Risks

“No risk – no fun!” How honest does Sue Shi have to be when she is talking to potential investors about the risks involved in a start-up? How risky is this idea of hers?

Take a look at the following paragraphs and choose the one you feel is best for a risk analysis:

Choice A

Whilst it is true that The Sushi Experience is the only company currently focusing on vegetarian sushi products with particular attention paid to the design element of every recipe, other companies could be quick to jump on the bandwagon. Customers may not like our designs and products. We may also rely too heavily on one producer – Donburi Ltd. If they have problems we will have problems.

Choice B

There is no other company in the North East of England who produces designer sushi products to this high standard. We expect a high turnover and a high market share. We are therefore very optimistic and expect no significant problems.

Choice C

The Sushi Experience has considered the following risks:

Losing our competitive advantage
The Sushi Experience is the only company selling designer sushi products in the area at the moment. However, the competition will not turn a blind eye and could follow suit with their own creations. We, as a company, must therefore continue to move on, creating new designs, flavours and recipes. We must never become complacent. Innovation must remain a priority.

Our products do not appeal to consumers
This is a normal risk factor in the food industry. Market research conducted by Geordie Advertising and aimed at specific target groups showed a favourable trend. 72% of consumers asked said they enjoyed the product, were particularly attracted by the designer presentation and would not hesitate to recommend the product further. Market research updates will be a vital part of future projects.

Production dependency
The Sushi Experience relies heavily on Donburi Ltd. for the production of our recipes on a large scale. However, both sides feel that The Sushi Experience could become a key account for Donburi.

Promotion Failure
A large proportion of the company’s advertising and promotion budget has gone into Welcome to The Sushi Experience. Success on the day is very likely but, Geordie Advertising has already planned an alternative – more traditional – advertising campaign as a back up.

 

 


Back to 6th session Financing