unanticipated for Walmart which is a multinational retail corporation as the

Unanticipated for walmart which is a multinational

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unanticipated for Walmart which is a multinational retail corporation as the firm have to analysis and anticipate macro-economic factors not only domestically but also internationally such as higher interest rate and fluctuation of currency exchanges rates. The second factor called operational risk which is influenced by natural disaster, geo- political events and information security as well. For instance, the earthquake may damage firm inventory and destroy the warehouse. Also, the information security and performance of technology-based systems must consider as they must meet the customers’ expectation and preference. For Walmart, the main financial risk is the volatility of foreign exchange rates as well as the fluctuation of market price sine Walmart operate in the various country, and those factors may affect the firm financial performance. The final risk elements were classified as Other risks that including legal, compliance and others. 10
BFF 5902 Introduction to risk principles 4.2 Risk identification of Target As the size of Target is much smaller than Walmart, the taxonomy of risks by Target is more specific in the annual report (2017). According to the annual report in 2017, the corporation mainly exposed to six kinds of risks. The First one is competitive and reputation risks which were the risk Target considering as the one should be paid more attention because the reputation of the company was the reason customers choose this company service and their employee choose to work for. The second risks were investments and infrastructure risks which means some project investment does not fully cover from return, which affected the corporation performance. Data security and privacy risks may course of the government enforcement actions and damage the company reputation. Also, Risks come from supper should be considered. The risk from regulation may induce the rise of the cost for company. Finally, Target exposure to financial risks as well. 4.3 Risks comparing between two companies After comparing Walmart and Target risk taxonomy, it could be said that some type of risks they faced is roughly the same such as reputation risk and the risk of date safety. Failure to predict customers taste and poor services experience could hurt firm reputation and then decrease the company revenue. Both of two companies should pay attention to Cybersecurity attacks as well. However, the financial risk they face is slightly different. For Walmart, they place particular emphasis on the adverse effect of foreign exchange rate which may increase the cost of good sell and decrease its gross profit. The higher shares price of Walmart means the higher expectation from investors, the delay in meeting their expectation may induce the decline in stock price.

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