Assignment 1: Case Study

Name: Chuah Yee Lyn Matrix Number: 51528

 Political Risk
Our company may face political risk as the presence of socio-economic pressures in
society, due to unequal income distribution between social classes, that lead to limited
purchasing power in India. People from lower income family will think that the price of a junk
food is too expensive and unaffordable for them. On the other hand, high income citizens’
concern had greatly increased with health fears which will likely opt for healthier options.
Moreover, the are some group of people would like to promote health and environment care
with the idea that opposed significantly to the entry of fast food industry that limit our exposure
to potential customers. The level of education also defined as one of the source of political risk
because half of the population in India is considered as illiterate. Therefore, the idea of our
products only can reach them through visual channel, such as billboards and audiovisual.

The risk associated with investment climate like discrimination and control over foreign
business activity is also one of the possible undesirable outcome of this project. The India
government has a strict control of the entry and exit of multinational corporations (MNCs) due
to the existence of anti-Western fractions.

 Project Risk
India is more adapt to meatless culture as there are 40% of the market is estimated to
be vegetarian. It is a project risk for our company to target vegetarian on creating the products
that adapt to their culture. Moreover, 80% of the population does not take beef because of the
religion belief. It is a challenge for building the target customers’ confidence on our products
which guarantee on non-serving beef and clear segregation for preparing vegetarian foods.

 Financial Risk
In the financial risk, the prices of real estates in India is high thus lead to the issue of
unavailability of brick and mortar. There are cost that cannot be avoided as our corporation
provide financing assistance and training for new franchise owners to manage cash flow and
keep business profitable. Our corporation will face financial risk when the net international
liquidity of India is low.

 Inherent Risk
Furthermore, our company need to keep the price low for targeting customers. There
are few rivals in India like KFC and Pizza Hut because inherent risk is cannot be avoided due
to the nature of business. The sales may be affected if our competitors have launch a better
promotion or attractive new menu to the market. It is an issue if our business could not create
and retain the loyalty customers.

 Supply Chain Risk

Besides, it is our obligation follow the health and safety guidelines in the legal system
of business to avoid any crisis like food poisoning. Therefore, there is supply chain risk is one
of the risk that should be prioritize because without all the raw materials, our business cannot
be conducted. Expertise on food safety also need to send to India for conducting food safety
management system that our corporation emphasize such as Good Manufacturing Practices
(GMP), a verified Hazard Analysis Critical Control Point (HACCP) plan and more applicable
programs. It is a challenge to develop local suppliers that could produce and deliver quality
raw materials on time due to geographic factor. Service orientation among employees should
take note by logistic management which is responsible for the temperature-controlled
movement of all products. The freshness of food will alter if the instructions are not given
clearly to the employees especially truck operators. Due to the poor infrastructure, our
restaurants in India may face the risk of frequent power outages due to inadequate power supply.
The operation of each outlets will be affected as well as the storage of raw materials.

 Interpretation Risk
Business communication stand an essential part of daily operation to transmit the
message. The social diversity of India culture with more than 20 major spoken languages and
over 200 dialects may create interpretation risk within the organization. Employees may face
communication problem with each other, and also when serving the customers. Top
management has to ensure that their intended message can be understood clearly and avoid the
taboo topics.