Risk Management: JCB Case Study

Extract

[...] The prevailing trend in the UK's manufacturing sector implies, JVC value chains will encounter disruptions affecting its closed loop production processes. Consequently, JVC operations in its production plants located in the UK will encounter unsustainability as suppliers' interdependence becomes doubtful in the future. This will halt its policy of preferring internal growth driven by innovation 6 and building entirely in the UK. The situation will warrant sourcing from international suppliers, further exacerbating the manufacturing challenges including additional administration costs of supply chains, delivery delays and short termism of international sources. [...]

[...] This may affect its backhoe loaders in a country where it controls more than 70% share. Although JVC would retain its market share in India, its growing overreliance in this market suggests possible decline of its volume (Powley, 2013). Declining Manufacturing in the UK Unlike the growth recorded for its overseas sales, JCB reports wobbling sales revenue from its UK sales. This arises partly from channelling more resources to expand its global reach, the declining manufacturing activities in the country is to blame. [...]

[...] The emergence of liquidity crunches and stringent regulatory roadblocks results in slowdowns in the infrastructural development. This arises as most governments aim to control the money supply in the economy. As a result, most customers avoid high spending in infrastructure. This hurts JCB growth plans in Asian market, given that the region is yet to witness full recovery from the Asian and global financial crises. The financial challenges affecting its dominant markets including shortage in infrastructural capital, generates funding gap that breaks the closed loop of infrastructural development. [...]

[...] this imply that though JCB's portfolio present many products demanded in Inida, it has kept away from supplying machines in segments that its rivals are better placed. for example, Caterpillar is the world leader in both the the wheel loaders and mining machines, therefore well placed to assume early mover advantages as the Indian mining sector opens up (Thomas, 2011). Bibliography American Society of Insurance Management., & Risk and Insurance Management Society. (1969). Risk management. New York, N.Y: American Society of Insurance Management. Krause, A. (2006). [...]

[...] This fete replicates in the emerging markets such as Brazil and China as local companies pose stiff competition. Although these countries manifest themselves as the most promising markets for its sales as construction booms in tandem with the economic growth, it faces with stiff competition from indigenous manufacturers such as Liulong and longgong as they supply at half prices. JCB India is a vital part of the larger JCB group that allows continued investment in India translating into more success. [...]