In the case study presented below, identify four risks faced by Innov$8$ and describe each in no more than two lines per risk.

Case Study: Innov$8$

Innov$8$ is a public company listed on the JSE and as such their focus is on delivering long$-$term value to their shareholders. They design, manufacture and assemble computer chips that automate many of the functions for the luxury car market, particularly the ABS braking and fuel injection systems. Large volumes of parts for use in the manufacture of these systems are imported from Japan. The manufacture and assembly is done in South Africa using local labour and then the final product is supplied to automotive production plants, both locally and internationally. The trend in vehicle manufacturing is to use alternative energy and this is increasingly becoming a reality, which could possibly render the current fuel injection systems developed by Innov$8$ obsolete in the not too distant future.

The current economic climate is not favourable, not globally and even less so in South Africa.$$ There is a possibility that the prevalence of strikes and protest action across many industries within the country could drive it into recession; thus, adversely affecting levels of per capita disposable income. The instability of the labour force is also creating a negative foreign investment sentiment$,$ which means that foreign investors are reluctant to invest in South African businesses or their products. This has implications on the exchange rate. Labour regulations are currently under review and a proposal is being put forward that the concept of a minimum wage should be applied across various definitions of labour, as opposed to being applied solely at the lowest levels of the labour market.

Innov$8$ has been operating for many years and as their focus has been on growing the business, most of the financial resources have been utilised for expanding international sales markets through numerous distribution channel acquisitions. This has resulted in an underinvestment in manufacturing plants and necessary equipment. As a result, production time and the quality of the product have started to deteriorate, but the General Manager of Production has been promised new machinery for a number of years. Currently, customers are still accepting of the delayed deliveries, as the Innov$8$ design team, particularly the Head of Product Design, is exceptional at developing products that are far more advanced than that of their competitors. This is the case even though their competitors are continuously improving their own product offering.