First Assignment

Kencana

Jl. P. Diponegoro 106 Yogyakarta, 55233

phone. +62-274-513064

A. Introduction

Risk is a many kinds of obstacle that can influence a company or business for achieving goals. Risk can also define as a something that make a loss on profit. It also explain some kind of negative impact that influence a company or business future event. But risk not only in a loss but also can be gain also.

In general, there four types of risk that are hazard risk, financial risk, operational risk, and strategic risk. Hazard risks is defined as risk from fire and damage, theft, business interruption, liability claims, disease and disability. Financial risks include risks from price, liquidity, credit, inflation, purchasing power, and hedging. Operational risks include risks from business operations, empowerment, information technology, and business reporting. And the last one is strategic risks include risks from reputational damage, competition, customer wants, demographic and social trends, technological innovation, capital availability, regulatory and political trends.

In this project, it will discuss and explain some type of risks that faced by some company while they run their business. This project also exploit and evaluate how the company face and deal with the risks. For this project, I choose Photography business since nowadays a digital technology is growth rapidly. So, there will be many aspect that can be evaluate related with this kind of business.

B. Company Profile

Kencana Art Photography which has started it's career for more than 29 years in Photography Industry. It located in Diponegoro street 106, Yogyakarta. Kencana facility are supported with high technology and professional staffs. Kencana Art Photography opens everyday at 8.30 a.m – 9 p.m, and on Sunday, it opens at 8 a.m – 1 p.m. In public holiday Kencana also open but only half day. Kencana name's has been known by the society around Central Java and now we are going international wide.

Kencana Art Photography serve Photography Services such as :

* Wedding Photography (from Pre-Wedding, Wedding Day, and Honeymoon) Indoor & Outdoor
* Photo Documentation (Parties, Meetings, Shows & Events, etc)
* Products (Food, Furniture, etc)
* Pas Photo, Company Profile
* Commercial and Advertising (Billboards, Industrial, Interiors, Exteriors, Architectures, etc)
* Baby and Teenage Photography
* Graduation
* Family Portraits, Fashion
* and much more

C. Risks

The risk that faced by Kencana Photography:

Hazard risk

· Property damage and loss

It can be caused by both customers and employees. Every customer and employee may have good or bad behavior. For bad customer behavior most of them does not care about others property, and they tend to not careful use the things. Sometimes employees also do not keep with the property in the place that they works since they think that all the property are not their own property.

· Theft

Some of the customers or employees who has bad attitude, they are tend to steal something from the shop.

· Damage in a building

Disaster can make a damage in the building and it will make this shop getting some loss from it. Like 2 years ago there is an earthquake that destroyed many buildings in Yogyakarta.

Financial risk

· High inflation / purchasing power

Inflation also has an important roles in business, which is if there is an increase in inflation most of people will prefer to save their money, not spend their money too much and use it wisely. So, high inflation can decrease the customers purchasing power.

· Asset value

All the value of the asset of this shop, such as camera, printing machine, computer, etc will decrease as the time goes on. This shop have to be able to buy a new technology, and it will cost a lot.

· Price

Because this shop is a kind of service company so some of the price may be different from one customer to another, it depends on their requirement. Some of the customer who does not know about it will complain about it ( the price ).

Operational risk

· Unsatisfied service

Kencana Photography try to make a good image to their customer by giving it best service to them, but sometimes employee can make a mistake and it make a customers unsatisfied with the service. It can make them likely to move another shop. Directly it will impact to Kencana because it will loss some of the customers.

· Human resources

It is not easy for Kencana to manage all the employees. Each of them has a different attitude and behavior. An increase in all aspect also encourage them to ask for a higher salary.

· Pension fund

Kencana photography have some employee that has worked over 20 years, and if their skill or ability is not good enough again this shop will stop them. To stop them Kencana have to give a pension fund. For them, this shop have to give the pension fund equal to the government regulation. It will spend a lot of money.

· Taxes

Kencana make many advertisement and for it this shop have to pay the tax of the advertisement.

Strategic risk

· Competition

Nowadays, with growth in a digital era makes more people open the photography business. It make a big competition in photography business.

· Customer want

Some customers can be make an easy requirement or can be make a difficult requirement. It depends on their taste. Since Kencana is a kind of service company, so it has to able with the customers requirement. Whatever the customer want Kencana has to give their best service to the customer.

D. How to deal with risks


Hazard risk

· CCTV

Kencana use CCTV to monitor and record all activities in the shop. It also help to minimize the rate of theft by both customers and employees, because all activities that customers and employees done are recorded in the computer. So, it can be a tools to proof if there is something bad (such as: property loss) happens.

· Insurance

Building insurance in order to prevent a big loss when there is a disaster.

Financial risk

Kencana pay more for some employees to take care of the equipment there, because bonus (money) can motivate employee to keep that equipment to stay in a good condition.

For loyal customer, Kencana will give a special price or discount for them.

Operational risk

Offer a special package that differ from others in order to attract or interest customer.

Training the employee each month by invite the expert of Human Resources Development to increase their self service.

Strategic risk

Kencana always following the trend in order to keep their product always up to date in order to attract customers.

Kencana always try to gives the best service for their customer.


E. CONCLUSION

From all the explanation above, it is clear that there is 4 kind of risks. Each type of risks have a different aspect that can influence the running of the business. So, a company must have their own strategy to deals with that risks in order to keep their business in a good condition and keep running well.


F. REFERENCE

Interview with the owner of Kencana Art Photography, Mr. Lie Yulianto

Website : www.kencanaphoto.com

Handbook : Risk Management, compiled by Mr. Alex Jatmiko Wibowo