EACG2708

Question 2.4 [20 Marks, 30 Minutes]

Background information:
Jambo Bazaar (Pty) Ltd (Jambo Bazaar) is one of many new online retail stores in South
Africa. To diversify itself from other online retail stores, Jambo Bazaar has invested
heavily in implementing a bold new marketing strategy that has never been attempted
before.
South Africa's e-commerce industry has experienced tremendous growth in recent years,
with the COVID-19 pandemic accelerating the trend towards online shopping. Many new
online shopping platforms have appeared, and the competition is fierce.
To buy any product from Jambo Bazaar, a potential customer needs to sign up for their
website (create a profile) by providing an email address, name, surname, and contact
number. Once customers have signed up, they can browse the website for the items they
want to purchase and add them to their online basket.
Once complete, customers must check out the items in their online basket, complete their
delivery information and pay online by providing their credit card details or using third-
party payment platforms (E.g., Snapscan or Zapper). Once payment has been confirmed,
the order is accepted, prepared and shipped to the customer anywhere in South Africa.
The compliance officer of Jambo Bazaar is still undergoing training in all the relevant laws
and regulations pertaining to online retail stores.
Risks Identified:
While the online retail sector presents several growth opportunities, it also poses unique
risks that online retailers must consider. Jambo Bazaar's board has prepared the following
risk register for the key business risks that they have identified:
Risk Risk Description Likelihood Consequence Risk Response
The risk is that products The purchasing
Quality Risk:

ordered are returned due department must

Product

to poor quality, resulting review each

Likely Moderate
in losses and loss of supplier for the
future sales. quality of their
products.
The risk is that the The board has
supply is disrupted due decided to buy
Supply Chain

to supplier bankruptcies, insurance on all

Risk:

natural disasters, and Possible Catastrophic items shipped to

political unrest, resulting customers and
in delayed customer include this in the
orders. shipping fee.

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Risk Risk Description Likelihood Consequence Risk Response

The risk is that negative The board has
reviews, social media decided to deal
Reputational

backlash, or poorly with any negative

Risk:

managed customer Possible Moderate publicity and

service interaction will social media
result in future loss of posts as and
sales. when it occurs.
Jambo Bazaar has recently decided to improve its risk management process. The first
step would be to prioritise and rank the key business risks identified by using the following
risk matrix:
Consequence
Negligible Minor Moderate Major Catastrophic
1 2 3 4 5
Almost
Moderate High Extreme Extreme Extreme
Certain
5 10 15 20 25
5
Likely Moderate High High Extreme Extreme
Likelihood

4 4 8 12 16 20
Possible Low Moderate High High Extreme
3 3 6 9 12 15
Unlikely Low Moderate Moderate High High
2 2 4 6 8 10
Rare Low Low Low Moderate Moderate
1 1 2 3 4 5

Required: Sub- Total

Total Marks
(a) Based on the information provided above, identify and
explain five (5) additional business risks that Jambo Bazaar 5 x 2 10
(Pty) Ltd faces that the board has not yet identified.
(b) List the six (6) steps in the risk management process.
0.5 x 6 3
Half a mark will be awarded for each step identified.
(c) For each risk identified in the above risk register,
calculate/determine its rating using the provided risk matrix. 3 x 1 4
Your answer should include an overall ranking from most to 1 x 1
least important.
(d) For each risk response in the risk register above, identify (list)
3x1 3
the type of risk response (strategy) the board has implemented.
Total Marks 20 20

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