QUESTION 2 30 MARKS

YOU ARE REQUIRED TO: MARKS

Identify and explain the business risks that the Rosebank OneStop faces
as evident from the scenario above.

Also, for two marks, rank the risks in order of “Impact” with “1” being the
(a) highest impact on the business. (30)

Please structure your answer in the tabular format below:

Risk Indicator Risk Explained Ranking

TOTAL MARKS (30)

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 Risk Indicator
1 Locked/Empty petrol pumps
2 Market related petrol prices
3 Purchases petrol stock in USD
4 Unreliable transport company
5 Many competitors
6 Held at gunpoint for cash
surpluses
7 Robbery took place a few
minutes before armoured
vehicles come
8 High staff turnover
9 Violation of Labour Act
10 High debt levels
Explanation of risk Risk
Ranking
1 Risk to reputation of the petrol 1
station leading to lost customers
Risk that franchise agreement in 1
breach due to damage to brand
1 Risk of increasing commodity 1
prices resulting in lower profit
The current weakening rand 1
increase the probability of the
above risk and might lead to
even higher losses
1 Risk that the fluctuations in the 1
ZAR/USD exchange rates may
cause losses for OneStop
1 Delayed delivery or no delivery 1
holds the risk of lost customers
and reputational damage
Risk of unnecessary overheads 1
and eventual loss of profits
1 Risk of loss of market share due 1
to strong competition
1 Risk that robbery gets violent 1
and that cashiers or customers
will be hurt. This could lead to
legal action or settlements.
Risk that insurance does not 1
cover the cash theft leading to
losses.
1 Risk of collusion of security 1
company with robbers leading
to more losses in future due to
the safety risk
1 Risk that untrained staff will lead 1
to inefficiencies and eventually
lost customers
1 Fines/Penalties/Legal action 1
from breach of labour laws
Unethical business practices 1
might lead to lost customers
due to damage to reputation
Risk that managements’ 1
integrity is questionable leading
to future legal action and
accompanying losses
Risk of further contraventions of 1
legislation leading to further
fines & penalties due to
disregard for laws
1 Risk that interest rates might 1
increase leading to higher
monthly payments
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 Risk of cash flow problems due 1
to fixed payments
11 Poor safety control 1 Risk of fire and explosion and 1
resulting damages & losses
Fines/Penalties/Legal action 1
from breach of health and
safety act
12 Franchise set up 1 Risk of being limited by 1
franchise agreement leading to
less growth
13 Operating in the petrol industry 1 Petrol strikes might influence 1
availability of stock leading to
lost customers
14 UN Sustainability Development 3 Risk that the national & 1
Goals considered in general international business climate
does not support the growth of
new business

Tabular Format 1
Ranking 2
Maximum 30
(exclusive of presentation and
ranking marks)
Available (exclusive of 36
presentation marks)

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