The paper "Risk & Value Management: Autor Tires Ltd" is a wonderful example of a case study on business. Manufacturers of tires for cars and trucks are among the rapidly developing business in the world. There is a high demand for tires as the motor industry continues to grow at an alarming rate. In fact, this industry is one of the most growing businesses in the world, however; there are various challenges facing it. Some of the challenges facing this industry include competition, environmental laws, labor laws, pollution, and many others (Alexander, 2013). Auto Tires Ltd is one of the industries situated inside the Industrial Park of Blumac town.
This company is the main manufacturer and distributor of car and truck tires within the European Union. This is essay will assess all the risks and challenges facing the company, and the effect it has caused both the company and the communities living within the area (Grace at al, 2014). Some of these risks include: Political Risks - the political environment surrounding Auto Tires Ltd has affected the company both positively and negatively. However, this essay will focus on the negative effects of the political environment to the Auto Tires Ltd.
it will analyze political risk facing this organization and the damage it has already caused. The key risk that is currently facing Auto Tires Ltd is government regulations. The industry is expected to pay huge taxes. The increase in taxation has affected the profitability of the company, and this has also made it hard for the company to predict future sales. Frequent changes in taxes affect the ability of accountants and auditors to forecast the future of the company (Bolton at al, 2013). Another government regulation that has interfered with the performance of Auto Tires Ltd are the laws governing the environmental pollution within the region.
Industries are taxed for pollution and in some cases, injunction court orders are sent to the company. Such issues are part of the risks that are facing the entire management of Auto Tires Ltd. finally; the political situation is sometimes unpredictable especially the campaign periods. This has been part of the challenges facing the company. Economic risks - Auto Tires Ltd, the manufacturing company is one of the biggest companies distributing tires for cars and trucks.
Sometimes, this company faces risks that are associated with frequent changes in the economic environment. Some of these risks that arise because of economic changes include fluctuation in interest rates, exchange rates, and the total bans of some certain products. Auto Tires Ltd has faced some of these issues, making the company loses its international customers. ‘ Foreign regulatory authorities also interfere with foreign investors who are willing to invest in Auto Tires Ltd. This has been a great challenge because this foreign investor forms part of the share capital of the company. The above economic risks have affected company performance because of the following issues.
First, economic risks have made it impossible for the company’ s management to make sound decisions regarding the future of the company. Furthermore, the company is finding it hard to open more branches due to the uncertain political future of other countries. Expanding the capital of the company has also been so hard because foreign investors are not willing to invest due to the complex rules and regulations for their respective countries.
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