ENRM7322 - Enterprise Risk Management Assignment

Assignment Task

The Roostery

The Roostery is a trendy diner and take-away situated in a busy neighbourhood in Cape Town. Specialising in delicious and affordable chicken-based meals, the outlet has gained popularity for its unique flavours and friendly and efficient service. The business is managed by a passionate owner and chef, Hazel, who is dedicated to providing a delightful culinary experience to her customers.

Recently, the price of chicken increased, and it became difficult to order chicken in the same quantities as in the past. Hazel was unaware of the changes in the environment as she has been so focused on preparing food serving her customers. Her supplier suggested that she reads the following article:

South African poultry industry faces loss as 7.5 million birds culled due to Avian Influenza outbreaks

The South African Poultry Association (Sapa) has updated the Portfolio Committee on Agriculture, Land Reform, and Rural Development, estimating that the latest Highly Pathogenic Avian Influenza (HPAI) outbreaks have significantly impacted 30% of the South African poultry industry.

This latest outbreak has led to the culling of approximately 7.5 million birds.

The outbreak involved strains of H5N1 andH7N6 of HPAI, with potential losses for the poultry industry exceeding R1.8 billion (US$97.8 million), which is comparable to the losses experienced during the previous HPAI outbreaks in 2019, which led to the culling of three million birds. Sapa’s General Manager for the broiler organisation, Izaak Breidenbach, has estimated the losses to be approximatelyR3 billion (US$163 million). be approximatelyR3 billion (US$163 million). This estimate was based on the 30% impact on the industry, which equates to about 30%of its annual revenue of roughly R12 billion (US$652.3 million)

The H7N6 strain of the virus was initially reported in June on a farm in Mpumalanga. While it is less deadly than the H5N1counterpart and spreads more slowly, it has still had a significant impact on the local poultry industry.

The H7N6 strain in South Africanis not closely related to other AI strains worldwide, which limits the efficacy of existing vaccines against South African strains.

Efforts to develop locally produced vaccines are in progress, but this process will take some time to complete.

Sapa anticipates that the poultry industry will be reduced to approximately 17.3million layer hens by early 2024, a significant drop from 27.6 million layer hens in 2019 and 27.4 million in 2022. Recovery of lost production is expected to take about 17 months, with a focus on recouping the 30% impact next year.

The majority of South African poultry production relies on caged operations (95%), making the industry particularly vulnerable to disease spread due to the proximity between birds.

Despite reported cases of HPAI declining in October compared to September, concerns have risen due to a new case of the H7N6virus in George, Western Cape, which raises the possibility of another outbreak.

Sapa suggests that fast-tracked approval of HPAI vaccines and importation of fertile hatchery eggs are key actions to mitigate further losses in the poultry industry. Importation of liquid and powdered eggs for industrial use in bakeries, rather than shell eggs, could increase the availability of shell eggs for consumers.

The association also advocates for the creation of a disaster fund to assist farmers who have incurred substantial financial losses due to HPAI. Currently, South Africa is evaluating the safety and efficacy of developed vaccines, particularly for H5 and H7 strains.

According to SAPA, the use of vaccines may lead to lower fatality rates and recallings, although it is essential to manage the risk of HPAI mutations and potential impacts on humans and other mammals. Sapa is in favour of compensating producers for culling and supporting stricter adherence to basic biosecurity measures among poultry farmers.

Hazel realised that she needed to become more pro-active in managing her risk. She is now considering a significant expansion of the menu by introducing a new line of plant-based chicken alternatives to cater to the growing demand for vegetarian and vegan options. This strategic move aims to attract a broader customer base and align with the increasing trend towards plant-based eating. However, the introduction of plant-based alternatives presents inherent risks and challenges for the diner.

Introduction

Provide some background information and a summary of what is to follow in the report. The introduction should entice the reader to continue reading.

Risk Management

Apply the three (3) responses to risk to The Roostery

Risk Identification

• Apply the key features of the risk-identification process to The Roostery Note that marks will only be awarded for application. No marks will be awarded for theory. (10)
• Differentiate between risk and uncertainty by using comprehensive, practical examples that are relevant to The Roostery. Note that marks will be awarded for theory and application. (10)
•  After conducting further current and factual research, identify two of three of the following risks relating to diversifying into vegan foods:
• Economic risks
• Competitor risks
• Supplier risk

Risk Evaluation

Evaluate each of the two risks identified in Q.3. Evaluate each risk. Clearly indicate the risk and the impact that it would have on The Roostery.

Risk Control

• Explain what the objectives of risk control are. Support your explanation with examples relevant to The Roostery.
• Suggest a risk control measure for each of the risks identified in Note that marks will only be awarded for application. Each strategy to be linked to a risk and be comprehensive, practical and relevant to The Roostery
• Choose between occupational safety and occupational hygiene. Provide two examples for your choice (5)

Risk Financing

Cost-of-risk is the sum of insurance cost; unreimbursed losses; risk control and loss prevention expenses; and administrative costs. Create a scenario for The Roostery where all of these costs are illustrated.

This ENRM7322 – Management has been solved by our PHD Experts at My Uni Paper.