Question 1

In a business with a portfolio consisting of four business units, each subunit must operate

separately for efficiency in mitigating the associated risks. In this case, this question discusses

how risk assessment can be conducted for each business unit from an organization consisting of

four units. The business units include; budget airlines, a chain of small dry cleaners, parcel

delivery service, and city Centre healthy clubs. The discussion will go further to cover how the

risks in each business unit can affect the portfolio's overall performance.

Budget airline

The budget airline is an SBU that operates in cheap flights than other flights. For such

flights that offer budget flights, instances of risks are usually very high that can affect the

performance of the business. The risks in the budget airline can be categorized into two

according to the cause. The first source of the risk is the ones resulting from the aviation

industry, while the second form of risk arises from the risks of operating the budget airline

business. It is important to access these risks at any time to ensure the business is stable and

competitive in the market. The risks in the operating budget of airlines can be associated with the

cost of fuel and balancing it with the flight charges. The cost of fuel can affect the prices and

pose a risk to the business organization. Therefore, the organization must analyze the price of the

fuel at any given time to ensure their charges favor the customers while at the same time

maintain profitability from their operations. The assessment of the fuel price risk can be done by

calculating the cost of the fuel, identifying the risk, studying the organizations' tolerance to the

risk, and studying the trends in the price fluctuations after coming up with the relevant results
under all the circumstances. After this, the organization can now analyze the provisions of the

different hedging strategies.

The second risk is associated with the environmental pollution resulting from the budget

airline. Therefore, the pollution risk assessment should be conducted to ensure the budget airline

does not exceed the set emission scores set by the environmental protection agencies.

The identified risks can affect the competitive advantage of the organization. Customers

will choose pocket-friendly airlines; hence the company should ensure that it balances its prices

to those of other organizations offering the same service. Additionally, most clients in the airline

industry acknowledge the importance of environmental sustainability. Having high emission

scores will therefore discourage customers from using their services.

A chain of small dry cleaners

The dry cleaners business is also a unit in this organization and is influenced by various

risks. The most risk is associated with the type of chemicals used in this industry and their

susceptibility to fire outbreaks. An assessment of the risks in this line of operations can be

conducted by evaluating whether the chemicals used are in accordance with the law guidelines

concerning the choice of the laundry chemicals. Secondly, such chemicals may offer a threat to

the employees and the clients. The organization should study the chemicals used as ingredients

to make the solvents and whether they pose a threat to human health. The organization should

ensure that the detergents have passed through quality checks. Moreover, the level of pollution

resulting from the detergents needs to be checked to ensure their waste has no adverse impacts

on soil, ground water, and the atmosphere. The employee safety should also be studied to ensure
the lifting equipment and the state of the floor is good to avoid slippery floors and drops from the

lifting machines.

Such risks can affect the marketability and the competitive advantage of the business

unit. First, employee welfare will affect the ability of the organization to access experienced

employees. Additionally, customers will prefer a dry cleaning service that meets their needs

while maintaining a low impact on the environment.

Parcel delivery service

The business organization also has a business unit specializing in parcel delivery

services. The courier services are exposed to the risks associated with the security of their parcels

and the company's reliability in relation to time. The delivery roots should be monitored to

establish any existing security threats in the area. After this need for security escort can be

established. Additionally, the quality of security checks can be examined, such as the availability

of CCTV cameras in the packing and unloading lots. Hand sorts should also accompany such to

look for the transportation of suspicious packages such as explosives and drugs.

Such risks are very vital to the organization's performance as they affect various aspects

of the operations. For instance, any losses from the organization or any connection with drugs or

weapons smuggling can greatly impact the organization's reputation. Additionally, delays in

delivery and lack of notifications in the delivery progress state can affect the client's trust,

rendering the parcel delivery services from the organizations unreliable.

City center health clubs

 Lastly, the organization specializes in running city center health clubs. These clubs are

involved in providing fitness services to the clients, and safety is crucial in such clubs. Thus, the

security of both the employees and the clients is a major source of risk. The risk assessment for a

healthy club includes the following practices

First identification of the hazards by inspecting all the workout equipment in the gym.

The usage guidebook should also be studied to ensure the equipment is used as required.

Secondly, establish the users at a higher risk of injury and provide the needed support

accessories. The people at higher risk of injuries include pregnant women, physically challenged

individuals, elderly clients, and new members of the club. The final stage should be composed of

findings analysis and devising the control measures. The control measures should start with the

highly hazardous equipment down to the less hazardous.

The identified risks in the health clubs, if not mitigated, can affect the reputation of the

business unit. This will affect the referrals of the clients and the club's ability to maintain existing

customers. Fitness clients usually need assurance for their security wellbeing, and any

compromise to the protocols can result in huge losses in the business. Any negative review from

any business unit under this organization can go a long way to affect the other business units.