Risk Analysis for New Product Introduction

Risk Analysis for New Product Introduction

Risk Analysis : Risk is often thought of in terms of chance ( or probability ) of loss . The probability of a particular outcome can be defined as the proportion of times that such an outcome is observed to occur in an infinitely large number of independent events . Measures of probability thus range from 0 to 1 with both ends of the scale representing certain outcomes : a zero probability means that the particular outcome is certain not to occur , whereas a probability of 1 indicates that each event will

produce that result . Therefore as the probability of an outcome approaches either end of the scale , the degree of uncertainty as to its occurrence diminishes . Whereas an individual 's attitude towards risks may be , if he is to maximize his welfare the first step must be to identify and evaluate the risks to which he is or may become exposed . One approach would be to list

all those events which may bring about a deterioration in one 's present welfare in regard to

physical and mental well being

current income

the value of one 's assets

any other events that may frustrate the fulfillment of future welfare plans

Risk evaluation involves two elements

the probabilities of loss producing events occurring and

the potential losses

It is not sufficient just to know that an organisation owns or is responsible for property which is exposed to damage by fire , explosion windstorm , flood , or other perils , or that it produces and /or sells products that could cause injury or damage

Risk Control covers all those measures aimed at avoiding , eliminating or reducing the chances of loss producing events occurring , of limiting the severity of the losses that do happen . Here , one is seeking to change the conditions that bring about loss producing events or increase their severity . Though some measures call for little more than commonsense often considerable technical knowledge is required , for which the risk manager will need to turn to experts in the particular fields

1 . As per given example 14 .3 , the overall problem in this case is

The model of engine , which is producing by the Maritime Engines and Motors (MEM , a medium-sized British firm manufacturing outboard engines and motors for pleasure craft considering the introduction of new product based on modifications did not meet federal emissions standard So this model was banned in the USA . Also this model was of conventional technology with modifications which was in competition with German technology in which micro chip is used

2 . The factors affecting in this case are Firstly it did not meet the federal emissions standard . Secondly , it uses conventional technology with modifications , whereas it competes with German technology in which microchip is used . There is a competition in the market , a little change in the technology will lose the market share , it is feared by the company

3 . The managerial , organizational , and technological issues and resources related to this case are how to manage the market share...