CASE STUDY PHASE 3 - FINAL PHASE Example | Topics and Well Written Essays - 500 words

PHASE 3 - FINAL PHASE - Case Study Example Risk mitigation strategies are divided into four: Risk Acceptance, Risk Avoidance, Risk Limitation and Risk Transference. This is a kind of strategy where the owner of the Apple decides to accept that they are working under some risks and decided to live with it without doing anything. Accepting risks will not see to it that the negative impacts associated with the risks are reduced or eliminated completely. Risk acceptance strategy is usually a common option of choice when the calculated cost avoidance and/ or limitation as other strategies are deemed to be more than the cost of risk. Risks that don’t tend to happen frequently are always preferred to be accepted rather than being reduced or eliminated (Mark, Galai, & Clouhy, 2005). Apples outsourcing operation can therefore be only accepted since the cost of manufacturing these parts by itself, is much more expensive than the risk that accompanies it. The risks that are associated with the disruption of the other companies that Apple deals with also have a low likelihood of occurring. This is a strategy that sees to it that risk exposure is avoided at all costs. It is opposite to risk acceptance. In terms of cost of implementation, it is expensive than all the other three strategies of risk mitigation (Mark, Galai, & Clouhy, 2005). For the Apple scenario, an example can be Apple decides to manufacture its products so as to see to it that their fate does not rely on the functionality of other companies. This will be expensive in nature since it will mean that Apple will have to expand its size and bring more specialists in. Using this strategy will mean that Apple stops outsourcing for services and therefore come up with its own human capital which will be more expensive. The budget of apple will therefore shoot sky high but the risks related to reliance on other companies will have been avoided. Most businesses prefer the risk limitation strategy compared to other strategies