Risks - Auto Tires Ltd is no longer safe  from the threat of a lawsuit that area as a result of ever increasing legal requirements. Government is frequently changing labor laws and other legal requirements. Other legal risks that are frequently affected the Auto Tires Ltd are employment compliance, security and safety compliance and risk management. The legal authorities expect the company to address all these issues as part of the requirements for carrying out business. The company is obliged to abide with the entire requirement so that they reduce or prevent the risk that is likely to occur. Furthermore, it is expensive to be involved in a lawsuit than to prevent one. It is, therefore, essential to adopt all the requirements before commencing the business. f) Environmental Risks – some of the environmental issues affecting Auto Tires Ltd are the constant decrease of demand because there are competitors with energy-efficient products targeted Auto Tires Ltd’s customers. It is also a problem to attract new staff and retain them because the environment is highly competitive. This has affected the performance of the company for a longer time. Another environmental risk affecting this company is the global impacts. Suppliers are sometimes facing challenges in delivering materials used in the company due to frequent climate change. Some of the suppliers are facing serious challenges when delivering raw materials that are essential for the Auto Tires Ltd. Finally, the company is facing problems of stabilizing costs that are changing. Costs of energy, water and other resources are changing, and this affects the ability of the company’s management to forecast the performance of the company. g) Competitive Risks – this manufacturing industry faces competition from foreign companies whose government assist them in carrying out market research. Auto Tires Ltd faces internal and external competition forcing them to offer lower prices. Disaster Recovery Plan The Disaster Recovery Plan for the Autor Tires Ltd is shown below Autor Tyres Ltd Disaster Recovery Plan Introduction This Disaster Recovery Plan contains all the necessary steps that need to be taken in case of an emergency in the company. Some of the common hazards in the Autor Tires Ltd is the environmental and technological hazards. Definition of a Disaster The environmental and technological hazards in the Autor Tires Ltd can be caused by a man or nature and results in Autor Tires Ltd emergency department not being able to contain the danger within the company. Some of the events that are considered to be dangerous in the company are categorized into technological and environmental hazards as shown below. a) Environmental Hazards The common environmental hazards that are likely to occur in this company is the Fire and Chemical Hazards. These hazards are commonly witnessed in manufacturing industries and can loss of life (Rampini at al, 2013). b) Technological hazards This is another category of hazards that are likely to be witnessed in the Autor Tires Ltd. these include accidents, dangerous procedures and infrastructure failure. These hazards are dangerous and can cause huge losses in the company. Purpose The main purpose of this Disaster Recovery Plan is twofold: first is to highlight all the information that is relevant to Autor Tires Ltd ability to withstand the above forms of disasters, and finally to document the recommended procedures to be followed in case an accident occurs. It is essential to note the fact that in case of an accident or a disaster, Autor Tires Ltd’s first priority is to prevent loss of life. That is before any other measures is considered. Autor Tires Ltd has an obligation to ensure that all the employees and other third parties within the company are safe. The second action after saving life is to follow step documented in the Disaster Recovery Plan with a goal of bringing back organization’s groups and departments back to normal conditions. Scope The Autor Tires Ltd’s Disaster Recovery Plan focuses on the disasters that are mentioned in this document. They focus on these disasters because the required steps and the recovery process are clearly mentioned. In the case of any other disaster not mention in this document, then it is advisable to refer to the business continuity plan the Autor Tires Ltd. Disaster Recovery Team and Responsibility There are various groups that are ready to deal with the emergency cases in the company. Their main goal is to restore normal functionality to the employees in the company. The chosen and trained groups and their responsibility in the Autor Tires Ltd are as follows; operation team, communications team, disaster recovery leads and the disaster management team. Disaster Recovery Call Tree This Business Continuity Emergency has been designed so as to save time in case of an emergency. The Autor Tires Ltd will utilize this call tree to ensure that the right individuals are conducted in a timely manner Recovery Facilities Recovery facilities have been introduced to ensure that the Autor Tires Ltd is in a position to withstand a disaster in case it emerges. This section described the standby facilities and other necessary operational information. Operational Consideration Facility team is responsible for giving direction when there is an emergency. Incase employee will be required to extend or require a hotel accommodation, the same team will organize for the same. All the expenses for accommodation, food and other charges that can occur will be incurred by the Autor Tires Ltd. Communicating During a Disaster Autor Tires Ltd has established a communication unit that are responsible for passing information in the event of a disaster. They normally communicate with Various parties informing them of the situation, the effect of the business, timelines and surrounding areas. In addition, this team has an obligation of contacting the entire Autor Tires Ltd’s stakeholders. Dealing with a Disaster In the case of a disaster, in the Autor Tires Ltd, employees' safety is the first priority. Then, mitigation of further will follow and measures of reducing further impact of the disaster to the Autor Tires Ltd (Van at al, 2013). The following steps need to be followed when dealing with a disaster regardless of the category of that disaster. 1. Identify and declare the type of disaster 2. Activation of Disaster Recovery Plan 3. Communicating the disaster 4. Prevention of further damage 5. Activating facilities that are in standby mode 6. Establishing other necessary operation 7. Repair and rebuilding of primary facilities Value Chain Analysis of Autor Tires Ltd INTRODUCTION VISION AND MISSION Autor Tires Ltd’s vision is to be the most outstanding company, satisfying customers with quality products and solution in delivering tyres for cars and trucks. Mission of Autor Tires Ltd is to provide quality tyres that are long lasting. Autor Tires Ltd is developing trees for all sizes to accommodate all vehicles despite their sizes. The environment has been the top priority for the Autor Tires Ltd and working toward creating a wonderful society and clean world (Wiedemann, 2013).  Value Chain Analysis This is a systematic analysis of the company’s competitiveness in the market. The chain contains some useful series within the company that creates and build company’s value. The Chain below shows the total value of delivery made by the company. Primary Activities The materials are normally received from suppliers and are stored until they are needed for processing. Autor Tires Ltd has a constant supply of materials from the suppliers. Operations Operational area is where the tyres are manufactured and assembled so that they can be dispatched to various customers across the world. Autor Tires Ltd is well known for its reliability in delivering tyres to their customers. Marketing and Sales This is a critical part in the company because it determines the marketability of tyres delivered by the company. Marketing department focuses on the promotional mix to ensure that there is no misleading of potential customers Service Autor Tires Ltd values their customers. They offer after sale service, handles customers’ complaints in a professional manner, training and so on. Human Resource Management (HRM); Autor Tires Ltd’s success has been contributed by the committed employees. Autor Tires Ltd manager recruits and trained its employees so as to motivate them. It is profitable to have trained employees because they will be able to deliver quality services to the customers (Verhoef and Lemon, 2013). Some of the strategies used by the Autor Tires Ltd to retain employees are as follows: Maintenance Selection Compensation Recruitment Training and development SUGGESTION AND RECOMMENDATION Autor Tires Ltd should utilize Value Coalitions to ensure that all the resources are effectively utilized. References Alexander, K. (Ed.). (2013). Facilities management: theory and practice. Routledge. Bolton, P., Chen, H., & Wang, N. (2013). Market timing, investment, and risk management. Journal of Financial Economics, 109(1), 40-62. Cvetkovich, G. (2013). Social trust and the management of risk. Routledge. Grace, M. F., Leverty, J. T., Phillips, R. D., & Shimpi, P. (2014). The Value of Investing in Enterprise Risk Management. Journal of Risk and Insurance. Rampini, A. A., Sufi, A., & Viswanathan, S. (2014). Dynamic risk management.Journal of Financial Economics, 111(2), 271-296. Van Deventer, D. R., Imai, K., & Mesler, M. (2013). Advanced financial risk management: tools and techniques for integrated credit risk and interest rate risk management. John Wiley & Sons. Verhoef, P. C., & Lemon, K. N. (2013). Successful customer value management: Key lessons and emerging trends. European Management Journal, 31(1), 1-15. Whitman, M., Mattord, H., & Green, A. (2013). Principles of incident response and disaster recovery. Cengage Learning. Wiedemann, L. (2013). Business Strategies and Value Chain Management. AuthorHouse. Read More