If everyday operations are carried out as planned, businesses usually make a profit or meet their overall goals. A disruption, such as a natural disaster, can occasionally occur and disturb the organization's usual operations. Some departments in the organization are more vital than others, therefore anytime there is a disruption in operations, management must move fast to correct the situation. Disruptions in operational and financial processes, for example, result in lost sales and income, delays in strategic plan implementation, higher expenses, loss of contractual bonuses, regulatory fines, and customer unhappiness. The interruption of business-critical activity does not force the company to shut down. however, the management applies business impact analysis (BIA) to examine effects of interference to establish recovery strategy (Kellard & Sliwa, 2016). Therefore, it is paramount for the management to evaluate all the potential risks which the organization may experience to enhance the formulation of most appropriate recovery mechanisms.
Business Impact Analysis Template for Dentor Investment
In the recent days, the performance of Dentor investment has significantly decreased because of the suppliers failed to deliver products. Vendors cited that the company was taking a long period to pay for the products supplied within 2 months. Notably, Dentor depends on the real-time supply of quality furniture from different suppliers within the United States. Most customers prefer purchasing furniture from Dentor due to its capability to offer quality products at an affordable price. Ultimately, Dentor investment had established a healthy relationship with customers including hotels, restaurants, schools, government offices, households, and others. Nonetheless, Dentor’s decision to invest in the new project of developing a new plant for timber processing has negatively affected its ability to pay suppliers in time. This decision has compelled vendors to create new business terms such as delivering furniture upon being paid a half of the outstanding balance and paying current orders on delivery. Consequently, the company is facing many challenges which have stemmed from the inability to get quality products from vendors.
Potential risks facing Dentor investments
Dentor is currently exposed to various perils including operational, reputational, financial, and compliance risks. First and foremost, finance is crucial as it is used for the acquisition of other factors of production as well as enabling the business to carry out day to day activities smoothly. The primary cause of the challenges apparently emanates from Dentor's inability timely pay suppliers. The chances of ending financial problems will depend on the ability to acquire quality products from suppliers which will only be achieved if the company complies with their demands. Lack of appropriate intervention measures will plunge Dentor into severe issues such as loss of customers who might switch to buying competitors products which are readily available (Kellard & Sliwa, 2016). Secondly, the inability to timely pay suppliers subjects Dentor to reputational risks. Undeniably, a healthy reputation is a major asset for that enhances the success of the business. Through good image, enterprises develop customer loyalty which promotes the repetitive purchase and overwhelming support from the society. Dentor is indeed damaging its reputation by failing to supply adequate products to customers and paying of suppliers in time. Also, Dentor is highly exposed to compliance risks since it has been unable to meet terms of the agreements signed with vendors regarding payment period. Evidently, Dentor was supposed to settle the outstanding payments within 30 days before the supply of other products. Finally, Dentor is also exposed to operational risks whereby lack of products from vendors implies that most of the daily activities will be interfered. How to overcome the risks
It is paramount for Dentor to deal with these issues to bring back the company on the right track (Chung, 2016). To start with, the business can mitigate operational risks through developing strong financial policies, automating payment processes, establishing areas of priority, risk profiling, and creating healthy financial controls. Secondly, Dentor can handle financial risks by building emergency funds, keeping skills of employees up to date, diversifying income sources, and use the saving to execute developmental projects. Moreover, Dentor will mitigate itself against reputational risks through training its employees on how to consistently provide satisfactory services to its customers, develop a healthy relationship with stakeholders, and consider suppliers and customers in decision making (Коbajiеhko, 2015). Lastly, financial risks can be handled by diversifying sources of income, prioritizing activities, and ensuring primary products are sourced from suppliers.
References
Chung, D. (2016). Risks, Challenges and Value for Money of Public-Private
Partnerships. Financial Accountability & Management, 32(4), 448-468. http://dx.doi.org/10.1111/faam.12101
Kellard, N., & Śliwa, M. (2016). Business and Management Impact Assessment in Research
Excellence Framework 2014: Analysis and Reflection. British Journal of Management, 27(4), 693-711. http://dx.doi.org/10.1111/1467-8551.12186
Коbajiеhko, O. (2015). Information asymmetries and moral hazards in financial activities:
Problems and ways of overcoming. Science rise, 3(3 (8), 20. http://dx.doi.org/10.15587/2313-8416.2015.38850
