1. Unifine Richardson current risks
Unifine Richardson is facing several risks as a result of a banned antibiotic substance found in Chinese honey. Figure 1.summarizes the current risks. The first and most concerning threat is meeting their customer’s demand. Unifine’s supplier market is on the left of the supplier competitiveness Continuum1 with their single source supplier Harrington Honey. In this arrangement, a shortage of honey at the supplier side means a direct impact on the company’s ability to fulfill customer demand. Supplier will run out of the Chinese honey in a month’s time and they do not have an alternative supplier to turn to. The level of this risk is considered to be critical because it will have high impact on revenue.

Unifine Richardson will need to switch to another source of honey and this could lead to a change in the taste of honey. The level of this risk is high because their largest customer has high quality standards and any drop in standards could cause further decrease in sales.

In addition to the quality concern, Unifine Richardson could risk a drop in profit if they chose a more expensive source of honey. This risk level is somewhat high. There is a “cost plus” arrangement with the main customer regarding the product margin, as this is established it allows ease of negotiations with customer based on the cost of any honey source chosen. Losing the main customer, which contributes to 80% of sales, will have negative impact on future demand. This is considered to be a high risk for the future forecast.

Furthermore, the United States has enforced dumping tariff on honey products from China and Argentina and had fears of stocks being redirected to the US through Canada. The probability of occurrence is low. Therefore the risk has been identified as low.

The company was not prepared for this disruption. This fact shows the