Risk: Risk Management and Travel Agent Price Essay

Submitted By sathiyendran
Words: 2784
Pages: 12

Risk management process
The risk management process is necessary for every organisation to gain reputation and to stay in the business for a longer period.
Figure 1 Risk management activities

The process involves risk identification, then in the analysis part we describe the risk and its cause. In the evaluation process Risk matrix is used to priorities risk and then Risk register is used to rank the risk with its trigger and Consequences. There is mitigation process to monitor and business continuity plan which describes the role , responsibilities and communications.

Figure 2 Challenges to strategic risk management thinking in an organisation

Source: (Kendrick, 2004)
Risk Identification
Risk is caused both from internally driven and externally driven. According to World economic forum risk are broadly categorised into five and they are (World Economic Forum, 2012).
Figure 3 Risk Categories
Economic Risks | | Environmental Risks |
* Systematic financial failure * Extreme volatility in energy and agriculture * Competitor | | * Flood and Land Slides * Plastic waste * Earthquake * Land and water use management |
| | |
Geopolitical Risks | | Societal Risks |
* Governmentisation of Land | | * Water supply crises * Power supply crises * Fire and Safety * Reputation |
| | |
Technological Risks | | |
* Failure of IT system * Online Travel agent price comparison system * Cyber attack and Data privacy | | |
Risk description
Economic Risks

Systematic financial failure
Collapse of the entire Resort market . It’s unlikely to happen possess a sever risk. There is also a risk of financial system instability of the Resort caused from the Groups other businesses.
Extreme volatility in energy and agriculture
The energy and fuel price has been varying very often in India. The historical record shows that the energy and fuel has a upwards tread. Petrol is the one with the most affected with 75% price jump from 2009 (MyPetrolPrice, 2012).
Figure 4 Chennai petrol price

Source : (MyPetrolPrice, 2012)
The State Grid – Tamilnadu Electricity Board has increased the tariff by 37 % on April 2012 (Sivan, 2012). Due to the energy price hike the agriculture goods have been raising high.
This is an Issue now, with the steady raise in the price is a risk for the Resort has it depends on Energy and agriculture. The organisation will be in a situation to lose profit or compromising the competitive advantage by higher the price.
Competitor
Ooty in the year 2010 it had 21,58,344 tourists, rise in domestic visitors by 13.75 % and 40 % to international visitors (TOI, 2012). With the growing number of visitors the Travel and accommodation give in hopes and attracts new competitors.
Environmental Risks

Flood and Land Slides
Ooty is a hill station and one of its major worries is the land slides. Landslides is very common in the area which brings down buildings and roads.
Landslide occurring within the resort can cause causality and property damage. Causality brings in Reputation and Safety Risk. Landslide occurring outside may disturb the road connectivity, communication network and water supply.
Plastic waste
Plastic waste has been in the spot light in Ooty for more than a decade. The government and NGO’s has been trying to educate the public not to bring in plastic bags and not disposing it in a proper channel (Palaniappan & Radhakrishnan, 2011). With the floating population the council is unable to fulfil the plastic free environment.
Resort will be put into risk of losing its natural environment and cause suffering to the wildlife if the is no proper plastic waste management. Government also may bring in regulation, failing to get in line with the regulation may result in cancelation of Resort licence.
Earthquake
Even though Ooty falls in an earthquake safe zone there have been some minor quakes in the past. There is…