Risk Management

Risk Management
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Abstract
Risk aversion is an important component in conducting any activity, either in organizations or even personally. In most of the successful organisations in the world, the ability to perform risk management has been their winning strategy. They have been able to master and perfect on the skill to the fullest (Tulloch et al., 2015). Therefore, this paper tends to focus on the risk review of the purchase of a new car. It will cover the process of mitigation from identification where key players in the industry will be highlighted. Furthermore, it will proceed into the process of ranking various forms of risks and how this can be beneficial for the client. After that, it will discuss on how the proper monitoring of the risks that have been identified and then ranked can be done and how this can help in the way the final process of mitigation will occur. Finally, the paper will conclude on a recommendation of how risk aversion can be useful in the world today for both individuals and organizations.
Risks are a part of life, and they are to be considered and reviewed in almost all instances (Tulloch et al., 2015). As such, we are going to look at the risk review when purchasing a new car. In the purchase of a new car, a lot of factors are to be heavily considered. Firstly, in the proper mitigation of the risks, they need to be identified. As such, in this life-changing experience, we have various factors that can be considered; from looking at the manufacturer, the dealer, the features and many more.

On the side of the manufacturer, it is best to buy from manufacturers that have been considered globally as being trustworthy regarding the products that they produce. Buying a car from a recent or a new manufacturer is a risky option as even the spare parts for the vehicle would not be available and thereby rendering the car unusable in the event that something gets damaged. Also, a recent manufacturer in the market might not be reliable in the delivery of the car as they have not been familiar with the process of the supply chain and therefore various delays and even damages to the car can be incurred. On the other hand, we have the dealers. “These are people who are regarded as being the middlemen between the manufacturers and the customers, and therefore their integrity is highly questionable.” This is to mean that they might be selling cars that have been overused and are not in the right conditions. Also, they may have cars in the dealer shops that have stayed for too long until they are not worth the price they are being sold for.
On another aspect, there is the issue of features. This is very crucial as most dealers and brokers are known to advertise cars with features that they do not even possess. This is a way of making the sales of the cars to go up while not considering the interests of the client. Through this, the client is left with a car that does not do what he or she was told it could do, and also its retail price happens to be overestimated. Secondly, when it comes to proper mitigation of risks, they need to be ranked. Through this, the risks with a high potential of occurring will be given higher priority as compared to risks with a low probability. As such, numerous damaging calamities can be controlled and averted to a great extent. Thirdly, when risks have been ranked, they need to be monitored. The purchase of a new car is very important to almost every individual, and therefore every person wants to get the best deal and product in the market. As such, through monitoring these risks that have been identified, the client will be able to discover the best course of action to take.
In conclusion, risks in the purchase of a new car are plenty. Therefore, even though the proper procedures and protocols are followed, total risk aversion cannot be done. What is practically possible is the ability to reduce the intensity of the risk and thereby ensuring that more resources are able to be side-lined and saved in the process. Finally, conducting a risk review should be the strategy undertaken by almost every individual or organization as it has the potential of bringing more positivity than negativity and as such more profits.
ReferenceTulloch, A. I., Maloney, R. F., Joseph, L. N., Bennett, J. R., Fonzo, M. M., Probert, W. J., … & Possingham, H. P. (2015). Effect of risk aversion on prioritizing conservation projects. Conservation biology, 29(2), 513-524.