GROUP 2

CASE 1: ABC COMPANY

ABC Company, a clothing store, is planning to open a new store in Pasig for year 2x20. The Company is
worried about certain risks involve in operating a new location such as possible loss due to insufficient
sales.

Since ABC Company is planning to open a new store in Pasig for the year 2x20, they shouldn’t be
worried about the possible loss. Because they must know that in starting a business it’s not about
always gaining profit, since they were just starting, and people are not that familiar with the business.
The ABC company should use the Risk Reduction Management Strategy, a common approach that
reduces the associated risk. The company should take steps to reduce the negative outcome or, if they
do, minimize their impact when it does occur. But the danger is that their control will eventually suffer
from their feared loss. They can also use the Risk Sharing Management Strategy since they’ve planned
to open a store in a new location, there are lots of competitors and there is a chance that few people
will buy their products because it is a clothing company. But if the location suits customers who love
clothes that have a unique quality, they will surely gain profit from it. Aside from that this risk is a good
option because Risk sharing involves sharing the responsibility for the risk activities with another party.

CASE 2: UNITED PARADISE

United Paradise is an outdoor amusement park that acknowledges that their business is completely
weather dependent. There is a risk of a large financial hit whenever there is a bad season for possible
damages due to natural calamities.

In this case, Risk reduction is the risk management strategy that may reduce the possible
damage that the natural calamities may cost. Risk reduction is used to inform a broad range of activities
to reduce risk. In this case, United Paradise must improve the materials they are using in the amusement
park, and they also need to design risk reduction measures. Preparedness in the potential damages,
injuries, etc. makes it possible to establish a detailed and realistic plan for a better response in the
calamities, which can help to reduce the severity of the adverse natural event. The goal of risk reduction
at an amusement park is to protect the business's assets, such as the field, building, and amenities. This
can be used as part of a management system that follows best practices. Risk reduction is classified as
engaging clients, providing knowledge and behavior support, developing a risk reduction strategy, and
referring clients to appropriate resources. In addition to following local safety regulations, the owner
and operator should create a complete safety policy to limit the risk of injuries to staff and guests, as
well as to effectively respond to injury claims.

CASE 3: JACK DAWSON

Jack Dawson, an investor, buying stocks in an exciting new company with a high valuation, is also
exposed to the risk that stock could significantly drop.

If I were Jack Dawson, I will study the pattern of rising and falling of stocks on what month or
date that the stocks are at their peak, that’s the time I will invest more, and if it is the time of where the
stocks are falling that’s the time I will spend less on the stocks. Because when you own stock, you own a
part of the company. Stocks, bonds, and mutual funds are the most common investment products. All
have higher risks and potentially higher returns than savings products. Over many decades, the
investment that has provided the highest average rate of return. But there are no guarantees of profits
when you buy stock, which makes stock one of the riskiest investments. If a company doesn't do well or
falls out of favor with investors, its stock can fall in price, and investors could lose money. Therefore, the
best strategy that suits for this case is the Risk Avoidance. So that Jack Dawson will eliminate any
exposure to risk that poses a potential loss. Since Dawson is considering buying stocks may decide to
avoid taking a stake in the company because of credit risk.

CASE 4: DAVAO PACIFIC

When Davao Pacific faces unforeseen cancellations that exceed their capacity, there is a large risk of
losing customer.
Since Davao Pacific was not forecasted it automatically meant that there was a huge number of
cancellations that exceeded their capacity. But as a company involved in the aviation industry things like
these are bound to happen. At some point, they might use the Risk Avoidance Management Strategy,
to be able to control the incoming risks that will result in a major loss of the company. This is probably
the safest option for them because this is the part, they can identify the risks beforehand as a defense
mechanism for them to protect the company’s financial situation.