PART 1:
To assess candidates' ability to create contingency plans and to analyse contingency plans to ensure that they meet organisational requirements and mitigate risks to the business.
ASSESSMENT DESCRIPTION
Identify risks associated to the business and develop a contingency plan that provides appropriate strategies to deal with the risks.
PROCEDURE
1. Identify potential risks to the business.
2. Develop strategies to minimise those risks.
3. Identify who might need to be consulted as part of the plan.
4. Identify a dollar value for an activity that might incur a cost.
5. Use the template provided.
Create contingency plans for the following scenarios:
• One of your highly qualified consultants has given three months notice and is planning to move to a competitor after this time.
• There has been a 34% increase in production; however a decrease of 22% in sales has been recorded.
• The rental for the offices your company currently occupies is being increased by $1750 per month. There is no available space for additional employees.
PART 2: PLAN ANALYSIS
Read the following Contingency plan developed by Eden Black for Proactive Management Consultants Pty Ltd. Your task is to analyse the strategies that have been developed to mitigate the risk and answer the questions below.
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Contingency plan
Company name: Proactive Management Consultants Pty Ltd.
Name of person developing the plan: Eden Black
Who was consulted as part of this plan?
Name Position
David Grey Financial controller
Brianna White Operations manager
Angie Brown Senior accountant
Shankar Singh Marketing manager
Jordyn Gee Sales manager
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Risk identified: Strong possibility of a new competitor moving within close proximity to our company within six months. The current date is the 1st of July 20____.
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Strategies/activities to minimise the risk
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By when
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By whom
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Work out a possible lower fee schedule to entice new customers and remain competitive.
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1/08/201X
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AB/DG
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Increase the advertising budget and work on a new marketing strategy.
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15/08/201X
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SS/DG
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Work with sales to extend current contract periods and offer discounts as incentives for customers.
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1/09/201X
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JG/AB
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Enter into an agreement with existing firms for referral to each other complimenting for services.
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15/09/201X
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DG
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Looks at ways of outsourcing to extend client base.
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25/09/201X
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BW
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Make six people redundant to compensate for future losses.
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20/10/201X
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BW/JG
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1. Has Eden identified all strategies to mitigate the identified risk? Justify your response.
2. Has Eden correctly identified the correct people to consult in the development of the strategies? Justify your response.
3. If you believe Eden has not identified all the strategies or people to be consulted, what would your recommendations be?
4. Are the timelines that Eden has created achievable? Justify your response.