Introduction
The management of Leap will face critical risks when establishing its operations in South Korea. Risks are unforeseen challenges that affect the smooth functioning of an organization’s activities. We categorize business risks into market, management, operating, marketing, financial, and environmental risks. Some risks are external and can be solved by the company’s management, while others are external and considered beyond management’s control. The management of Leap will identify the various risks and develop strategies to mitigate risks.
Market Risks
The business will face market risks to the demand for Leap because the product is a health supplement. Health supplements are sensitive products influencing customer caution before consumption because they alter the body’s function. The business will face the risk of inadequate demand for Leap because of high competition from already established protein supplement manufacturers such as Geumwadam and Wawabuza. The company’s contingency plan is to use celebrity sports influencers to market the product. Influencers will assure customers of the product’s quality and satisfaction, increasing Leap’s demand.
Management Risks
Business management makes decisions and establishes policies that guide business activities. The business will face management risks in research and development. Research and development require analytical management skills to determine market outcomes. Effective management also requires collaboration among stakeholders and cooperation within the different organisational departments (San MartĂn-RodrĂguez 135). The business will face the risk of coordinating the different sectors, such as marketing, sales, and human resources, to achieve a common objective. The company will mitigate the management risks by incorporating a diverse and inclusive management strategy. The strategy will allow employees to give opinions during the decision-making process.
Operating Risks
The business will face operational risks in complying with the policies and regulations that govern food production. According to the Korean Ministry of Food and Drug Safety (1), health-functional products must be tested to ensure they are safe for consumption and employ standard labelling. The ministry prohibits food and drug producers from misleading the public through false advertisements. The organisation will mitigate the government’s operational risks by adhering to safety and health standards in the production of Leap. Increased organisational sanitation will allow the business to pass the quality and safety standards the Korean government requires. Adhering to legal business regulations influences organisational success and sustainability.
Marketing Risks
The business will face marketing risks in adhering to the marketing guidelines for food and drugs in Korea. The marketing rules and regulations also impact the marketing channel the business uses. The organisation will need help selecting the primary marketing strategy because of the various approaches in the business plan. Business organisations face challenges in determining a marketing approach because of the risks of failing to reach the target audience (Taherdoost and Aurélie 1025). The business will mitigate the risks of selecting a specific marketing strategy by combining different techniques. The marketing team will concurrently employ social media marketing, paid search engine optimization, influencer marketing, and guerilla marketing.
Financial Risks
The business will face financial risks in acquiring additional funds to support business growth. Business growth will require adequate finances to settle expenses, such as salaries, rent, and operational costs. The organisation will mitigate the financial risks by selling the company’s shares to potential stakeholders who will earn dividends from the business profits. Proper management and accountability of the company’s resources will also allow the business to mitigate the financial risks in the organisation.
Environmental Risks
The business will face environmental risks in managing copycat rival companies. The organization will secure intellectual property rights that prevent the production of protein supplements using frogs. The frog innovation will be an intellectual property owned by the business, and the company will sue any business entity that produces protein supplements using frogs. The business will improve the community’s welfare by creating employment opportunities for the local communities to prevent them from copying the company’s production.
Conclusion
In conclusion, the management of Leap will face various risks and challenges in establishing and operating the business. The business risks will include market, management, operational, marketing, financial, and environmental risks.
Works Cited
Ministry of Food and Drug Safety. Regulations. Korean. 2022. Web.
San MartĂn-RodrĂguez, Leticia, et al. “The determinants of successful collaboration: a review of theoretical and empirical studies.” Journal of Interprofessional Care 19.sup1 (2020): 132-147. Web.
Taherdoost, Hamed, and AurĂ©lie Brard. “Analysing the process of supplier selection criteria and methods.” Procedia Manufacturing 32 (2019): 1024-1034. Web.