Question 1
Risk register is classified into eight categories. The risk register for Poweo as at 31 may 2010 is given below:
Part a
Division 1
| Division
|
Objectives
|
Risk
|
Priority*
|
Effect of risk
|
Mitigation/Strategy | Responsibility
|
Due Date |
| Upstream | Built power generated plants | Increase in capital cost.
|
Low likelihood & High impact
|
Low rate of return | to reduce the cost of equity an organization should control its debt structure | President of Poweo | 5
Aug 2010 |
| Increase in operating cost. | Low likelihood & High impact
|
Losses may be incurred | Should control its administrative expenses, marketing and selling expenses | Finance Team of the Poweo | 18 July 2010 | ||
| Upstream | Built gas processing infrastructure | Subsequent release of gas.
|
Low likelihood & High impact
|
Penalties may be suffered | By training the technical team of the company. | Risk assessment team of the Poweo | 20 July 2010 |
| Increase in the gas prices. | High likelihood & High impact
|
Low demand of the gas | Poweo can book future contract in order to avoid this increase in gas prices | Risk assessment team of the Poweo | 16 Aug 2010 | ||
| Upstream | Focus on the liberalization of the upstream segment of European market. | May not be cost effective
|
Low likelihood & High impact | Increase in the expenditure cost | Poweo should only target those customer which increase their profitability | Finance officer of the Poweo | 2 Nov
2010 |
| Adverse economic conditions |
High likelihood & High impact
|
Decrease in the demand | The company should need to makes important decision like training of the employees ,innovative marketing strategies | Chief risk officer | 8 June
2010 |
||
| Upstream | Work on new energy sources | Heavy research expenditure
|
High likelihood & High impact | Losses or may result in low profit | By adopting the latest technology in the research | Finance officer of the Poweo | 15 Dec 2010 |
| Limited options available |
Low likelihood & High impact
|
Threat of competitors | The company should hire new skilled and experienced workers on their salesforce | Strategy director of the Poweo | 15 sept 2010 |
Division 2
| Division
|
Objectives
|
Risk
|
Priority*
|
Effect of risk
|
Mitigation/Strategy | Responsibility
|
Due Date |
| sourcing | Market poweo’s electricity | Intense competition
|
High likelihood & High impact
|
Decrease in market shares | By targeting more new customers market segments. | President of Poweo | 14 June
2010 |
|
Limited capacity |
Low likelihood & High impact
|
Reduction in the customer base. | Poweo by making new investment in the capital can enhance the capacity. | President of Poweo | 29 June 2010 | ||
| sourcing | Resold any surplus in the market | Decrease in the demand
|
High likelihood & High impact
|
Decrease in the profit margin.
|
Should target new profitable markets around the world. | Chief risk officer | 7 June 2010 |
| Fluctuation in the sale prices. | High likelihood & High impact
|
May result in the increase in the inflation |
In depth analysis of the market condition in order to avoid this risk. | Strategy director of the Poweo | 15 July 2010 | ||
| sourcing | Manage the sales and marketing department | Increment in the expenditures
|
Low likelihood & Low impact
|
Decrease the net income | By increasing the sales and growing the business by making it more profitable. | Strategy director of the Poweo | 12 July 2010 |
| Misallocation of resources | Low likelihood & Low impact | Output of power generation decline | Focus on the areas of the business that are generating more productivity. | Strategy director of the Poweo | 18 Oct 2010 | ||
| sourcing | Sourcing long term contracts for electricity supply. | Increase in sourcing costs.
|
High likelihood & High impact | Decline in the electricity sales of domestic market | Poweo should focus to increase their production capacity to sever large non-residential customers | President of Poweo | 10 Aug 2010 |
| Regulated tariff | High likelihood & Low impact
|
Negatively impact the growth of the electricity market | By supplying the electricity to its customer base at price that built on regulated tariff discount. | Risk assessment team of the Poweo | 25 Sept 2010 |
Division 3
| Division
|
Objectives
|
Risk
|
Priority*
|
Effect of risk
|
Mitigation/Strategy | Responsibility
|
Due Date |
| Commercial | Offer power supply services. | Line losses when distant supply
|
Low likelihood & High impact
|
Leakage of in the structure of electricity supply | By making high level of investment in the infrastructure. | Strategy director of the Poweo | 6 Jan 2011 |
| Decrease in market shares
|
Low likelihood & High impact
|
Reduce the poweo profitability & growth | By attracting more new customers market segments internationally. | Finance officer of the Poweo | 16 Aug 2010 | ||
| Commercial | Contract with partners | Misunderstanding b/w partners | High likelihood & High impact
|
delay in the beginning of the project | Meeting on the timely basis to discuss the uncertainties that may occur. | Strategy director of the Poweo | 18 July 2010 |
| Lack of communication | Low likelihood & Low impact
|
Conflict may arise | trained professionals should contact with the dealing partners on regular internal | Strategy director of the Poweo | 25 sept 2010 | ||
| Commercial | Sales to downstream | Decrease in the revenue | Low likelihood & High impact
|
Increase in the liability | Effective marketing and selling campaign | Finance officer of the Poweo | 20 Jan 2011 |
| Oil crisis | High likelihood & High impact
|
Increase in the oil prices & storage of oil | The company should research for other energy resources | Chief risk officer | 2 Oct 2010 | ||
| Commercial
|
Determining economic feasibility | Uncertain policies of Government.
|
High likelihood & High impact
|
Unable the poweo to enter the new markets | Negotiation with government and keep in constant contact with the government officials for upcoming policies | Chief risk officer | 11 July 2010 |
.................
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