Various risks that Rite Aid faces Free Essay Samples & Outline
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Essay on Various risks that Rite Aid faces
Project risk management is the art and science of identifying, analyzing, and responding to risk in the process of operating any business, and to ensure the objectives are met. A risk is a possibility of loss or injury that can occur in any particular project. Risks can be negative or positive. At some point, risks can be positive. They are risks that result in good things happening; sometimes called opportunities. When different payoffs are satisfied, risk-utility is realized. The major categories of risks include market risk, financial risk, technology risk, people risk and process risk. Rite Aid usually faces risks that fall under technological risks. Several factors contributed to the failure of the company including the relevancy of their accounting practices and were audited by the relevant firms.
IT risks, such as computer failure made the situation worse. Among the significant risks, it is still one of the biggest pharmacy chains. The IT risk had been prudently analyzed at the moment with an attempt to ensure the realization of set goal and scope for the project. People’s risks also emerge as a potential risk. It can be evidenced when the shareholders of equity interests undergo a restriction and being forced to sell them under certain circumstances including the security acts (Reeve, Warren & Duchac, 2012). Due to that, the sale of the substantial number of the particular stocks by the stakeholders over a short period causes the prices to decrease. It becomes very difficult for the company to raise more funds through future offerings of Rite Aid common stock.
The market risk also has a significant effect on the survival of the company. When the announcement and pendency of the acquisition occurs, it causes disruption in the business of the company. It can always be realized when the current and prospective customers experience uncertainty about the ability of the company to meet their needs due to poor quality contributed by the market factors. The management team also may experience uncertainty about their future roles with Rite Ride, which might affect the personnel. Process risk also affects the operation of the company. Government agencies create legal processes that affect the overall performance of the company in the long run. The company fails to complete the acquisition of relevant documentation unless they receive various consents, approvals and clearance from various authorities in the United States. The challenge is a lack of assurance from the agencies.
Under process risk, product contamination can also occur in the process of manufacturing and even mislabeling. The provision of other services such as counseling can also result in the emergence of some risks from the company. Activities such as counseling are encouraged for free on issues such as dosage. Such practices are being offered by the government leading to the creation of unexpected financial losses. Under the process risk, government regulations including procedures and processes make the other part of the risk factor. A significant change adversely affects the business, the result of their operation, or the financial conditions. To be precise, the market risks adversely affect the company, hence influencing their performance. The market also contributes to competition that affects the financial obligations of the business making them prone to so many risks.
In summary, Rite Aid Company majorly faces the Market risks that tend to affect their financial position in the entire business. The other risks related to the company include Market, financial, process, and people’s risks that tend to hinder their performance in meeting their scope, time and cost constraints.
Reeve, J. M., Warren, C. S., & Duchac, J. E. (2012). Accounting: Using Excel for success. Mason, OH: South-Western Cengage Learning.