Risk Analysis(Costa Rica) - international management - Essay Example

chicken, meat, fish, poultry products, and vegetables more than its demand could result to a higher possibility that the supply on-hand will rotten and depreciate its value over time. Unless XYZ would enter into a consignment contract with its suppliers, it is more likely that XYZ would experience a significantly financial loss. The same is true with other food items like canned goods. Over purchasing of slow-moving canned goods increases the supply chain risk associated with its expiration schedule.

In some cases, the lack of sufficient supply for a particular consumer goods item could increase the business opportunity loss on the part of XYZ. As part of globalization, XYZ may decide to outsource some of its consumer goods item from other countries. In line with outsourcing, there is an increase supply chain risk associated with the increase of shipping cost due to the sudden increase in the world market prices of oil. As a result of inflation or a sudden weakening of the Costa Rican colon (colones) – the monetary currency in Costa Rica (BBC News; Costa Rica Guide), there is a higher possibility for XYZ to experience a decrease in its annual sales due to the higher market prices of grocery items and the fact that Costa Ricans could purchase less with their money.

Having a population size of 4.5 million (BBC News) with 2.3% population growth rate (CostaRica.net) significantly contributes to potential market size for XYZ grocery store. However, there are also a lot of social or cultural risks associated with the types of food items and other non-food products solve at the grocery store. Given the fact that the population of Costa Rica is composed of different races including Ticos and minority groups like Indians, Chinese, Jews, and Black (CostaRica.net), XYZ should be able to accurately identify and consider the cultural aspects of each group in order to satisfy their individual needs and preferences when it comes to food and non-food items.

For instance, a