Shanghai-Tokyo International Ferry Company
Introduction
Shanghai-Tokyo International Ferry Co. Ltd was established in 1985 with a joint venture of Shanghai Ocean Shipping Co. and a Japanese private resident. Shanghai Ocean Shipping Co. is one of the foremost worldwide companies, which is currently operating in internationally by delivering and transporting goods as well as providing engineering services to various customers. The Japanese citizen is one of richest person in the world and he is currently involved in different sectors of business and industries. He desires that his identity should not to be disclosed among the public. The Japanese co-proprietor is not fascinating to invest further capital in the industry and he believes in investment diversification theory. Shanghai-Tokyo International Ferry Co. Ltd is currently performing in Shanghai, China.
Risk Management
Business Goal
To run Shanghai-Tokyo International Ferry Co. Ltd smoothly and achieve all its business goals in term of;
- Service- Goals that relate to provide improved passenger services and customer retention.
- Profit- Goals that increase the profitability of Shang TIF Co.
- Growth- Goals that expand the Shang TIF Co.’s current operation.
Key Resources
Key resources of Shang TIF Co are listed below;
- Physical assets- including ferry boat, navigation system and operating space.
- Human resources- key employees of company and crew staff.
- Financial- adequate amount of fund to run Shanghai-Tokyo International Ferry Co. Ltd.
Core Values
Shanghai-Tokyo International Ferry Co. Ltd needs to follow the core value in order to achieve its target as mentioned below;
- Quality- Shang TIF Co. must provide and maintain quality service to their passengers.
- Integrity- always honest with customers and perform business fairly.
- Understanding- pay full attention to customer requirement.
- Timely- place timely delivery to cargo shipment.
Risk Assessment
Integrity risks and their causes regarding the risk criteria of Shanghai-Tokyo International Ferry Co. Ltd should be clear in order to achieve the objective of the company. These include:
- Human health and safety precautions
Shang TIF Co. must comply as per regulations of International maritime safety.
Control activity: Inspection should take place on timely basis by company’s inspectors.
- Legal and regulatory compliance
Shanghai-Tokyo International Ferry Co. Ltd must fulfill all compliance, which are required to operate the shipping business of countries in China as well as Japan.
- Market risk
A number of ferries boat company have entered into the industry.
Control activity: Company must maintain quality and excellent customer service including well-timed delivery.
- Cost
The increasing prices of fuel is also having an impact on the Shang TIF Co.’s business.
Control activity: Shanghai-Tokyo International Ferry Co. Ltd can go for future contract to stable the costs of fuel during a specific period of time.
- Seasonal sales
Seasonal sales are one of the major key risk area for the company. Historical data suggests that the company has the lowest volume levels in the period of May-June.
Control activity: Shanghai-Tokyo International Ferry Co. Ltd needs to launch new attractive schemes in order to attract passengers during the period of May-June so that the company maintains its current profitability.
- Natural disasters
Natural disaster can also impact on the company’s business and disturb its current operation. Historical facts and figures show that company sales declined by 1 million.
Control activity: This risk is not eliminated completely but it can be done by Shanghai-Tokyo International Ferry Co. Ltd to take precautionary measures.
- Occupancy rate
Japan to China route has a lower occupancy rate for cargo than the return trip. This unevenness in cargo space does impact the company’s profitability and its fixed cost.
Control activity: As mentioned in the case, the company provided discount to Chinese Exporters Company if they will assure returning of cargo from Japan.
- Cost structure
The cost structure of Shanghai-Tokyo International Ferry Co. Ltd is very higher than its competitor and they charge premium rate to their customers.
Control activity: Shanghai-Tokyo International Ferry Co. Ltd needs to revise its current cost structure in order to compete with new upcoming ...................................
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