This blog is for the students of Fundamentals of Business
Tuesday 7 October 2014
Blog 17 – The risk
Describe the genesis of risk (the market requires different product or inability of the factors of production) for the following businesses:
1) “How is made chocolate”
2) “How is made honey”
3) “How is made Pringles”
The business producing chocolate is focused on producing one single product (high quality chocolate) for the specific need of the best chefs, confectionaries and chocolates in the world. The whole structure and machinery is there in order to satisfy this specific goal. If the environment and its needs change, it will be quite tough for the firm to follow this change. Moreover, the machinery is specific for this one product and change or replace them would be expensive. In the honey firm, we see that it has different productive processes. Even here the environment can change and with it also its needs. The firm is still rigid and resistant, but, as it produces different goods for different needs, the risk should be lower. I don’t think that all these needs would change all at once. In the third case we have a similar situation of the chocolate video. The firm structure is rigid and focused on one single product to satisfy one specific need. If the environment changes the firm is put on a high risk. In all three cases we can also have a risk related to the fact that some factors of production (machinery consume, low labour productivity is low, etc.) is not efficient.
I do agree to what Fabio said as the first firm we took in consideration is extremely focused on just one type of production for 'selected' customers, consequently it has just one specific aim. Indeed, if another firm will be able to satisfy the first firm's customers' needs then it should be difficult to compete because you don't have many options. For the honey firm, it shouldn't have too many risks in case of competition. Exactly as Fabio said, the third firm we are analizing is focused on just one specific product as well as the first one. There are other firms that produce the same product that this firm does and they offer many other tastes.
1) Chocolate marketing is not simple and has many risks. Even if the possibility of having many tastes could seem good, the most important part is the quality and a chocolate with a not good quality is a risk. 2) Honey should be ecounraged with different uses, a normal use is a risk for the market. 3) Pringles is different from other elements. It's not matter of quality, is just a question of pure business and how it could be used. Satisfing one need is a thing not so useful.
The genesis of the risk for Chocolates ElRey starts when money is invested in labour, facilities, cocoa fields, etc. (specific factors of production). The trasformation process to pruduct chocolate is always the same as the product (rigid nature of the firm), while the taste of people changes fastly. Chocolate brands could sell its high-quality product at a lower price, thanks to technologically advanced machineries. (Inability of the factors of production). The genesis of the risk for the honey firm could be represented by the fact that more and more people in the world are switching to the synthetic honey, that's made by sugar and chimical preservatives. The taste of the chemical one is really similar to the natural one, but, for sure, their nutritional values are completely different. The cost of the natural one is so much higher that, for example, in the USA it's hard to find natural honey (No market need). The honey firm could also adopt not advanced machineries, wasting time, honey and money. Pringles, as all the junk food around the world, has some troubles with movements in favour of health, so the risk could be that slowly there will be no more demand of Pringles and the market could be obliged to liquidate (No market need).
1) I think that chocolate business is one of the most profitable. Everyone loves chocolate! But the strengths of this business should consist of new tasteful products as the demand from customers is changing. But the production of different product could bring the firm also to the ineffectiveness. So the risk starts when the owner invests money in something never tested. 2) The production of the honey should concern nations that can afford this product. As in the video, honey needs to be treated with specific machinery and equipment, so its revenues have to be greater than the costs in order to remunerate them. On the contrary, if we are dealing with the inability of factors of production, the product isn’t sold at all and the firm collapses. 3) Pringles is already taking part of the junk food business. The presence of natural ingredients in it guarantees customer satisfaction for now, but in so doing it could bring the firm to the rigidity and resistance to change and as a consequence effectiveness would miss at all. If the company is able to produce tasty products that meet again customer’s need, according to health and sustainable regulations, surely the firm records much more revenues and ineffectiveness spins off.
1 &3) Producing chocolate is in the whole world a profitable business. The Demand is although different for every kind of chocolate if you want to fulfill the need off chocolate for children you most times have more sweater chocolates ,but if you are a business man and want to give your college chocolate you buy him high quality chocolate. If there would be a change in the need of chocolate because the environment is changing or people start to prefer more chips the firm will have a lot of problems since the machinery is specified on their chocolate and changing the machinery and the skills of the workers would be to expensive. The same goes for case 3 the firm is focused on one specific need and if there would be a change in the environment/demand they would have a high risk of going bankrupt.
1) I think that the chocolate business can be considered like honey business. it is a business with low cost for research and development so it is not a variable business. Conversely it is a strong competitive market and the raw material is important but is very important to meet the needs of people in order to reach the taste of them. Probably our firm aims to produce a great chocolate quality for a niche market and it should be easier hold your position once you met it. But however it have some risk, like deterioration of raw material (not keeping the same standards) and change of some production phase.
2) I think that the honey business is the less risky between the three. Keeping in mind what the are the business risks (the market requires different products or the inability of the factor of production), probably the honey business is the less risky because industrial honey processes are almost the same since 1800 so it is not variable but we can see a tendency to not change. It means that it is a product that don't require of research and development because technics old more than 200 years satisfied the customer needs yet. Moreover the products with honey are few and always the same. Then the only risks that this industry can have is if the flower of honey dislike the customers in some point into the future, maybe because something is changed into the industrial process.
3) Pringles business is the riskier between the three because it runs in a relative younger business. This Business tend to evolve, more quickly than honey and chocolate, with different products to meet the always different needs of the people. Also if it is a strong market, because it is difficult to see a world without chips, it is also a very competitive market and risks can are: shrinkage of chips demand, fall of products' quality and changes into industrial process that hurt the business
The risks for these three companies can be different. The chocolate factory produces various products marked on the use of chocolate and of high quality. In the case of the video we can observe the production of a series of high-quality products which have a cost higher than the average. The risk that may be incurred such company is a change of the needs and wants of consumers and therefore the demand for a product that meets other requirements. Another risk is represented by a possible economic crisis: the company would be forced to lower their prices, however, arguing, in part, the same higher costs of production. The efficiency and effectiveness would be affected negatively. To overcome these problems could expand the choice of products and manufacturing a series of products tha customers less rich can buy. Another important thing is to be ready to avoid any shortage of cocoa beans and raw materials. The factory of honey can also incur risk in which the demand for different products, but also in the risk of resource depletion (e.g a disease among the population of bees). So it is very important to expand the production and safeguard the health of the bees. The factory of chips risks a drop in demand for the product as it is strongly linked to the production of a specific type of chips and a specific type of packaging ( e.i potato chips and with concave shape and cylindrical jar). So it is important to widen the choice and type of products, offering different tastes and a new product design. The company must also be able to monitor the quality of advertising, in fact, if ther isn't a good publicity, the product could lead to an inevitable decline in sales. This can provoke a situation of net-loss. Unlike the other two products, honey and chocolate, which have, in my opinion, less need for advertising, factory Pringles should not absolutely lower the number of advertising, as it is a product that is too specific and particular.
I totally agree on the fact that the honey insustry shouldn't present many risks,even tough there are always risks in business,honey hasn't made pretty much any change since its first production,therefore it is in my opinion difficult to identify one.However there may be many more risks concerninc the chips and chocolate,for example it would be interesting to consider the quality,quantity and type of products that can derive from the production.For the chocolate production it is vital that the quality of the product is as high as possible,same with the chips,also these products can be mixed up with diffeent flavours and also can be presented in different modalities to improve the overall quality of the good and recuce risks
1)producing chocolate is not simple but it is a profitable too.Although it has many risks.everyone loves chocolate. The strength of this business should consist of New tasteful products.Nowadays the demand of customers is changing.but production of different products is very risky because who knows the new products can able to satisfy customers. 2)the genesis of the risk for the honey firm can be represented by the fact that now customers want to get high quality food at a lowest price.so they are switching to the synthetic honey. 3)Pringles is already taking part of junk food business.if the company is not able to provide natural , healthy products, risk will be grow.
It is a challenge to keep up with the market requires , it is increasing , changing and evolving . The greatest risk of productions above mentioned , is not cope customers demand , by focusing on good production of the main product , without diversify its production .
In my opinion, chocolate business is relatively safe one, since it is eaten almost all over the world and very few people don’t like it. Likewise, the same I can say for chips, particularly for Pringles, because they are different from the others since they are not sold in bags but in tubes. The situation is different for what concerns honey: not everyone use it and in the last few years many new sweeteners have been developed and spread that are more suitable, especially for people who follow a particular diet.
Federica, I do agree with you concerning Pringles and I could probably agree even with the fact that honey is not so widespread (globally, I mean) but I must say something in favour of chocolate: indeed, the factory we saw in the video clip sells almost all its products to high chefs and cuisines, as Fabio Bellasina reminded us in a comment above. So I think (but it is only an opinion) that even in this case the situation is a bit complicated since there is a large competition of highly qualified companies.
Chocolate itself is highly demanded product as well as Pringles and companies producing them definitely are satisfying their costumers however, in my opinion the making products automatically has its risks. If the business will need to adapt to new needs and wants of costumes it will be more difficult and expensive than when producing for example honey.
In the first case, chocolate represents one single need that with the time will never disappear: chocolate is became a necessary need such as milk for example...the demand will always be high. By the way, environment could change and new machinery in order to deal with changes could be so expensive. In the second case and in the third one, we observe instead that the firm satisfy a need that we couldn't define necessary: the environment and demand's change represent a risk for the firms.
1) In the chocolate factory case the firm is producing a high quality chocolate meeting the needs of people requesting for one of the best product available in the market. A general risk in which the company could incurring is given by the continuous environment and market change, in fact if another company starts to produce high quality chocolate the first company could not be able to adapt all his very expensive machinery in the building. To prevent such a risk the firm should invest in research on the market's demands in order to be ready for eventual change in terms of products delivered or in factor of production used.
2) In the honey factory the production is affected from several factors. Obviously in this case one of the most clear risk in which the company could incurring is strictly related to the taste of the honey. As everybody knows the production of honey and so the taste and the quality are connected with the nectar that the bees have taken from the flowers, in fact could be from different floral sources that are influencing the final product in term of taste and quality. The genesis of the risk in the honey case is could be represented by an eventual request from the market of a specific honey flavor, derived from a particular flower, that unfortunately bees can not find in the geographic area where they live and reproduce themselves.
3) In the Pringles case we could say that there are many risks in which the company could incurring. First of all Pringles are not the most healthy chips to eat and it is possible define them like a chemical product, because you effectively are eating not a thin slice of potato, but something made in laboratory. Some movements that involve sustainable food already exist and if they will grew and will start to let people understand what should be eaten company like Pringles would not be able to adapt themselves to the market demands, and therefore going straight to the liquidation.
In my opinion, a major factor in the genesis of the risk of production is the failure of formulation and production technology. If a company (whether honey, chocolate or chips) in compliance with all standards of quality, there will be always the demand for these products.
I think that for the three businesses the main risk is linked to the fact that other firms could better satisfy the needs that they try to satisfy. In fact they already have many competitors and potential entrants. For what concern the Chocolates ElRey its major risk is to have a competitor whose chocolate has an high quality and a lower price. About the honey business it’s important to remind, as someone has already done, that synthetic honey is prevailing in some countries markets because of its lower price, even though its ingredients are not natural or healthy. Pringles are junk food and everyone can see, as we did on youtube, that they are not made of healthy ingredients. So its risk could be that the market will ask for different and healthy products in the feature (No Market need). But honestly I don’t think this will happen soon as junk food is always eaten all around the world.
1) The chocolate factory meets the needs of a small group of customers, so the biggest risk it runs is that they change their demand, even if the demand for high quality products is usually more constant than the one of the middle class. Another risk it runs is related to its reputation, it could fail any minimum scandal. 2) The honey market is quite limited and constant, the greater risk that the honey factory runs is to be outclassed by the competitors. But the production of honey requires a fairly long process and a specialized human capital, so the labour could cost more than it produces . 3) Profits of Pringles company are mainly related to the reputation of the brand, then the main risk it runs is to lose its popularity.
In the cases of the business which produces chocolate, specialized in the production of high quality chocolate for a certain group of buyers, chefs, confectionaries and chocolatiers all over the world and the business producing pringles, specialised only in the production of that product, we see that the producing process is really mechanized and specialized, so if the market changes it will be hard for the businesses to satisfy the needs asked and therefore change all the machines used. While with the business which produces honey we see that the production involves different tipes of products, from the simple honey, to lipsticks and other things, so if the market changes they can possibly survive, since it is improbable that all the different markets they work in change at once.
people's interesting play a important role in sales links.but this determined the business producing.maybe some people like honey but you produce chocolate.as result you will make the product overstocking,it's very dangerous.from the other hand,the production is a very major.because if you just produce the chocolate.at once your producing machine was broken,you must go fishing,but if you have varies of producing,you can connect the others link and get the profit.for instance,you have a company that it only produce chocolate.one day,your machine can't make chocolate.you will lost the money.now we assume you have two companies,one is making the honey and another producing chocolate.you will get the profit if the top things happened.
thw choccolate business are the best one in that make profit. because the choccolate its not just a wants of people its also a needs of people .i thing can also to be better for example change the taste canghe the level productions change marketing. And for another two cases have more risks .
I think that the best business between the three probably is the Honey one because it needs a particular skill in bee breeding and other knowledges in taking wax. So it is difficult to recruit the skilled workers but once you have started the business, you take care of it using the best machinery in the market and you create the right strategy to sell the output if your is a high quality product you shouldn't have so many problems in surviving.
The most difficult business to run is the chocolate one because there are big firms (and so brand) that controls the market, for example Novi, Kinder, Lindor, Perugina, Nestlè. This brand are very difficult to overcome.
The Pringles business is one of the difficult ones because if you don't want to eat in a healthy way you can choose very different brands and so different kind of food (as sandwich, hamburgers, fries chips, pretzels and so on) so you haven't a particular product but only one in the infinities of the market.
The market needs are very important for any company, because if they are not considered the comapny can fail. In the case of honey it is important to have a natural one without adding other ingrediends like sugar, and with a good marketing you can sell it and be successfull. In the case of chocolate and pringles the company should consider different tastes, like dark or milk chocolate, with nutts or without, with caramel, fruits, (in chocolate case) or with different tasets like onion, origano, etc (in the case of chips). All of them have risks mostly related with natural disasters, or weather. In the case of honey, if the weather is not good, the bees produce only few honey which is useful only for their survival, and the bee-keper will not have enough production, and since the bees are collected in specific periods it might be that the company will not have enough sales to have a profit. It is the same thing with the raw materials of the other two companies if the weather conditions are not good (to dry etc) then it will be difficult to produce high quantities in order to satisfy the demand.
Above the other risks said above, one of the most important one for me is producing and not selling within a reasonable time, so the company increases the stock, their costs but they do not have incomes from sales. The reasons could be, because they are not efficient and effective from the process of taking the order to delivering one. Or mabe their products would have been substituted by other products, or the customer chose another product from competitors because their price is competitive and the quality the same or higher than theirs. So, the risk can come from outside, but it can also be insider as might be the case of technology which might not be updated. In the case of Honey, the employees were using an old technology,and some part of operations were manual. MAybe a new competitor might think for a new ttechnology that collects faster the honey from the frame, and this can create an advantage.
1. The chocolate firm is focused on producing only one product. Therefore, if market or needs of customers changes, the company will face a lot of risk. Moreover, machinery manufacturing systems are too expensive, so improving its is not easy. They can not also rise the prices because there are many competitors in market.
2. The main materials of the honey firm is honey from bees. Therefore, if disease or something like that occur to bees, the company will be heavy losses. This is the risk because of depending on natural materials. In addition, that workers are regularly exposed to bees may be injured by bee sting. This influenced to productivity of employees.
3. Related to Pringles firm, they also focused on producing only one product. Of needs of customers changes, the company will fall in a high risk.
In production of chocolate:Focused high quality chocolate. If need would be change then business would get trouble because they can't change the whole structure of the business. In Honey: there is low risk because it has different process of productivity. They can manage with the need of customers. In Pringles. The firm has high level of risk as like chocolate due to sigular productivity.
The business producing chocolate is focused on producing one single product (high quality chocolate) for the specific need of the best chefs, confectionaries and chocolates in the world. The whole structure and machinery is there in order to satisfy this specific goal. If the environment and its needs change, it will be quite tough for the firm to follow this change. Moreover, the machinery is specific for this one product and change or replace them would be expensive.
ReplyDeleteIn the honey firm, we see that it has different productive processes. Even here the environment can change and with it also its needs. The firm is still rigid and resistant, but, as it produces different goods for different needs, the risk should be lower. I don’t think that all these needs would change all at once.
In the third case we have a similar situation of the chocolate video. The firm structure is rigid and focused on one single product to satisfy one specific need. If the environment changes the firm is put on a high risk.
In all three cases we can also have a risk related to the fact that some factors of production (machinery consume, low labour productivity is low, etc.) is not efficient.
I do agree to what Fabio said as the first firm we took in consideration is extremely focused on just one type of production for 'selected' customers, consequently it has just one specific aim. Indeed, if another firm will be able to satisfy the first firm's customers' needs then it should be difficult to compete because you don't have many options.
DeleteFor the honey firm, it shouldn't have too many risks in case of competition.
Exactly as Fabio said, the third firm we are analizing is focused on just one specific product as well as the first one. There are other firms that produce the same product that this firm does and they offer many other tastes.
1) Chocolate marketing is not simple and has many risks. Even if the possibility of having many tastes could seem good, the most important part is the quality and a chocolate with a not good quality is a risk.
ReplyDelete2) Honey should be ecounraged with different uses, a normal use is a risk for the market.
3) Pringles is different from other elements. It's not matter of quality, is just a question of pure business and how it could be used. Satisfing one need is a thing not so useful.
The genesis of the risk for Chocolates ElRey starts when money is invested in labour, facilities, cocoa fields, etc. (specific factors of production). The trasformation process to pruduct chocolate is always the same as the product (rigid nature of the firm), while the taste of people changes fastly. Chocolate brands could sell its high-quality product at a lower price, thanks to technologically advanced machineries. (Inability of the factors of production).
ReplyDeleteThe genesis of the risk for the honey firm could be represented by the fact that more and more people in the world are switching to the synthetic honey, that's made by sugar and chimical preservatives. The taste of the chemical one is really similar to the natural one, but, for sure, their nutritional values are completely different. The cost of the natural one is so much higher that, for example, in the USA it's hard to find natural honey (No market need).
The honey firm could also adopt not advanced machineries, wasting time, honey and money.
Pringles, as all the junk food around the world, has some troubles with movements in favour of health, so the risk could be that slowly there will be no more demand of Pringles and the market could be obliged to liquidate (No market need).
1) I think that chocolate business is one of the most profitable. Everyone loves chocolate! But the strengths of this business should consist of new tasteful products as the demand from customers is changing. But the production of different product could bring the firm also to the ineffectiveness. So the risk starts when the owner invests money in something never tested.
ReplyDelete2) The production of the honey should concern nations that can afford this product. As in the video, honey needs to be treated with specific machinery and equipment, so its revenues have to be greater than the costs in order to remunerate them. On the contrary, if we are dealing with the inability of factors of production, the product isn’t sold at all and the firm collapses.
3) Pringles is already taking part of the junk food business. The presence of natural ingredients in it guarantees customer satisfaction for now, but in so doing it could bring the firm to the rigidity and resistance to change and as a consequence effectiveness would miss at all. If the company is able to produce tasty products that meet again customer’s need, according to health and sustainable regulations, surely the firm records much more revenues and ineffectiveness spins off.
1 &3) Producing chocolate is in the whole world a profitable business. The Demand is although different for every kind of chocolate if you want to fulfill the need off chocolate for children you most times have more sweater chocolates ,but if you are a business man and want to give your college chocolate you buy him high quality chocolate. If there would be a change in the need of chocolate because the environment is changing or people start to prefer more chips the firm will have a lot of problems since the machinery is specified on their chocolate and changing the machinery and the skills of the workers would be to expensive. The same goes for case 3 the firm is focused on one specific need and if there would be a change in the environment/demand they would have a high risk of going bankrupt.
ReplyDelete1) I think that the chocolate business can be considered like honey business. it is a business with low cost for research and development so it is not a variable business. Conversely it is a strong competitive market and the raw material is important but is very important to meet the needs of people in order to reach the taste of them. Probably our firm aims to produce a great chocolate quality for a niche market and it should be easier hold your position once you met it. But however it have some risk, like deterioration of raw material (not keeping the same standards) and change of some production phase.
ReplyDelete2) I think that the honey business is the less risky between the three. Keeping in mind what the are the business risks (the market requires different products or the inability of the factor of production), probably the honey business is the less risky because industrial honey processes are almost the same since 1800 so it is not variable but we can see a tendency to not change. It means that it is a product that don't require of research and development because technics old more than 200 years satisfied the customer needs yet. Moreover the products with honey are few and always the same. Then the only risks that this industry can have is if the flower of honey dislike the customers in some point into the future, maybe because something is changed into the industrial process.
3) Pringles business is the riskier between the three because it runs in a relative younger business. This Business tend to evolve, more quickly than honey and chocolate, with different products to meet the always different needs of the people. Also if it is a strong market, because it is difficult to see a world without chips, it is also a very competitive market and risks can are: shrinkage of chips demand, fall of products' quality and changes into industrial process that hurt the business
The risks for these three companies can be different. The chocolate factory produces various products marked on the use of chocolate and of high quality. In the case of the video we can observe the production of a series of high-quality products which have a cost higher than the average. The risk that may be incurred such company is a change of the needs and wants of consumers and therefore the demand for a product that meets other requirements. Another risk is represented by a possible economic crisis: the company would be forced to lower their prices, however, arguing, in part, the same higher costs of production. The efficiency and effectiveness would be affected negatively. To overcome these problems could expand the choice of products and manufacturing a series of products tha customers less rich can buy. Another important thing is to be ready to avoid any shortage of cocoa beans and raw materials.
ReplyDeleteThe factory of honey can also incur risk in which the demand for different products, but also in the risk of resource depletion (e.g a disease among the population of bees). So it is very important to expand the production and safeguard the health of the bees.
The factory of chips risks a drop in demand for the product as it is strongly linked to the production of a specific type of chips and a specific type of packaging ( e.i potato chips and with concave shape and cylindrical jar). So it is important to widen the choice and type of products, offering different tastes and a new product design. The company must also be able to monitor the quality of advertising, in fact, if ther isn't a good publicity, the product could lead to an inevitable decline in sales. This can provoke a situation of net-loss. Unlike the other two products, honey and chocolate, which have, in my opinion, less need for advertising, factory Pringles should not absolutely lower the number of advertising, as it is a product that is too specific and particular.
I totally agree on the fact that the honey insustry shouldn't present many risks,even tough there are always risks in business,honey hasn't made pretty much any change since its first production,therefore it is in my opinion difficult to identify one.However there may be many more risks concerninc the chips and chocolate,for example it would be interesting to consider the quality,quantity and type of products that can derive from the production.For the chocolate production it is vital that the quality of the product is as high as possible,same with the chips,also these products can be mixed up with diffeent flavours and also can be presented in different modalities to improve the overall quality of the good and recuce risks
ReplyDelete1)producing chocolate is not simple but it is a profitable too.Although it has many risks.everyone loves chocolate. The strength of this business should consist of New tasteful products.Nowadays the demand of customers is changing.but production of different products is very risky because who knows the new products can able to satisfy customers.
ReplyDelete2)the genesis of the risk for the honey firm can be represented by the fact that now customers want to get high quality food at a lowest price.so they are switching to the synthetic honey.
3)Pringles is already taking part of junk food business.if the company is not able to provide natural , healthy products, risk will be grow.
It is a challenge to keep up with the market requires , it is increasing , changing and evolving . The greatest risk of productions above mentioned , is not cope customers demand , by focusing on good production of the main product , without diversify its production .
ReplyDeleteIn my opinion, chocolate business is relatively safe one, since it is eaten almost all over the world and very few people don’t like it. Likewise, the same I can say for chips, particularly for Pringles, because they are different from the others since they are not sold in bags but in tubes.
ReplyDeleteThe situation is different for what concerns honey: not everyone use it and in the last few years many new sweeteners have been developed and spread that are more suitable, especially for people who follow a particular diet.
Federica, I do agree with you concerning Pringles and I could probably agree even with the fact that honey is not so widespread (globally, I mean) but I must say something in favour of chocolate: indeed, the factory we saw in the video clip sells almost all its products to high chefs and cuisines, as Fabio Bellasina reminded us in a comment above. So I think (but it is only an opinion) that even in this case the situation is a bit complicated since there is a large competition of highly qualified companies.
DeleteChocolate itself is highly demanded product as well as Pringles and companies producing them definitely are satisfying their costumers however, in my opinion the making products automatically has its risks. If the business will need to adapt to new needs and wants of costumes it will be more difficult and expensive than when producing for example honey.
ReplyDeleteIn the first case, chocolate represents one single need that with the time will never disappear: chocolate is became a necessary need such as milk for example...the demand will always be high. By the way, environment could change and new machinery in order to deal with changes could be so expensive.
ReplyDeleteIn the second case and in the third one, we observe instead that the firm satisfy a need that we couldn't define necessary: the environment and demand's change represent a risk for the firms.
1) In the chocolate factory case the firm is producing a high quality chocolate meeting the needs of people requesting for one of the best product available in the market. A general risk in which the company could incurring is given by the continuous environment and market change, in fact if another company starts to produce high quality chocolate the first company could not be able to adapt all his very expensive machinery in the building. To prevent such a risk the firm should invest in research on the market's demands in order to be ready for eventual change in terms of products delivered or in factor of production used.
ReplyDelete2) In the honey factory the production is affected from several factors. Obviously in this case one of the most clear risk in which the company could incurring is strictly related to the taste of the honey. As everybody knows the production of honey and so the taste and the quality are connected with the nectar that the bees have taken from the flowers, in fact could be from different floral sources that are influencing the final product in term of taste and quality.
The genesis of the risk in the honey case is could be represented by an eventual request from the market of a specific honey flavor, derived from a particular flower, that unfortunately bees can not find in the geographic area where they live and reproduce themselves.
3) In the Pringles case we could say that there are many risks in which the company could incurring. First of all Pringles are not the most healthy chips to eat and it is possible define them like a chemical product, because you effectively are eating not a thin slice of potato, but something made in laboratory. Some movements that involve sustainable food already exist and if they will grew and will start to let people understand what should be eaten company like Pringles would not be able to adapt themselves to the market demands, and therefore going straight to the liquidation.
In my opinion, a major factor in the genesis of the risk of production is the failure of formulation and production technology. If a company (whether honey, chocolate or chips) in compliance with all standards of quality, there will be always the demand for these products.
ReplyDeleteI think that for the three businesses the main risk is linked to the fact that other firms could better satisfy the needs that they try to satisfy.
ReplyDeleteIn fact they already have many competitors and potential entrants.
For what concern the Chocolates ElRey its major risk is to have a competitor whose chocolate has an high quality and a lower price.
About the honey business it’s important to remind, as someone has already done, that synthetic honey is prevailing in some countries markets because of its lower price, even though its ingredients are not natural or healthy.
Pringles are junk food and everyone can see, as we did on youtube, that they are not made of healthy ingredients. So its risk could be that the market will ask for different and healthy products in the feature (No Market need). But honestly I don’t think this will happen soon as junk food is always eaten all around the world.
1) The chocolate factory meets the needs of a small group of customers, so the biggest risk it runs is that they change their demand, even if the demand for high quality products is usually more constant than the one of the middle class. Another risk it runs is related to its reputation, it could fail any minimum scandal.
ReplyDelete2) The honey market is quite limited and constant, the greater risk that the honey factory runs is to be outclassed by the competitors. But the production of honey requires a fairly long process and a specialized human capital, so the labour could cost more than it produces .
3) Profits of Pringles company are mainly related to the reputation of the brand, then the main risk it runs is to lose its popularity.
In the cases of the business which produces chocolate, specialized in the production of high quality chocolate for a certain group of buyers, chefs, confectionaries and chocolatiers all over the world and the business producing pringles, specialised only in the production of that product, we see that the producing process is really mechanized and specialized, so if the market changes it will be hard for the businesses to satisfy the needs asked and therefore change all the machines used. While with the business which produces honey we see that the production involves different tipes of products, from the simple honey, to lipsticks and other things, so if the market changes they can possibly survive, since it is improbable that all the different markets they work in change at once.
ReplyDeletepeople's interesting play a important role in sales links.but this determined the business producing.maybe some people like honey but you produce chocolate.as result you will make the product overstocking,it's very dangerous.from the other hand,the production is a very major.because if you just produce the chocolate.at once your producing machine was broken,you must go fishing,but if you have varies of producing,you can connect the others link and get the profit.for instance,you have a company that it only produce chocolate.one day,your machine can't make chocolate.you will lost the money.now we assume you have two companies,one is making the honey and another producing chocolate.you will get the profit if the top things happened.
ReplyDeletethw choccolate business are the best one in that make profit. because the choccolate its not just a wants of people its also a needs of people .i thing can also to be better for example change the taste canghe the level productions change marketing. And for another two cases have more risks .
ReplyDeleteI think that the best business between the three probably is the Honey one because it needs a particular skill in bee breeding and other knowledges in taking wax. So it is difficult to recruit the skilled workers but once you have started the business, you take care of it using the best machinery in the market and you create the right strategy to sell the output if your is a high quality product you shouldn't have so many problems in surviving.
ReplyDeleteThe most difficult business to run is the chocolate one because there are big firms (and so brand) that controls the market, for example Novi, Kinder, Lindor, Perugina, Nestlè. This brand are very difficult to overcome.
The Pringles business is one of the difficult ones because if you don't want to eat in a healthy way you can choose very different brands and so different kind of food (as sandwich, hamburgers, fries chips, pretzels and so on) so you haven't a particular product but only one in the infinities of the market.
The market needs are very important for any company, because if they are not considered the comapny can fail. In the case of honey it is important to have a natural one without adding other ingrediends like sugar, and with a good marketing you can sell it and be successfull. In the case of chocolate and pringles the company should consider different tastes, like dark or milk chocolate, with nutts or without, with caramel, fruits, (in chocolate case) or with different tasets like onion, origano, etc (in the case of chips). All of them have risks mostly related with natural disasters, or weather. In the case of honey, if the weather is not good, the bees produce only few honey which is useful only for their survival, and the bee-keper will not have enough production, and since the bees are collected in specific periods it might be that the company will not have enough sales to have a profit. It is the same thing with the raw materials of the other two companies if the weather conditions are not good (to dry etc) then it will be difficult to produce high quantities in order to satisfy the demand.
ReplyDeleteAbove the other risks said above, one of the most important one for me is producing and not selling within a reasonable time, so the company increases the stock, their costs but they do not have incomes from sales. The reasons could be, because they are not efficient and effective from the process of taking the order to delivering one. Or mabe their products would have been substituted by other products, or the customer chose another product from competitors because their price is competitive and the quality the same or higher than theirs. So, the risk can come from outside, but it can also be insider as might be the case of technology which might not be updated. In the case of Honey, the employees were using an old technology,and some part of operations were manual. MAybe a new competitor might think for a new ttechnology that collects faster the honey from the frame, and this can create an advantage.
ReplyDelete1. The chocolate firm is focused on producing only one product. Therefore, if market or needs of customers changes, the company will face a lot of risk. Moreover, machinery manufacturing systems are too expensive, so improving its is not easy. They can not also rise the prices because there are many competitors in market.
ReplyDelete2. The main materials of the honey firm is honey from bees. Therefore, if disease or something like that occur to bees, the company will be heavy losses. This is the risk because of depending on natural materials. In addition, that workers are regularly exposed to bees may be injured by bee sting. This influenced to productivity of employees.
3. Related to Pringles firm, they also focused on producing only one product. Of needs of customers changes, the company will fall in a high risk.
In production of chocolate:Focused high quality chocolate. If need would be change then business would get trouble because they can't change the whole structure of the business.
ReplyDeleteIn Honey: there is low risk because it has different process of productivity. They can manage with the need of customers.
In Pringles.
The firm has high level of risk as like chocolate due to sigular productivity.