We can work on A risk assessment for TransGlobal Airlines

Perform a risk assessment for TransGlobal Airlines and write a report describing the results.

Specifically, you must address the following rubric criteria:

Identification: Identify two risks the company is facing, including at least one high-impact risk.
Identify the balanced scorecard component each risk corresponds to.
Classify the risk based on these two types:
Operational
Strategic
Evaluation: Determine whether the probability and impact of each identified risk is low, medium, or high. Justify your evaluation of the impact and probability of each risk.
Mitigation: Recommend a possible risk-prevention or mitigation strategy for each identified risk.

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Sample Answer

 

 

 

Risk Assessment Report: TransGlobal Airlines

Introduction

This report assesses potential risks to TransGlobal Airlines, a global airliner with a significant presence in the U.S. The assessment identifies two key risks, evaluates their potential impact and probability, and recommends mitigation strategies.

Risk Identification

  1. Risk 1: Fluctuating Fuel Prices
    • Balanced Scorecard Component: Financial
    • Classification: Operational

 

Full Answer Section

 

 

 

  1. Risk 2: Increased Competition
    • Balanced Scorecard Component: Customer
    • Classification: Strategic

Risk Evaluation

  1. Risk 1: Fluctuating Fuel Prices
    • Probability: High
    • Impact: High
    • Justification:
      • Probability: Global events, economic conditions, and geopolitical instability make fuel prices highly unpredictable, leading to a high probability of fluctuations.
      • Impact: Fuel is a substantial portion of airline operating costs. Significant price increases can drastically reduce profitability, impacting the company’s financial stability.
  2. Risk 2: Increased Competition
    • Probability: Medium
    • Impact: High
    • Justification:
      • Probability: The airline industry is competitive, with both domestic and international players. Market dynamics, new entrants, and evolving customer preferences contribute to a medium probability of increased competition.
      • Impact: Increased competition can lead to price wars, reduced market share, and decreased profitability, significantly impacting TransGlobal Airlines’ long-term strategic goals and market position.

Risk Mitigation

  1. Risk 1: Fluctuating Fuel Prices
    • Mitigation Strategy: Implement a comprehensive fuel hedging strategy.
      • This involves entering into contracts to purchase fuel at a predetermined price, reducing the impact of price volatility.
      • Explore fuel-efficient aircraft and alternative fuels to lessen reliance on traditional fossil fuels.
  2. Risk 2: Increased Competition
    • Mitigation Strategy: Enhance customer loyalty and brand differentiation.
      • Invest in improving customer experience through upgraded services, personalized offerings, and loyalty programs.
      • Strengthen the airline’s brand image through effective marketing and communication, emphasizing its unique value proposition (e.g., safety, service, and stewardship).

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