Full Annual Report - Inchcape
Full Annual Report - Inchcape
Full Annual Report - Inchcape
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Business review<br />
Strategy<br />
Principal risks<br />
The Group applies an effective<br />
system of risk management which<br />
identifies, monitors and mitigates<br />
risks. Further details of the Group’s<br />
risk management process can be<br />
found on pages 60-61.<br />
Risk is a part of doing business; the risk<br />
management system aims to provide<br />
assurance to all stakeholders of the<br />
effectiveness of our control framework in<br />
managing risk against a background of<br />
highly diverse and competitive markets.<br />
The key benefits of the system include<br />
maximised resource efficiency through<br />
controlled prioritisation of issues,<br />
benchmarking between business units,<br />
sharing best practice and effective<br />
crisis management.<br />
The following provides an overview of<br />
the principal business risk areas facing<br />
the Group along with the mitigating<br />
actions in place.<br />
Strategy<br />
Description of risk<br />
Failure to deliver on our five key<br />
areas of strategic focus: growing<br />
market share; growing aftersales;<br />
reducing costs; managing<br />
working capital and controlling<br />
capital expenditure<br />
Impact<br />
We do not increase our profits,<br />
revenues and margins. There may<br />
be an impact on our relationships<br />
with the brand partners whom<br />
we represent<br />
Mitigation<br />
• The Group is investing in its <strong>Inchcape</strong><br />
Advantage and Customer 1st<br />
programmes to ensure that we win<br />
new customers and retain existing<br />
ones – with particular emphasis upon<br />
retaining customer loyalty in respect<br />
of older vehicles<br />
• Group-wide focus on working capital<br />
(particularly aged stock) reduction<br />
• Obtaining favourable credit terms<br />
and making improvements in supply<br />
chain management<br />
• Thorough reviews of all proposed<br />
capital expenditure<br />
Brand partners<br />
and key<br />
relationships<br />
Description of risk<br />
Not sustaining current<br />
relationships with brand partners<br />
Impact<br />
Impact on our ability to retain<br />
existing businesses on contract<br />
renewal and to take on new<br />
opportunities<br />
Mitigation<br />
• Constant focus on performance,<br />
effective communication and<br />
ensuring that our objectives<br />
are closely linked to those of our<br />
brand partners<br />
People<br />
Description of risk<br />
Failure to attract, develop and<br />
retain talent<br />
Impact<br />
Unable to develop business<br />
Employees who lack motivation<br />
Mitigation<br />
• Talent review process<br />
• Internal annual employee<br />
engagement survey<br />
• External benchmarking of<br />
remuneration<br />
• Succession plans in place for<br />
key positions<br />
Reputation<br />
Description of risk<br />
Corporate responsibility risk<br />
Impact<br />
Loss of reputation as a good<br />
corporate citizen<br />
Mitigation<br />
• Global corporate responsibility<br />
programme<br />
38<br />
<strong>Inchcape</strong> plc ¦ <strong>Annual</strong> <strong>Report</strong> and Accounts 2009