Topic: trying to save a store from going out of business Identify your project a

Question

Topic: trying to save a store from going out of business

Identify your project and provide a brief scope statement.

What type of project risks did your project team face? Include at least one risk (and explanation) from each:

Financial Risk

Technical Risk

Commercial Risk

Execution Risk

Contractual or Legal Risk

What type of risk mitigation strategies did your project team use?

Was such successful?

In hindsight, would another approach have been better?

What types of costs were present in your project?

Include examples of fixed costs, variable costs, nonrecurring, and recurring costs.

Lastly, what approach was used to estimate and budget the project (Top-Down, Bottom-Up, or Activity-Based)?

Were any contingencies used? Explain.

Explanation / Answer

Identify your project and provide a brief scope statement:

My store is not making profits and the growth and revenue are showing a downward trend. I want to restructure it and bring it back to its heydays of growth and profit maximizing. Further, I want to put in a long-term strategy and continuous innovation as per changing market needs. This will have to be implemented in next 3-6 months or we need to shut down shop.

The risks with the revamping project are many and need to be systematically addressed, to discuss a few as follows:

·         Financial Risk: The risks in revamping are we will spend a huge amount of funds from borrowings and savings and may not get the desired growth and profits.

·         Technical Risk: We would have missed out on customer preferences which might have shifted to 100% online purchase and are not able to match the range and online options offered by many big brands.

·         Commercial Risk: The longevity of business is still a question as we don’t have the deep pockets to revamp and meet customer’s expectations and competitor’s offerings in terms of the marketing mix like having the right product in the right place at the right time.

·         Execution Risk: The plan has to be executed systematically and the entire team from facing sales staff to the supplier has to meet the targets to ensure deliverance and project revamping as desired.

What type of risk mitigation strategies did your project team use?

“Risk mitigation is defined as a process of developing options and actions to enhance opportunities and reduce threats to protect strategies.”

We used risk mitigations strategies as follows:

Most of our Risk mitigating efforts were successful as we had listed out most risks associated with any unexpected situation like sudden increase in costs had already been taken care by adding inflation impacts, the employee problems were handled by having a consultancy who could pitch in with part-timers to support our project, a legal consultant was used to help with the local regulations and any product liability issues.

I think our planning was quite detailed and had handled all risks adequately.

The costs associated with the projects were as follows:

We used an approach of top down to make and activity based where the top management and stakeholders made the budget around the restructuring plan and then it was broken down into small activities and downloaded to the team.

We factored in the risks for delays, increase in unexpected expenses, any unexpected eventuality like an increase in supplier or service providers costs, short-term insurance cover for inventory and capital investments. etc.

We had taken care to handle most relevant risks associated with unexpected eventualities.

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