How we manage risk (continued)
Ahold's principal risks and uncertainties1
Business continuity
Collective bargaining
Competitive environment
and economic conditions
Ahold at a glance
Business review
Governance
Ahold
Annual Report 2015 50
Risk Strategic area
Key risk drivers
Mitigating actions
Potential consequences
Disruption of critical business processes place
may result in non-availability of products to shop k
for customers
a Dependence on IT systems
a Centralized facilities
a Dependence on logistics service providers
a Dependence on suppliers of strategic
own-brand products and services
a Cyber threats
a Business continuity governance structure
a Business continuity strategic guidelines
and tactical policy
a Business continuity framework with
guidance and procedures
a Business continuity management plans
a Insurance program
While Ahold continues to maintain and invest
in business continuity management plans,
business interruptions could have a material
adverse effect on the Company's financial
position, results of operations, liquidity,
customer perception and reputation.
Ahold's businesses might not be able
to negotiate extensions or replacements
on acceptable terms, which could result
in work stoppages
a People management and
associate engagement
a Expiring collective bargaining agreements
a Relationships with the relevant trade unions
a Associate engagement survey
and response
a Performance management cycle
a Contract negotiation process
a Human Resource functions that support
relationships with trade unions
a Contingency plans
A work stoppage due to the failure of one or
more of Ahold's businesses to renegotiate a
collective bargaining agreement, or otherwise,
could be disruptive to our business, lead to
adverse publicity and have a material adverse
effect on the Company's results of operations
and financial position.
A weak macroeconomic climate and
changes to the competitive landscape
without appropriate response could
threaten Ahold's ability to achieve
its strategic business plan
Business model
a Consumer value perception
(price, assortment, quality)
a Unemployment rate
a Consumer purchasing power
under pressure
a Changes in the retail landscape
(e.g., shopping) and competition
a Lack of distinctiveness
a Inflationary forces impacting cost
of goods sold
a Pressure on margin
a Research and monitoring
of consumer behavior
a Price benchmarking competition
a Analysis of economic developments
a Actively monitoring and developing
online business
a Approved strategies
a Promotional activities
a Building more personalized
customer relationships
a Strengthening own brands
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. These factors
may have a material adverse effect on
the Company's financial position, results
of operations and liquidity.
For more information see Business review.
1 Risk objectives: strategic (s operational (o financial (f and compliance (c risks listed in alphabetical order.
