r
How we
manage risk (continued)
Ahold's principal risks and uncertainties1
Strategy
Description of risk
Key risk drivers
Risk mitigating actions
Potential consequence
Ahold at a
glance I Ourstrategy I Our performance
Financials Investors
Ahold Annual Report 2013 64
Better place
to shop
Business and IT continuity (O)
Disruption of critical business processes
may result in non-availability of products
for customers
- Dependency on IT systems
- Dependency on supply chain
- Centralized facilities
- Dependency on logistics service providers
- Dependency on suppliers of strategic own-
brand products and services
- Business continuity governance structure
- Business continuity strategic guidelines and
tactical policy
- Business continuity framework with guidance,
procedures and document templates
- Business continuity management plans
- Insurance program
Ahold continues to maintain and invest in
business continuity management plans.
However, these measures cannot fully prevent
business interruptions that could have a material
adverse effect on the Company's revenues,
customer perception and reputation
Better place
to work
Collective bargaining (O)
Ahold's businesses might not be able to
negotiate extensions or replacements on
acceptable terms, which could result in
work stoppages
- Expiring contracts
- Relationships with the relevant trade unions
- Business disruption
- Adverse publicity
- Contract negotiation process
- Human Resource functions to support
relationships with trade unions
- Contingency plans
A significant portion of the employees of Ahold's
businesses are represented by unions under
collective bargaining agreements. A work
stoppage due to the failure of one or more of
Ahold's businesses to renegotiate a collective
bargaining agreement, or otherwise, could have
a material adverse effect on the Company's
results of operations and financial position
Business
model
Economic conditions and
competitive advantage (S)
Uncertainty about the macro-economic climate
and changes to the competitive landscape
might threaten Ahold's ability to achieve its
strategic business plan
- Price perception
- Consumer confidence and unemployment
- Consumers' decreasing purchasing power
- Changes in the retail landscape
and competition
- Research and monitoring of
consumer behavior
- Price benchmarking competition
- Analysis of economic developments
- Promotional activities
- Building more personalized
customer relationships
- Strengthening own brands (e.g. new brand
AH BASIC and repositioning Simply Enjoy
own brand)
Ahold is focused on the execution of its strategic
pillars and promises. Unforeseen effects could
impair the effectiveness of Ahold's strategy
and reduce the anticipated benefits of its price
repositioning, and cost savings programs or
other strategic initiatives. Inflationary forces
impacting cost of goods sold might be difficult
to pass on to consumers. These factors
may have a material adverse effect on the
Company's financial position, results of
operations and liquidity.
For more information see Our strategy
1 Risk objectives: strategic (S), operational (O), financial (F) and compliance (C) risks listed in alphabetical order.
