COURSE: ENTERPRISE RISK MANAGEMENT

PROJECT: STORA ENSO

Instructions for the submission:

• Please maintain the following: Font - Times New Roman, Font Size - 12, Line
Spacing - 1.5

Question 1. Plotting of risks in the heat map (in the template excel file)

Question 2. Calculation of risk scores

 Calculation of risk score :
likelihood * impact = risk scores
Risk1 (data hacking) = 2*2 = 4
Risk 2(old technology) = 4*4 = 16
Risk 3 (declining sales) = 4*5 = 20
Risk 4(new regulation) = 4*3 = 12
Risk 5(biodegradable plastics)= 3*1 = 3

PRIORITY RISK JUSTIFICATION

LEVEL
P1 Risk 3 Highest risk score of 20 with medium
velocity. It has highest impact and exists
completely in red zone. Due to highest
impact it was prioritized among the same
likelihood components.
P2 Risk 2 Risk score is 16 which brings it just below
red zone. Although it has low velocity but
the impact score has again prioritised it
over high velocity of risk 4.
P3 Risk 4 Risk score of 12 with high velocity has put it
for third place.it is held in brown zone just
above green and has third laregest impact
score.
P4 Risk 1 Risk score of 4 has impact score and
velocity higher than risk 5.
P5 Risk 5 Lowest risk score and low velocity.

Question 3. Prioritisation of the risks and justification for the order.

Question 4. Four aggravating factors of risks for the forest produce industry creating an
impact on their revenue generation are:

• Data hacking
• Opening of illegal IP addresses.
• Malware existence within system (security breach)
• Allowing of personal gadzets to employees.
• Employees working outside the VPN.

• Use of old technology

• Lack of technology updation.
• Requirement of Big investment requirement for updation.
• Lack of skilled workers for new technology.
• lack of reliability of customers on new products.
 • Declining sales
• Digitalization due to pandemic
• Shift in customer choice
• More use of electronic gadgets.
• Market crash due to less paper demand.

• New regulations
• Shut down of two paper factories.
• Less requirements of workers now.
• No further production of paper based products.
• To compete market competitions.

• Biodegradable plastics
• Customer awareness towards nature.
• Nature friendly
• Easy decomposable
• Biodegradable.

Question 5. Four mitigation strategies to reduce the risk posed by the aggravating factors

Risks Mitigation strategies

Data hacking - avoid unknown IP addresses and fix security patches.

Use of old technology - constant technology updation & joining tech-

chapters

Declining sales - producing new carbon materials for energy storage

New regulations - sooner construction of prototyping factory

 Consumer preferring biodegradable plastic packaging - start
injecting biodegradable plastics in market from now

Question 6. Risks that should be accepted with their justification

Stora Enso’s risk tolerance for each of the risks mentioned in the table
is $3 million. As per the above given conditions, all risk whose probable
risks are below $3 million can be taken into consideration and can be
suggested to Stora Enso.
Hence, risks such as
risk 1 ( data hacking) - 1.7 -1.9 millions < 3 millions
risk 5 ( Consumer preferring biodegradable plastic packaging )
- 0.6- 0.8 millions << 3 millions
and risk 4 (new regulations) – 2.4 – 2.6 millions < 3 millions.
can be suggested to Stora Enso.

Especially risk 4 must be suggested to Stora Enso due to its high velocity
and high probable impact. If it is not taken into consideration it can
become a big hazard all of sudden.
If All THESE three risks are taken , it will be a good sign for the
company.