Running Head: RISK MANAGEMENT PLAN: Authentic Pastry Palace
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University of Technology, Jamaica
School of Business Administration
Module Name: Corporate Risk Management
Module Code: BFS3002
RISK MANAGEMENT PLAN: AUTHENTIC PASTRY PALACE
Tutorial Time: Tuesdays 5pm-7pm
Academic Year: Semester 1 2020/2021
Date of Submission: November 27,2020
Running Head: RISK MANAGEMENT PLAN: Authentic Pastry Palace
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Table of Contents
Introduction
Overview of the Company
Literature Review
Risk Management Department’s Responsibility
Risk Management Policy Statement
Risk Management Objectives
Corporate Risk Management Strategy
Identify and Evaluate All Major Risk Exposures of Company
Identify Risk Management Techniques for the Risks Identified
Develop an Implementation and Monitoring Plan
One Major and One Minor Potential Crisis Faced by the Company and Outline a Crisis
Management Plan
Summary and Conclusions
References
Running Head: RISK MANAGEMENT PLAN: Authentic Pastry Palace
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INTRODUCTION
Authentic Pastry Palace is a Jamaican Pastry Company that has been in existence for
approximately 6 years, which came into existence on February 19, 2014. Authentic Pastry
Palace is a company that make natural pastries. The company is located at 8 Seaward Drive,
Kingston 12. We started the company as there was hardly any pastry business for persons
with medical conditions in Jamaica. With that being said, our aim was to make natural
pastries for persons with medical conditions like diabetes and Hypercholesterolemia and
other medical conditions. Therefore, we are making it easier for old/young people with
medical issues in Jamaica by making healthy cupcakes, cakes, smoothies, ice-cream.
Authentic Pastry Palace is ranked as one of the top Pastry Company in Jamaica in
terms of service, customer satisfaction, quality and taste. However, we aim to be the number
one Pastry Company in Jamaica and also on the international market as future progress. In
order for this to be possible, constant innovation and expansion of our production base will be
required. However, in doing so the company will face numerous risks which strategies need
to be put in place to overcome them.
Running Head: RISK MANAGEMENT PLAN: Authentic Pastry Palace
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OVERVIEW OF THE COMPANY
Authentic Pastry Palace was established on February 19, 2014 by five childhood
friends we all became pastry chefs; Dorrel Jackson, Bratney Williams, Toni-Ann Mottley,
Tamoya Taylor and Sashagaye Wint. We started this company solely because of the increase
in diabetes, hypercholesterolemia and other health issues. Our heart healthy pastries are safe
for everyone to eat regardless of their health issues. Our company has been growing over the
years, so far, we have three different locations in Kingston Jamaica and we plan on extending
to other parishes. The company has employed over thirty employees, which includes,
managers, supervisors, pastry chefs, delivery men, waiters and waitresses. Our entire team
has been doing a great job so far and we continue to make it a point of our duty to keep our
new and existing customers satisfied.
The support we receive on a daily basis is overwhelming. If you visit our local
supermarkets like Progressive, Hilo, Shoppers fair, Price Smart, etc. you will see most of our
products on their shelves. Additionally, with the outpouring support that we get we ensure to
give back to our communities by doing charitable events and back to school fairs.
Additionally, the unique range of pastries that we offer we have won numerous pastry
competitions.
Our success did not come overnight as we encountered difficulties in the first year of
our business. We had challenges with getting people to believe that our pastry was as good as
the ones they are used to because of our ingredients. We had to invest in advertising our
pastries on television, radio stations and in newspapers which was costly as we used our
saving as start-up capital for the business. Additionally, we had to give well known
influencers our products for free to try and give away pastries for fee just to get our
customers to believe us. This happened just because of how different our products were.
Running Head: RISK MANAGEMENT PLAN: Authentic Pastry Palace
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Going in our second year of business that is when our revenue started growing
expeditiously. And it was that same very year we opened our second branch in Kingston. We
could not have done it without our well-trained staffs. Our highly trained customer service
representatives deliver world-class services which has helped to keep our new and existing
customers coming back.
Our goal at Authentic Pastry Palace is to make it the number one bakery in Jamaica.
We are expected to launch our newest pastry called “peppermint matcha macaroon” this
Christmas season. And like the others we expect it to do great. At Authentic Pastry Palace we
believe in providing heart healthy pastries to our customers which we have been doing over
the years and will continue to do.
Running Head: RISK MANAGEMENT PLAN: Authentic Pastry Palace
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LITERATURE REVIEW
Corporate risk management is defined as a set of financial or operational activities that
maximize the value of a company or a portfolio by reducing the costs associated with cash
flow volatility (Dionne, 2013). Risks are present in nearly all of firms’ financial and
economic activities. The risk identification, assessment, and management process are part of
companies’ strategic development; it must be designed and planned at the highest level,
namely, the board of directors (Dionne, 2013). Therefore, organizations employ the use of
risk management to plan against any possible risks. This is done by understanding and
observing the operations of the business and identifying any possible risks that can possible
increase uncertainty or losses, also by applying any risk control strategies that can be used to
reduce any uncertainty and to minimize the outcomes of any possible risks.
As a Pastry Shop, Authentic Pastry Palace tries to put implications in place such as risk
management strategies which will help to reduce and/or prevent loss from occurring. Some
risks that Authentic Pastry Palace faces are Price Fluctuations, Limited Growth and Health
and safety standards (LaMarco,2019).
Price Fluctuation is the upward and downward swings in prices of products in an
economy. In the Bakery business, Price fluctuations exist for any goods that are seasonal.
Because seasonal materials are used to make a broad array of baked goods, bakery
businesses are impacted by periodic price fluctuations (bayadmin,2019). Price fluctuations
can have serious consequences for the bottom line of a bakery business, as profit margins
become slim, and sometimes the bakeries are forced to pass some of those costs on to the
consumer, to avoid going out of business ( LaMarco,2019).
With there being a lot of bakeries in Jamaica, leading to a market saturated with bakeries
of all sizes and specialization which makes competition in the bakery business high
Running Head: RISK MANAGEMENT PLAN: Authentic Pastry Palace
(LaMarco,2019). A special characteristic of the industry is that a lot of bakeries in Jamaica
specialize in Cakes, but it is all about the technique and how they are designed based on the
request of the customer. The willingness of the public to pay a higher price for specialty
baked products or pastries are largely dependent on how the overall economy is doing. Most
of those who are engaged in the bakery business grow by purchasing their competitors or
controlling a major portion of the competitor’s business venture (Authur,2015). The bakery
industry also happens to be limited by population growth. With a growth in population there
will naturally be more people to buy baked goods. However, it is a slow process, and the
bakery industry is still growing by single percentage points annually (LaMarco,2019).
Health and safety are another concern for bakery businesses since maintaining a safe
environment for both customers and employees is of great importance. Since different
bakeries use specific types of equipment, it is vital to fully educate workers on the various
