Identification of the risk in the GYM-Free-Samples-Myassignment

Question: Develop Risk Management Options for Gym by Considering It as a Business College is Australian College of Sports and Fitness. Answer: Identification of the risk In identifying the risk in the gym and fitness center, the first method is to identify the potential areas from where the probable risk can get originated (Pritchand PMP, 2014). Interview and SWOT analysis are being initiated in order to identify the probable risk of the Australian college of sports and fitness. SWOT analysis is being used in order to identify the potential threats and weaknesses of the organizations (Raspotnig Opadahl, 2013). Interview method is being used in order to gather the response from the users and the trainers in the fitness center regarding the potential areas of risk. Identified weaknesses Some of their gym equipments are quite older compared to the new age tools used. Thus, risk related to the injury of the users from the older equipments is more. Currently they are not having any branch apart from their main center. Thus, the market presence is less compared to their competitors. Identified threats New age gym centers are providing various added facilities along with providing better equipments. This is attracting more customers compared to Australian college of sports and fitness. Thus, probability of financial risk is more (Christoffersen, 2012). This organization is not having proper and up to date facilities and ambience for their users compared to their competitors. Thus, risk of negative word of mouth from the existing users is more along with having the risk of delay in providing proper medical care in case of any mishaps. Classifications of risks identified Operational risk: One of the key risks identified is the operational risk. This is due to the reason that, in the above analysis, it is being identified that Australian school of sports and fitness is having inferior quality equipments compared to their competitors (Lam, 2013). Thus, chance of operational risk is there due to the probability of accidents due to the equipments. Safety risk: Another identified risk is the safety risk. This is due to the reason that, fitness and gym centers are directly related to the safety of the users. There may have accidents from the gym equipments, which will prove safety risk for the users. Technical risk: Technical risk is also relevant and identified due to the reason that, machineries and tools can have technical issues at any time (McNeil, Frey Embrechts, 2015). Thus, technical risks are being associated with the fitness center. Cost risk: Cost risk is also being associated with this fitness center due to the reason that, origination of the negative word of mouth from the existing customers will have negative impact on their business potentiality (Khodakarami Abdi, 2014). Thus, they will lose new customers along with the reduction in the generation of revenue. Risk assessment Probability Impact Identified risk Minor Moderate Major Extreme Associated stakeholders Operational risk Rare Low Low Low Medium Customers and trainers. Safety risk Moderate Low Low Medium Medium Customers and trainers Technical risk Likely Low Medium Medium High Trainers and other internal stakeholders Cost risk Very likely Medium Medium Medium High Senior internal management Low Medium High Risk assessment analysis From the above assessment of the identified risks, it is being seen that in majority of the cases, both the internal and external stakeholders are being involved. Probability of operational risk is rare due to the reason that, periodic maintenance of the equipments is being carried out. However, there is a moderate chance of having extreme impact on the organization due to its more impact area (Li, 2014). Safety risks are having moderate chance of occurrence due to the reason that, safety cannot be effectively and wholly initiated. However, it is not having high impact due to the reason that, safety and health are being taken care of in this fitness center. Technical risk is having more chance of occurrence due to presence of the tools and machineries in the gym center. Moreover, it is having risk of extreme impact due to the reason that, origination of the safety issues may have huge implications on the internal stakeholders. Probability of the cost risk is also high due to the reas on that, in the current business scenario, they are having huge number of competitors and thus, reduction in revenue generation can happen anytime. Risk treatment options There are various options available for the risk treatment such as avoidance, reduction and acceptance. Avoidance refers to the process of avoiding the probable areas of origination of the risk in the organization. Australian school of sport and fitness can avoid the use of the older equipments in order to avoid the associated risks. Reduction refers to the mitigation of the originated risk. In this case, they can provide proper first aid facility in order to reduce the impact of the safety hazard. Acceptance refers to the retention of the risk that cannot be mitigated or prevented in the business (Menoni et al., 2012). Australian school of sports and fitness should accept the fact that safety risks will be there no matter how much precautions will be initiated. Evaluation and monitoring of the risk management The first step in evaluating the risk management is to identify the key issues, which will be mitigated by the implementation of the risk management. It is will help in further steps to monitor whether the issues are being mitigated or not. The next step involves comparing the outcome of the risk management with that of the expected objectives. This will help to identify the effectiveness of the risk management in the organization. The next step is to identify the external business environment. This is due to the reason that in the current business scenario, business scenario change is rapidly occurring. Thus, the change in the business scenario should be effectively identified in order to modify the policies accordingly. The next step is to modify the existing risk management plan according to the change in the current business scenario. This will help to enhance the effectiveness of the risk management along with adhering effectively to the change in the external environment. The last step is to review the modified risk management with that of the current state of affairs. This will help to identify the weaknesses and effectiveness of the raisk management. References Christoffersen, P. F. (2012).Elements of financial risk management. Academic Press. Khodakarami, V., Abdi, A. (2014). Project cost risk analysis: A Bayesian networks approach for modeling dependencies between cost items.International Journal of Project Management,32(7), 1233-1245. Lam, J. (2013). Operational Risk Management.Enterprise Risk Management: From Incentives to Controls, Second Edition, 237-270. Li, W. (2014).Risk assessment of power systems: models, methods, and applications. John Wiley Sons. McNeil, A. J., Frey, R., Embrechts, P. (2015).Quantitative risk management: Concepts, techniques and tools. Princeton university press. Menoni, S., Molinari, D., Parker, D., Ballio, F., Tapsell, S. (2012). Assessing multifaceted vulnerability and resilience in order to design risk-mitigation strategies.Natural Hazards,64(3), 2057-2082. Pritchard, C. L., PMP, P. R. 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