Question

Given the recent/current COV-19 related economic crisis, what risks do you think firms face?

Select a Fortune 500 firm and discuss some risks it faces for the next year.

Answer 1

The recent Covid - 19 virus spread throughout the world has already created a scenerio where all the world ecenomies are facing the major crisis. The GDP growth rate of almost all the courties in the world have fallen sharply due to this.

In such a state where the world economy is falling has posed a risk to the various organisations and companies operating around the globe. Some of the major fields of concern for the organisations are:

a) Vast dependence on Technology: In this situation of crisis, the workforce of the major organisations have to work remotely, due to which the need for better has risen as all the work has to be done with the help of online systems which requires a vast investment in technology resources for the companies and this already has led to increase in costs.

b) Risk of Government pressure: The government of any country has the powers to take decesions which can or cannot be in the favour of the company. Like imposing a sudden lockdown can lead to hault in the production and can ultimately lead to losses for the company if it goes on for long. situar

c) Risk of Health of the workers: The worst part of the current situation is that the health of the workers is at risk and any organisations cannot afford to rsik their lives and so there would be an increase in the medical expenses on the workforce and this will increase the costs for the company.

d) Fall in Demand : It has been noticed that the demand of many consumer goods has fallen to a great extend. For example the car manufacturing sector is affected as people have postponed there requirements of purchasing motor vehicles as there are restrictions on travel in many parts of the world, So, this again poses a risk for a company.

One of the Fortune firms that will be facing few risks in the near future would be Amazon. As the online selling chain is operating all around the globe the risk that can pose in it's path are:

a) Physical Availability of Workforce: The workforce is the most important part of the company and in this cov-19 situation people are fearing to work on the ground as this poses a risk to there life to a certain extent due to which the physical availability of workforce has decreased leading to more pressure on the already working due to growing demand of online shopping.

b) Expansion risk: For any organisation to grow it has to keep on expanding but in the present situation the expansion plans are all in stand by state and due to huge demand tha company will have to work on it otherwise the customers can shift to the competitors which poses risk to the company.

c) Need of Better technology: Due to huge increase in online shopping trends, there is need for better technology to carter ther needs of the customers and also the vast increase in customer base the company has to keep updating its resourses which increases the cost to company.

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