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MBS572 - Risk Management

Assignment 1

Development of Business Case

Name: Mohamed Ryad Jeafer

ID: 31226647

Date: Wednesday, February 10, 2010

Lecturer: Aiva Svede


Background of the business:

Algharry Hajj, Umrah is owned and managed by Mr. Ryad Kazim Jeafer. MR. Ryad

Jeafer started this company in Sharjah in 1998. There are around seven employees in

the company. Most of the worked is shared by all employees, such as data entry.

Other works such as going to the consulate, to the bank or other external jobs are

given to a particular employee. All the major decisions and acts are done only by the

manager "Mr. Ryad Jeafer". The Company is a service oriented whose main objective

is to help people to go to Pilgrimage.

Mr. Ryad Jeafer had a good experience in hajj because he had worked for three years

before he opened Algharry for Hajj and Umrah. In the first three years, business was

booming, he had customers from Canada, USA, Australia, Denmark, and UK. There

were a total number of around 400 people going with him to Hajj, all under his

leadership.

Mission of the business:

The vision of Mr. Ryad of serving the people was such a glorious vision, that there

would be customers who would volunteer to help and serve the other customers; the

employees would work for extra hours without asking for overtime hours. They all

cared about the company as much as Mr. Ryad himself did. The company's

reputations and its quality of service have reached its peek in 2006. The company

received good conduct certificate in 2003, 2004, 2005, and 2006.

In 2007, the U.A.E Ministry of Hajj began limiting the number of people allowed to

go for Hajj and Hajj was the main source of income for the company to spend on the

salaries, the rent and all the other kind of expenses. The company had to create a

change.

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Business Objectives:

The company had to pursue its objectives of reaching to the people and serve them

through other means. It extended its activities to include tourism, and the company's

name was changed to Algharry Hajj, Umrah & Tourism in 2007. The company had

tours to all religious places in Saudi, Syria, Iran and Iraq. The customers of the

company where 95% Iraqis, but after we began dealing with tourism, the company

gained more customers of different nationalities such as Iranian, Indians, Pakistanis,

Afghanis and Emiratis. There were around 15 trips to Saudi, 3 trips to Iraq, 2 Trips to

Iran, and a trip to Syria yearly.

Key Business Strategy:

When Algharry extended its business, it had to change its working strategy. It

developed a working structure if followed; any trip would be a successful trip. The

strategy was as the following:

 Advertise before a minimum period of two months for any trip.

 Book the hotel rooms, and inform the bus drivers and the agents in

each city about the trip date and the expected number of customers.

 Only urgent visas are allowed on the final week.

 Provide the customers with all the trip activities.

 Contact the people one day before the trip date to reinsure that every

customers knows the departure time, and remind those who have an unpaid

amount to do their payments.

 Contact the bus driver to confirm the trip and confirm that the bus is in

a very good condition.

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 Send an agent with the group and provide him with all the details such

as the rooms division, the contact numbers, etc.

 Send the rooms divisions to all the hotels and the other agents.

 Provide a tourist guide who will be responsible for the group from the

day they arrive till the day they leave.

 Remind all the people of the departure time back to U.A.E.

In 2007, the Najaf airport in Iraq began its operations and they only had flights from

Dubai to Najaf. Mr. Ryad optimized this opportunity by having a contract with the

Jupiter airlines and Algharry became its exclusive agent for the first two years in

Dubai as well as in Najaf city.

Therefore the company extended its activities to include selling airlines tickets around

the world and emphasized on Iraqis as we were the only exclusive agent. The

company's reputation's expanded more and more until customers were calling us from

U.K, Bahrain, and Saudi to purchase tickets to Iraq.

The people in Iraq also wanted to go for Umrah, but there weren't any direct flights,

so Algharry Company established two offices (one in Najaf city and the other in

Baghdad) and was the first company to rent flights from the Iran Air airlines and from

the Saudi Airlines to carry Iraqis from Abadan city in Iran to Jeddah and back. In May

2006, the first trip to Umrah began and it was successful. The company at the end of

that year had around 3000 customer from Iraq only.

Even thought the company was providing a high quality service to the people,

business in 2009 dropt down with the depression in U.A.E for several reasons:

1. Jupiter airlines had more 15 agencies in Dubai, and they had flight to

Najaf city from Bahrain, and from Damascus.

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2. The number of Umrah contractors in Iraq, Algharry was not anymore

the only company to provide that service.

3. There were direct flights from Baghdad and from Najaf to Jeddah.

4. The depression in U.A.E affected the Umrah business; there were half

the number of people who went to Umrah than the previous year.

5. The ministry of Hajj decreased the number of people allowed to go for

Hajj up to 30 people per Hajj Company.

Therefore, the company had to open a new branch in Ajman whose main objectives

and goals are:

• Increase and develop the ticketing activities.

• Extend tourism to other countries such as Turkey, Egypt and Europe.

• Increase and develop the marketing activities as well as advertise more

to gain more customers, and try to reach to the different categories of people,

people with different religions and different point of views.

Stakeholders:

Stakeholders include all the people who either affect the business or get affected by

the business, in other words, anyone who as an interest in the company is a

stakeholder, for example the employees or the customers. There are two categories of

stakeholders, internal stakeholders and external stakeholders.

Internal Stakeholders:

The internal stakeholders include all the members of the company. Without the

internal stakeholders, the company cannot operate. Internal Stakeholders include:

 Owners and shareholders (Mr. Ryad Jeafer)

 Managers (Mr. Ryad Jeafer)

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o They Organize, plan and control the activities done in the

company

 Employees or staff (Ansary)

o A company without employees cannot operate. The manager or

the owner cannot do all the work alone. Employees work for certain

hours and have specific activities to accomplish.

External Stakeholders:

The External Stakeholders on the other hand include all the rest of the people who are

affected or have an interest in the business such as:

 Customers

o If a company does not have customers, then the company will

not make any profit and will go bankrupt. The customers purchase the

goods or services provided by the company. Therefore the company

must satisfy their needs.

 Suppliers (hotel stuff, bus drivers, consulate employees, etc)

o Every company needs certain resources to be able to provide

their goods and services. Therefore, the company must maintain a good

relationship with its suppliers to get quality resources with a reasonable

cost.

 Community

o The company and the community coexist together, each help

the other in certain ways, for example, the community provide the

company with the employees and the company provide the community

with its products and services

 Government

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o The government increases the cost to the company by taking

taxations and other type of fees.

o They also limit the activities of the company ( for example the

ministry of Hajj limited the number of people to go for Hajj up to 30

people per company where as it used to be unlimited.

o Also the companies help the government by providing more

employment opportunities and enhance the economical situation of the

country.

Relationship between the business and the environment:

Algharry Hajj, Umrah and Tourism have negligible effect on the environment.

Risk Identification Processes & Risk Assessment Processes:

Every company should have a well structured risk identification processes, but not all

actually does. For example, in Algharry Hajj, Umrah & Tourism, the risk

identification is only done when a member of the company identifies the risk and

presents it to the manager (Mr. Ryad Jeafer) where he will take the action of either

avoiding the risk, or will have the appetite for the risk and go for it without a proper

identification process. For example in February 2009, Mr. Ryad had booked hotel

rooms for about sixty customers in Iraq, hoping that he will get enough customers.

Ten days before the traveling date, only forty customers had registered for the trip, so

there was a risk that if there wasn’t enough customers and the company did not cancel

the extra hotel rooms, the company would have to pay for the hotels a total cost of

about AED 95000, but if he cancel the extra rooms and then more people come to

register, he would then not have enough rooms. Mr. Ryad decided to take the risk and

wait for more people to register, and later more people did come and registered.

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In that example, Risk identification was done, but not through a routine, structured

process, it was done only when Mr. Ryad realized that he does not have enough

customers, and that it would cost AED 95000 if he does not cancel the extra rooms.

On the other hand, if more customers register, then the company won't have enough

hotel rooms, which means that they will be able to register, and that affects the

company reputations, and a losing of opportunities. Mr. Ryad did the risk assessment,

and graded the risk as moderate, because even if the company could not get more

customers, the company would probably try sell these hotel rooms as it was a high

season and a lot of tourist were going to Iraq, where as if he would cancel the rooms,

it would be impossible to get extra rooms later.

Integration of Risk Management:

Risk Assessment is the systematic process of identifying the risk and evaluating them.

The risk likelihood and its impact on the company defines the risk grade of being a

high risk, moderate or a low risk

Risk assessment are done to prioritize the risks and to be able to affective decisions.

There are special tools that help in risk assessments such as forms and tables that

allow the proper evaluation of risks.

The benefits of risk management are:

 Prevents problems happens, or at least, we will be expected the

problem and we won't be socked.

 It allows the continuous improvement of the company.

 Enhance the communication between the stakeholders.

 Increases customer's satisfaction.

 Increase the quality of the service provided

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The benefits of risk are dependent on how often the risk (its frequency) and on the

risk assessment process.

Referencing

 http://portal.surrey.ac.uk/portal/page?

_pageid=823,181132&_dad=portal&_schema=PORTAL

 http://en.wikipedia.org/wiki/Risk_management

 http://www.uws.edu.au/__data/assets/pdf_file/0018/7092/HazardID_Pr

oceduresA.pdf

 http://www.bized.co.uk/educators/16-

19/business/strategy/presentation/stakeholders.ppt

 http://www.boxesandarrows.com/view/understanding_organizational_s

takeholders_for_design_success