Risk Management at Hitachi Construction Machinery Pty Ltd - Essay Example

Risk management Over the past business period, Hitachi Construction Machinery (Australia) pty ltd as a subsidiarybusiness unit has encountered and tackled various challenges posing risks to its operations. As a company targeting the Australian market, it is clear that the various parties dealt with are those that mainly affect the company directly. Hitachi Construction Machinery Company is the mother company of the above stated subsidiary mainly stationed in Japan. To acquire a favorable market share, it engages in the sales of the heavy machineries, for example John Deere, Bell and Hitachi competent brands in the ranges of new and used. Scope To be efficient and effective the unit provides the range of machinery best known to miners of Australia as the best. Mining takes turns from extracting underground resources to the point of processing. The unit provides and caters for lumbering trucks, excavators, bulldozers, and drilling in the manual and electric version. The company also ensures that all spare parts are availed at the stores, a factor that ensures that the customers business does not alt because of mechanical breakdowns (Thakur et al, 1997). With the technological revolution in the mining sector taking tremendous advances, the unit provides upto date equipment and customer support on the use of such. Pricing and negotiation deals within the unit stimulate the competitiveness in the market. Hitachi ensures communication in the various channels, which entirely stimulates performance on output, realization of change in the dynamic environment and customer satisfaction via direct responses. Risks are borne by assumptions that the prevailing factors are not crucial. The company understands clearly that different people have different perceptions. Demographically, age separates tastes and thus the approach in construction to cater for their needs takes a deeper dimension. Hitachi meets competition from Denver, Caterpillar, Center Rock, Komatsu, P&H Mining, and Joy Mining machineries among others. However, these companies may pose threats; Hitachi strategically frames a proper layout and execution exercise that secures its bid in reaching the market. (Thakur, (2007:04). The plan of availing the equipment on time drives other competitors away bearing that the selective channel of distribution and scrutiny enables the company to determine the performing and non-performing ones. Tailored communication among all the subsidiary outlets enables it to note changes and advances in industry before matters get out of hand. Holistic approach In the present marketing environment, competition takes charge on every market and failure to retaliate often steers loss of the market share, lesser profits, and exit from the market. Hitachi Company limited ensures fast adaptation to changes in the industry. In the event of competition from other key players in the market, for example, Caterpillar, Denver, Robinson Thwaites, and Bucyrus international, Hitachi resolves to higher advances that include technological advances, customer satisfaction through efficiency and closer supervision. Since Hitachi Construction Company is mainly concerned with improving and delivering services in the mining industry, it builds the best and conducive machinery for both customers the entire ecology. The company’s advancements in the provision of electric trains and steam drilling equipment among others steers economic growth to all users. The production and delivery unit ensures that all output suits the needs of the various markets and that environmental destruction is least expected. Each market segment adopt distinctive cultures, beliefs and norms which affect the business widely, thus the company should poses an outlook on factors of the kind as ignorance may pave way for competitors.(Desheng, (2010:03). As a strong strategy, holistic approach, and entirely a definite tool to production, the company appreciates all of the key players in its market, understanding fully that they are equally important. For instance, its subsequent affiliate companies enable the company to deliver the machines that lack in her production channel, if relations are injured, the companies’ move may cause impact to the general welfare. The company further offers enticing and affordable prices to the outlets, which eventually reflect to the final customer. The company also leads the market for simply strategizing and determining the best plan for success. As the market revolves, seasonal changes and predations from competitors are felt with Caterpillar taking the lead at times. Risk management of the organization The mining and construction industry is not an environment free of risks (Smith et al, 2006:32). The environment comprises of both internal and external characters whose responses to the Company’s practices affect the company. Hitachi therefore studies any form of competition, defines their various strengths and weaknesses, and establishes the best method to counteract and survive. The rival companies are Caterpillar, Komatsu, and Denver among others. The company analyses the capacity of the competitors financially, the type of customers targeted, mode of delivery and the eventual satisfaction felt on the point of delivery. What to do Distributers become an issue in the business since their delivery process machines and payment plan is crucial. For instance, some distributers may apply malpractices in the event of delivery such that machines fail to reach customers on time, if such behavior is condoned, the company understands that the customer relations the materials will result to poor output hence injure customer relations. Similarly, a slight increment on prices of delivered machinery from the affiliated companies at the long run will reflect on the price, a factor if not well monitored slowly leads uncertainty and failure. The necessity to create awareness in case of an increment in price is encouraged to contemplate on how to relay the information to the customer. Hitachi Company maintains accounting records and procedures that are up to date. This effects credibility for the company must at times financial support. Aided by clean documents, the company seeks financial creditors who will effect and not injure the business. Creditors issue specific terms and conditions upon which Hitachi chooses the favorite. Ideally, the financial partner must be in a position to render the needed support whenever need arises. Best creditors are a major consideration since from production to the point of, much invested and returns anticipated flow in at a slow pace. Thus, the best creditor to Hitachi is one who stipulates relevant payback terms and renders the required amount. How would you go about it? Planning to expand to wider markets an objective in all businesses, consequently, the company seeks to expand at a stipulated period. Broader markets offer more profits and Hitachi stands on the high to enjoy the economies of scale. Intense and comprehensive research conducted reveals the possible opportunities and threats (Matthew, 2003). Market research as a tool in forecast has enabled Hitachi to realize the presence of Caterpillar Inc., Center Rock, and Joy Mining Machinery who are key market competitors. Hitachi learns much inclusive of the possible opportunities and threats. Due to various government practices and set chain of command from different nations, an understanding protocol is set for harmonious relations to prevail. Hitachi ensures that ethics, rules, and regulations set are adhered to resulting to the desired environment. Risks pressurize companies and eventually create an atmosphere of confusion. Hitachi Company faces risks like other businesses. At times, competition threatens Hitachi thus drawing the urge to come up with procedures to identify and stand better grounds that ensure survival. At times, the company has opted to engage on tremendous projects able to bring up better constructions machinery, for example, electricity driven trains, steam turbines, and turbine maintenance services. Further, some of Hitachi’s productions are undertaken by companies that do not do the same business at the long run (Yoffie, 1993:12). Recommendations Having sensed pressure in the business due from various factors set to drawback the operations, Hitachi set a technological data relay program unit that enables all concerned parties to get updates timely. A team ensures all operations achieve the desired standards set. The mode of online communication has enabled the subsidiary company to merge comfortably with the entire market players. Customers feel more attended to as they learn of what to obtain, at what price, time and place. This act action realizes problems in their early stages before turning vulnerable (Jardine, 2007:10). Risks of poor output, financial incompetence force the company to make changes to employees and retrench them respectively. Thereafter the company plans on the second plan as the latter may have ignited the problem. Hitachi Company takes measures, adapt to changes rather than sit back and result to the boiling frog situation. Conclusions Through various stages, Hitachi Company succeeds due to early taming of the risks. The construction company set a favorable that makes an avenue to drive out major threats. In the current marketing world, change is inevitable a factor witnessed through dynamic environment of technology. In such a time, businesses can play dupe to change but eventually lose for trying the trickster in pace. Hitachi seizes those opportunities perceived as threats by competitors and tames them to succeed.(Hitachi, (2010:04). Bibliography Desheng, D.W., 2010. Modeling Risk Management in Sustainable Construction. London: Springer. Gabel, M, 2010. Project Risk Management. Washington State Department of transport. Available from: http://www.wsdot.wa.gov/publications/fulltext/cevp/ProjectRiskManagement.pdf [Accessed October 4, 2012]. Hitachi Construction Company. Available from: http://www.hitachi-c-m.com/au/ [Accessed October 4, 2012]. Jardine, S., 2007. 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Available from: http://marketingpwt.dyson.cornell.edu/SmartMarketing/pdfs/uva4-04.pdf [Accessed October 4, 2012]. Yoffie, D. B. (1993). Beyond free trade: firms, governments, and global competition. Boston, Mass, Harvard Business School Press. Read More