Question
A healthcare equipment company has recently begun developing an enterprise-wide risk management system. It has administered a focused questionnaire on a sample of its top
A healthcare equipment company has recently begun developing an enterprise-wide risk management system. It has administered a focused questionnaire on a sample of its top risk owners which has produced information on identification and assessment of its risk categories shown in the table below. The information provided includes measures of probability, impact on net income, and exiting control (low, medium, and high) for each risk categories. You are hired to use a methodology to prioritize the identified risks, develop a risk map, and offer risk mitigation strategies only for the top three risks identified (i.e., not the entire list of risks).
Risk Category | Probability | Impact | Control |
Geopolitical: government stability/regulation changes | 46.25% | -46.24% | L |
Legal: product recall/lawsuits | 27.50% | -38.760% | L |
Financial: low credit ratings/profitability | 38.75% | -36.33% | L-M |
Cyber Security: data breaches/system failure | 33.13% | -64.98% | M |
Innovation: competitive mkt position/R&D | 33.13% | -48.23% | M |
Credit: customer attrition/discount strategy | 25.63% | -49.16% | L-M |
Operational: supply chain/equipment failure | 36.88% | -52.14% | M |
Market: interest and exchange rate volatility | 57.50% | -38.74% | L |
Regulatory: compliance to healthcare regulation | 39.38% | -51.44% | L |
Climate: carbon tax/consumer expectation | 41.89% | -38.58% | L |
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