Business Unit 4

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What is a contingency plan?
A contingency plan is a plan devised for an outcome other than in the usual (expected) plan. It
is often used for risk management when an exceptional risk that, though unlikely, would have catastrophic consequences.
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What is the aim of a contingency plan?
The aim of contingency planning is to minimise the impact of an unforeseeable event and to plan for how the business will resume normal operations after the event.
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Examples of contingency plan
1.Fire practices
2. keeping back-up copies of data from computers
3. planning for a situation in which a competitor makes a take-over bid
4. having back-up plans in case there are problems with suppliers
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Benefits of contingency plans
√ Businesses face many risks, both quantifiable
and unquantifiable.
√ By having a contingency plan, a business will
be prepared for any eventuality that may occur.
√ This may save the business time and money in
the long run.
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Reasons against contingency planning
X Contingency planning may be expensive and
time-consuming to carry out.
X Unexpected events may still occur, since it
is virtually impossible to plan for every possible
outcome.
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To decide which events to plan for, a firm will consider...
• How likely is a particular event to happen?
• What is the potential damage if it does occur?
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Examples of crises for which contingency plans might be drawn up are
• A situation where a food producer’s products are contaminated and it has to recall them
• Industrial action (such as a strike) or high levels of staff turnover in a firm (when staff do not remain very long working for a firm).
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Why do businesses need to be prepared for the unexpected?
A firm cannot prepare for every emergency, but it
is worth highlighting the biggest risks and preparing for these. However, contingency plans must not affect the corporate plans of the firm. Keeping a large amount in a contingency fund, for example, may
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Why must managers must be proactive?
Anticipating and preparing for change – rather than reactive – having to react to crises as they develop
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What is demographics?
Demographics measure the changing structure of the population. The first important factor is the overall size of the population.
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Why is demographics of interest to a business?
This is of interest to businesses since, in general terms, if the population increases, the size of their market will increase, and they will be able to sell more goods
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Why is the age of the population important?
The baby boomers of the 50s & 60s are now entering or moving toward retirement. These people are generally a well-ff section of society, the majority with their own home & many with high value final salary pensions. Baby boomers can have large amounts of
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What is migration
Also a major part of the change in UK population structure. Eg. young immigrants have added to the working population as they fill the skills gap in the UK & undertake those jobs, such as agricultural, labour, which the UK population has been reluctant to
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Lifestyle changes pt 1.
Increase in the number of women who are economically active i.e. in work. Working women do not comply with the old-fashioned housewife role; they are busy, with no or little time during the working week to cook, mend & sew.
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Lifestyle changes pt 2.
Society is becoming more health-conscious. Fitness is another sustained lifestyle change. This does not just impact on the demand for gyms but also related goods, such as low-fat, low-sugar & organic foods
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Lifestyle changes pt 3.
For businesses, the problem of how younger people consume media & purchase goods is a major problem. Teenagers switch between TV, phones, tablets to consume entertainment.
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Lifestyle changes pt 4.
Cultural changes within a population can also have a major impact on business behaviour & the products they produce. Social change also includes fashion changes. Consumers are happy to pay £9 for a coffee as long as it has the right brand on the takeaway
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Lifestyle changes pt 5.
Changes in consumers' attitudes towards the environment have changed demand patterns across a range of industries. Electrical goods need to be energy-efficient. When consumers are purchasing cars, the focus can be as much on emissions & fuel efficiency, a
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Lifestyle changes pt 6.
Changes in objectives - rise in social enterprises
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Card 2

Front

What is the aim of a contingency plan?

Back

The aim of contingency planning is to minimise the impact of an unforeseeable event and to plan for how the business will resume normal operations after the event.

Card 3

Front

Examples of contingency plan

Back

Preview of the front of card 3

Card 4

Front

Benefits of contingency plans

Back

Preview of the front of card 4

Card 5

Front

Reasons against contingency planning

Back

Preview of the front of card 5
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