Risk Management Essay

1094 words - 5 pages

Toyota Motor Corporation: Toyota is a Japanese automaker headquartered in Toyota, Aichi, Japan. In 2013 the multinational corporation consisted of 333,498 employees worldwide and, as of March 2013, is the thirteenth-largest company in the world by revenue. Toyota was the second-largest passenger automobile manufacturer in 2012 (by production), the largest in overall production including commercial vehicles and in July of that year, the company reported the production of its 200-millionth vehicle. As of November 2013, it is also the largest listed company in Japan by market capitalization.Toyota's operations are subject to currency and interest rate fluctuations and financial risk: ...view middle of the document...

This may reduce profit and also lead to the need to reduce price of its vehicles. Also the ever changing needs of its customers may pose a risk for Toyota. Users require cars to be safer, cheaper, with lower carbon emission. Toyota success may be dependent on its ability to offer new innovative competitively priced products that meet customer demand on a timely basis.Risk Prevention: Toyota has concentrated sales of its cars to North America and emerging nations. Understanding the different needs of different users has influenced R&D and design of cars.Political, Regulatory, Legal and Other Risks: Various laws and government regulations such as safety, environmental issues. Over the years Toyota has had to recall some models of its cars. This has affected its brand image and position. Also some government enforce trade barriers and price controls.Risk Prevention: Toyota has improved on safety issues and recalled faulty cars to meet global safety regulations. There has also been an effort to reposition the Toyota brand through marketing techniques.East Japan Railway Company is a major domestic passenger railway company in Japan and one of the seven Japan Railways Group companies. The company name is officially abbreviated as JR East in English, and as JR Higashi-Nihon in Japanese. The company's headquarters are in Yoyogi, Shibuya, Tokyo.Its operations are subject to currency and interest rate fluctuations and financial risks: Like Toyota, fluctuations in exchange rate has an impact on JRs operation. Cost of purchase of materials for railway constructions and train spare parts is highly influenced by this. The recent appreciation of Japanese Yen however means that they can get products cheaper from international markets. Cost of financing is dependent on interest rate. Cost of borrowing and Foreign direct investment for JRs highly capital intensive projects is limited by the interest rates in Japan.Risk Prevention: JR have been able to exploit the appreciation of Japanese Yen to source cheaper materials.JR may be adversely affected by the continuing effects of the Great East...

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