Introduction
MedTrack is an organization based in the United States of America. The company deals majorly in designing, developing, and marketing information technology solutions to hospitals to assist in keeping better records on its assets. The technology also assists hospitals to keep better track of their drugs in the store. The introduction of advanced technology will further make the hospitals work more efficiently and effectively by saving time and resources.
The company management strives to offer better products than its competitors who range from small start-up businesses to big organizations. This paper will focus on risks that MedTrack will face during its growth in the market.
Analysis
One of the risks that MedTrack faces is market risk. Market risk is the risk of losses that arises from the inconsistency of market prices. As the company grows, there are potential losses that amount due to market risks. MedTrack has invested billions of dollars with the aim of attracting more clients and securing a larger market share. To secure and maintain its market share, MedTrack had laid down both short term and long term objectives for customer satisfaction.
The specific market objectives that MedTrack has set are to save the lives of patients in hospitals. All businesses are prone to losses from their investments. Losses experienced by businesses arise from inflation in commodity prices or a decline in the purchasing power of potential clients. The overall performance of the financial market has a great impact on the economy.
Another risk the company is likely to face in the market is a competitive risk. Competitive risk is the probability of losses incurred from the decline in the competitiveness of a firm within the market. Market competitiveness is a situation where the buyers or the sellers do not have the potential to influence current market prices. MedTrack aims to achieve the bargaining power of customers. The company targets mid-sized hospitals that have the potential to invest with them by purchasing their products. The main strategy of the company to avert competitive risk is by providing quality services to its potential clients compared to other competitors.
Through this practice, MedTrack shall secure a better market share because it intends to satisfy the needs of its customers by providing after-sales services. The major challenge the company faces is the fall of prices through economies of scale. The company, however, will further target small-sized hospitals, medium-sized hospitals, and small-business clinics to supply its products. In addition, the company also faces threats from new entrants in the market and rivalry among existing firms.
One can also mention people’s risk. In every organization, the people offering services to enable its daily activities are the most important assets. People risk in an organization refers to the cost that an organization will incur because of the outcome of their deeds. People risk is one of the hardest risks to manage due to their nature and difference in cultural values. Employees are the most important and the most vulnerable people in an organizational setup. MedTrack risks losing its revenue through theft witnessed by its employees. The company also risks losing its revenue through external fraud from its clients and other people that transact business with the organization.
Regulatory risk is another risk MedTrack confronts. It is the risk of a reduction in earnings resulting from failure to comply with the rules and regulations. Business companies should follow the law and form a legal department charged with the responsibility of solving business problems. MedTrack should come up with a legal framework that protects the image of the company.
In addition, systematic risk should be mentioned. Systematic risk is the financial instability of a particular market. Systematic risk affects the entire market and not just a business organization. MedTrack cannot avoid systematic risk since it is not controllable.
On top of that, MedTrack also faces financial risk. Financial risk is a loss in contributed shares by shareholders in a company that has debts. Financial risk occurs when a company becomes insolvent and settles debts of creditors before paying dividends of its shareholders. MedTrack considers making an offer to the public to purchase its shares as a means of raising more capital to boost its activities. The company also considers merging with an equivalent-sized company that offers the same products and services. Potential shareholders risk losing their investments for fear that the company might close down before paying off dividends.
Finally, MedTrack confronts technology and operational risk. Operational risk is the risk realized through a change in the value caused by actual losses contributed by the failed internal processes. Operational risks also include privacy protection and environmental risks.
Conclusion
In conclusion, companies experience numerous risks and threats as they venture into the business field to invest their capital. All businesses strive to maximize their profits from the available resources at their disposal. Companies should come up with strategies to manage risks. This practice ensures that employees do not interfere with the daily operations of the company. Investors should also ensure that they perform adequate market research before settling for investments in their preferred areas.
Through this practice, investors can receive a tangible return from their investments. Investors should have a good financial plan to ensure success. The good market research also enables researchers to understand the strengths, weaknesses, and opportunities of a particular market.