Case Study

A medium$-$sized manufacturing business is facing a significant challenge. The business has been operating for several years, and while it has experienced growth in the past, it is currently facing a decline in sales and profits. The CEO has identified several issues that are contributing to this problem.

The business has been facing increased competition from lower$-$cost manufacturers, both domestically and internationally. This has resulted in the business losing customers, as they are no longer able to compete on price.

The business has also been experiencing production delays and quality control issues, resulting in increased costs and delivery times. This has led to customer dissatisfaction and a decline in repeat business.

The business has been relying on outdated technology, which has led to inefficiencies in the production process. This has resulted in increased costs and decreased productivity.

While these risks will require significant investments to establish measurements, the CEO believes they are necessary to ensure the long$-$term viability of the business. The CEO is committed to making these changes and is confident that they will lead to improved sales and profitability in the future.

Questions:

Identify and explain the types of risks evident in the above case study. Your explanation of the type of risk should also be applied to the case study. $(6$ marks$)$

Define $$enterprise risk management$.(1$ mark$)$

Apply the definition of enterprise risk management by giving risk measures that can be used to address the issues evident in the case study. $(3$ marks$)$