The management of operational risks and impact of product availability

Abstract

This paper presents a brief analysis of the impact of operational risks and their impact on the delivery of value to consumers (loyal and potential) from the aspect of product availability. Operational risks, in this case, take priority over other types of risks such as external risks and risks of change. This hypothesis is also confirmed by some research with the finding that a large number of cases of unavailability of products intended for daily consumption have the same origin in the form of poor organization and orientation of the business process in retail outlets. Some of the consequences of inefficiency arise from: insufficient number of employees, uneven stocks in sales warehouses, inadequate implementation of internal logistics flows. The product availability is an integral part of the company's overall marketing concept with the intention of achieving goals through greater efficiency in business compared to its competition, and for retail it is creation, delivery and relationship with consumers in the delivery of value, in targeted market segments. From the customer's point of view, product availability is still treated by many retailers as a lack of stock. This leads to a situation when the demand (due to an insufficient amount of product) cannot be met and the orders are cancelled. Therefore, subsequent satisfaction of the demand is approached, upon receipt of a new quantity of the product. This understanding, especially in the conditions on the crisis, has been overcome and this paper represents an attempt to shed light on this phenomenon from different aspects.

Keywords

• product availability
• market
• retailers
• risk management
• marketing